Pierre Fabre firmly committed to long-term expansion in China

French multinational pharmaceutical and dermo-cosmetics giant Pierre Fabre is reinforcing its online strategies to expand its reach to customers in China.

Bertrand Parmentier, CEO of Pierre Fabre Group, said that global cosmetic markets are becoming more consumer-centric due to the digital transformation, which requires businesses to build up direct relationships with customers.

"Originally, our proposition of values builds with the offering of products, which was recommended by dermatologists and promoted by pharmacists or beauty advisers (in physical stores). Now, on top of these, the direct relationship with consumers is also very important," said Parmentier.

"It is a shift in the habits of consumers. The new generations (in China) are digital natives," he said. "These digital natives give us opportunities to establish regular relationships."

Parmentier said Pierre Fabre has reported strong online sales revenue growth in the Chinese market over the past two years.

"Our online sales grow very fast," said Parmentier. "In 2017, we will achieve more than 15 percent turnover of sales online. We expect this percentage to grow to 25 percent in the upcoming years."

So far, the company, which launched its online business in China in September 2015, has established partnerships with leading Chinese e-commerce platforms Tmall and JD.

Parmentier revealed Pierre Fabre is planning to embrace more online distribution platforms in China to maintain long-term growth.

"We started our online business in China with Tmall two years ago. We are now considering other outlets," Parmentier said.

Online channels are also considered strong means of testing and learning how to introduce a new brand into the Chinese market, according to Parmentier.

Although the group is expecting to generate more turnover online in China, Parmentier said it is not necessary to pit online and offline channels against one another, adding that the two are complementary.

"That is why we do not have to oppose or shift from one to zero but we have to articulate online and offline strategies. You have two legs and you have to combine the two," Parmentier said.

Pierre Fabre started operation in China in 2003 and has reported strong market performance over the past 14 years.

Its products are sold in more than 600 department stores in major Chinese cities.

"We have achieved a good footprint in terms of physical distribution," Parmentier said.

He said China has become the second-largest dermo-cosmetic market in terms of sales revenue among Pierre Fabre's global markets since 2015, second only to France.

The company's brand Avene is one of the most popular skin care brands in China.

Today, one Eau Thermale Avene product is sold every four seconds in the country, according to the company.

"It is an important region," Parmentier said. "With regard to the dermo-cosmetic division, China contributed about 20 percent of our sales revenue globally. Within the following years, China should contribute 30 percent of sales revenue."

Pierre Fabre is also keen to introduce more brands to Chinese consumers. Hair care brands Rene Furterer and Klorane were introduced in 2014 and 2015, respectively.

Parmentier said more brands could be introduced in the coming years.

The evolving demand of Chinese consumers creates ample opportunities for cosmetic developers. In recent decades, almost all globally leading cosmetic brands have launched distribution in China.

"The competition is fierce," Parmentier said.

Parmentier said sticking to differentiation is the key driver behind the company's development in the Chinese market.

Natural spring water-based and clinically-supported studies are key elements differentiating Eau Thermal Avene product from others, according to Parmentier.

Looking ahead, Pierre Fabre will continue to expand in China to serve consumers' changing demands.

A trading company will be established to support the company's expansion plan soon, according to Parmentier.

"The characteristic of Pierre Fabre is that we are not there for a short-term, easy success. When we invest in a market, we want to establish our brands for the long term," Parmentier said. "We will do the same in China. We hope to have significant growth in the coming years."

tangzhihao@chinadaily.com.cn

(China Daily 06/30/2017 page12)