L'Occitane International SA aims to pursue extensive digitalization, saying it may introduce mobile-payment systems for its off-line beauty products stores to combine its on-line and off-line sales.

The Provence, France-based beauty products group said on Monday it will continue to expand globally on a selective basis, opening key retail upgrade projects that will complement its fast growing e-commerce strategy.

"We believe there will be very big growth in L'Occitane's website development on the mainland," said Andre Hoffman, managing director of L'Occitane. "And, we're now working very hard with Tmall to come up with an exciting marketing plan."

He said L'Occitane's official Tmall store will open early next month, stressing that the group will continue to invest in upgrading its website on the mainland. But, the group's capital expenditure for the first half of the 2015 financial year is down to euros 28.2 million ($34.94 million) - almost 40 percent down compared with the same period in the 2014 financial year - as the group said digitalization in its business will not increase its spending.

The group said it expects its capital expenditure to drop significantly, but spending on stores expansion and information technology still take up a major proportion of the expenses, accounting for 65.6 percent and 14.9 percent, respectively, in the first half of the 2015 financial year.

L'Occitane plans to open 10 to 15 new stores on the mainland before the end of March next year.

The group reported that its profit for the first half of the 2014 financial year rose by 156.3 percent to euros 37.3 million due to foreign currency gains of euros 8.9 million during the period, compared to foreign currency losses of euros 7.4 million for the same period last year. "I don't know what will be the currency exchange rate trend, but we can gain in one currency when we lose in another," said Thomas Levilion, L'Occitane's chief financial officer.

The group's net sales surged 11.9 percent to euros 485.9 million, primarily driven by sales on the Chinese mainland and in Hong Kong, Japan and the US.

But Hoffman said product sales in Hong Kong were disappointing during this year's "Golden Week" National Day holidays, partly because of the ongoing "Occupy Central" protests. "Clearly, the city's protests have impacted retail business, and we cannot escape. But, the situation has now improved, so our sales are returning," he said.

L'Occitane has signed an agreement with Hong Kong Television Network Ltd (HKTV) to promote its beauty products in the city. "I'm very happy to cooperate with HKTV and everything is going well. The agreement, however, has been delayed to early next year to be enforced because of some technical issues," Hoffman said.

celia@chinadailyhk.com

(HK Edition 11/25/2014 page9)