L'Oreal betting on beauty products buying bonanza

L'Oreal, the world's largest cosmetics company by revenue, said it is highly confident and ambitious about growth prospects in China, and it will develop more tailor-made products for China to meet increasingly sophisticated consumer requirements.

The French company, which has been operating in the Chinese mainland for 25 years, said Chinese consumers are increasingly eager to acquire higher quality luxury products, and both male and female Generation Z consumers — those born in the late 1990s or early this century — want the newest and coolest things. What is really striking in China is the growth speed and the scale at the same time, L'Oreal said.

"China is a unique market because it combines a very strong appetite for beauty, and we see that Chinese consumers love high-quality beauty products and they want the best," said Nicolas Hieronimus, CEO of L'Oreal Group.

"It's a country where we can innovate, invent new things and scale them very fast, and then it becomes a role model for the rest of our businesses around the world. Investing in China is investing in the future. China is the growth engine for L'Oreal," Hieronimus said.

L'Oreal said it is looking for high-quality growth in the country with more innovation and investments.

A five-time participant of the China International Import Expo, L'Oreal said China, the second-largest market for the group, has been a strategic market and shows relentless dynamism.

This year, the company launched a large number of new products and technologies at the CIIE. It also announced that it has invested in Documents, a Chinese high-end fragrance brand, and the investment came from Meicifang, L'Oreal's first investment company in China.

"The CIIE is very important both for China and for L'Oreal. It's the world's most important trade fair today and is getting bigger and bigger every year. It's also a great symbol of China's policy of opening-up, and inviting so many companies to this event is a strong sign of opening-up," Hieronimus said.

By 2030, the number of middle-income consumers in China is expected to reach 700 million, accounting for about half of the total population, according to the Development Research Center of the State Council.

China's huge middle-income consumer base and young consumers' pursuit of high-quality lifestyles and products have been making the company more confident in the Chinese market.

Despite the COVID-19 pandemic, L'Oreal reported strong business performance. In the first three quarters, it achieved global sales revenue of 27.94 billion euros ($27.68 billion), up 12 percent year-on-year. In North Asia, sales during the period grew 7.4 percent year-on-year, according to its latest earnings report.

In the beauty industry, more international brands are increasing their investments in China to tap growing demand.

"Chinese consumers tend to purchase high-quality products to please themselves, and their individualized aesthetic expression has reached a new high point. They also regard the connection between aesthetic expression and local cultures as important," said Yang Li, a global partner with Boston Consulting Group.