Estee Lauder taps China as 'core growth engine'

Riding on double-digit sales growth in the Chinese mainland, cosmetics giant The Estee Lauder Companies Inc said it will reinforce its expansion strategy in the market and boost its premium beauty sector, with major upgrades already underway to its supply chain and research facilities in Shanghai.

Identifying China as a "core growth engine" in its fiscal 2026 second-quarter earnings report, the company expanded its presence in late March with two projects launched in Shanghai's Minhang district — the China Fulfillment Center and the Group Open Innovation (GOI) Center — to boost its research and development and intelligent supply chain operations.

"China is more than one of the world's largest beauty markets. It is a global leader in shaping consumer trends, digital innovation and the future of our industry," said Stephane de La Faverie, president and CEO of the company. "More than logistics facilities, the newly launched centers represent a strategic capability designed to bring our products to consumers faster, more intelligently and more seamlessly across channels."

Situated in Xinzhuang Industry Park and covering some 130,000 square meters, the GOI center is one of the group's most automated omnichannel fulfillment centers globally.

Operated by SF Holding in a "dual-warehouse linkage" model, it integrates bonded and non-bonded warehouses, overcoming operational barriers between imported and domestic businesses.

In addition, with automated stacking, goods-to-person picking and high-speed sorting systems, the facility supports 24/7 unmanned "lights-out" factory operations, processing over 400,000 units daily and successfully handling peak shopping events like 618 and Double 11 during its trial run.

"Strong value chain capabilities are a key foundation of our long-term competitiveness," said Roberto Canevari, executive vice-president and chief value chain officer of The Estee Lauder Companies.

The new center aims to create a smarter, more resilient value chain, leveraging advanced automation and market visibility to build a consumer-centric and future-ready logistics network in China, Canevari said.

Wang Wei, chairman and general manager of SF Holding, described the project as a milestone in innovative cooperation. "Its dual-warehouse linkage model sets a new standard for supply chain efficiency in the beauty industry," Wang said.

Wu Qiang, government head of Minhang, said, "I expect the GOI center to fully leverage its dual role as an innovation incubator and a resource connector in the years ahead."

The company announced strong financial results for the second quarter of fiscal year 2026 in February, driven by a 13 percent year-on-year increase in organic net sales in the Chinese mainland. This marks the company's second consecutive quarter of double-digit growth.

"The creativity, sophistication and energy of Chinese consumers continue to inspire us and we are excited to see positive business momentum," de La Faverie said.

Fan Jiayu, president and CEO of The Estee Lauder Companies China, stated: "The upgrade of our R&D and supply chain presence is crucial to our 'In China, For China' commitment and our 'Beauty Reimagined' vision. By integrating intelligent operations and local innovation, we aim to accelerate the application of cutting-edge technologies in the beauty industry, enhancing premium experiences for Chinese consumers."

heqi@chinadaily.com.cn