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L'Oreal's confidence in Chinese market is stronger, says CEO

Xinhua Updated: 2023-04-03
L'Oreal's flagship store in Shanghai. WANG GANG/FOR CHINA DAILY

PARIS -- L'Oreal is overall optimistic, confident and ambitious in the short and longer-term about China, said Fabrice Megarbane, president of L'Oreal North Asia Zone and CEO of L'Oreal China.

Since China's optimization of COVID response, "we have already seen potential opportunities in the market which makes us even more bullish about China's economic outlook and prospects," said Megarbane in a recent interview with Xinhua.

The French cosmetics giant was preparing for the beauty market rebound. From the first week of February, consumer traffic and purchases have revealed positive signs and L'Oreal expects a progressive rebound from Q2 and consumer enthusiasm to bounce back in all categories, said Megarbane.

L'Oreal entered the Chinese mainland market in 1997. Its 2022 results show that L'Oreal still strongly outperformed the market worldwide and in China.

In China, it achieved strong offline and online market share gains throughout the year, as well as during Double 11, the world's biggest shopping festival.

"At the beginning of L'Oreal China's 2nd 25 years, we are entering a new era of innovation-driven and high-quality development, which is very in line with China's economic development roadmap," said Megarbane.

As new consumer potential continues to emerge, L'Oreal expects to reach an additional new 100 million Chinese consumers by 2030, he added.

Calling China "the new investment landmark" for L'Oreal, Megarbane stressed that "we have been always investing in China in the past 25 years, and will invest in China continuously in the future."

In China, L'Oreal has one research-and-innovation center and two plants, with the first global self-built intelligent fulfillment center and clean workshop.

"The stable end-to-end supply chain and two self-owned plants are our solid backing not only for the business in China, but for the group particularly under the VUCA (volatility, uncertainty, complexity, and ambiguity) context worldwide," said Megarbane.

"China has a unique ecosystem that is advanced in digital and technology and becomes the origin of open innovation for L'Oreal," he continued. "In the mid-and-long term, China is not only a growth engine for L'Oreal Group but has a strategic position in terms of innovation (digital + beauty tech), sustainability and talent."

In 2022, L'Oreal set up its first investment company at country/market level in China, aiming to cooperate with more partners in China to explore more potential innovative companies, nurture forward-looking innovations and promote their commercialization.

Megarbane also noted that China is building a unified domestic market that is highly efficient, fair, and open, and L'Oreal was benefiting a lot from it.

"The dual circulation policy has brought China and the international market closer than ever before. Every year, the CIIE (China International Import Expo) is a big discovery ... We would like to witness and support CIIE to become better and better, to be able to cooperate and collaborate on this platform with more clients, partners, and authorities," he said.

"The pace of reform is getting faster, the efficiency of implementation is getting higher, the door of China's opening-up is becoming wider and the business environment is getting better, making our confidence in the Chinese market stronger," said the CEO of L'Oreal China.