“From 0 to 1, from 1 to + ∞”, in the new industry cycle, we can clearly see that L'Oréal China has entered a high-dimensional space in the process of strategic upgrading.

“L'Oréal China is 25 years old.”

From 1997 to 2022 L'Oréal has been with China for 1/4 of a century. In the 25 years 31 diversified brands have accompanied Chinese consumers for beauty consumption “from big to huge”. L'Oréal and China have grown together and entered a new era of China's development.

 

This afternoon (March 25) L'Oréal China held CO-EVOLUTION - Answers to the Future - 25th Anniversary Press Meeting Shanghai via live broadcast. Fabrice Megarbane, President of L'Oréal North Asia and CEO of China, has unveiled a brand new Co-Evolution model – "CO-X".

 

01

What L'Oréal Has Done in China in 2021

 

In 2021 China's cosmetics retail sales have achieved a growth rate of 14%. The beauty market is growing faster than social retail. This is good news for the industry.

“Grasp small trends. Play good first hand chess. ‘Seize what is starting.’”

 

 △BEAUTY HUGEVOlUTION Strategy, 2021

1. More than 20% growth

Guided by the “BEAUTY HUGEVOLUTION” strategy, L'Oréal is constantly “testing/seizing, scaling, learning, and creating ecosystems”. Despite the impact of the pandemic, L'Oréal has achieved very good performance in China – more than 20% growth, twice the average growth rate of the beauty market, and the four major business divisions all have achieved growth.

This strategy has highlighted its “unprecedented importance” over the past year.

 

 △Fabrice Megarbane, President of L'Oréal North Asia and CEO of China

 

In the field of digitalization, L'Oréal has taken a step further. In Double 11 Festival L'Oréal Paris became the No. 1 beauty brand of Double 11, and Lancôme ranked third in beauty brands, achieving sales of more than 10 billion yuan on Tmall.

In terms of live streaming, L'Oréal's brand live streaming studio has accumulated 180,000 hours of live streaming throughout the year, cross-platformed, cross-branded, and constantly achieved seamless connection and immersive interaction with consumers.

 

 

Offline channels are also making a comeback with passion to create better experiences, better connections, and better services for consumers. There is also digital empowerment, and L'Oréal Paris' first global flagship store in Shanghai is one of the best examples.

“L'Oréal believes that beauty is sustainable growth, beauty is diverse and inclusive, beauty empowers women, beauty is responsible and caring for earth, and beauty is the source of scientific and technological innovation.” Fabrice said.

2. 31 brands offer diversity options

Currently, L'Oréal has 31 brands in the Chinese market, which can cover diverse needs, satisfy all kinds of aspirations, and make precise customizations for the Chinese market.

 

Take the Kérastase Paris Genesis Anti-hair loss Haircare series from 2021 as an example. The product originated from the series created for Chinese young people who are troubled by hair loss. The French laboratory anti-hair loss patent AMINEXIL, coupled with the Yuanqi Ginger series of Chinese anti-hair loss ginger root essence, accurately penetrates the hair loss pain points of Chinese Gen Z young people

“Even the fragrance, texture, etc. of the products are customized for the preferences and needs of Chinese consumers, and they are sold well all over the world. In 2022, The Kérastase Potentialiste Serum and the Kérastase New Fusio Dose will be the main promoted products.” Houzhi Lin, L'Oréal China Vice President and General Manager of Professional Products Division, gave more details.

 

3. More than 50% of the management team are women

 

In China L'Oréal has more than 12,000 employees. The commitment to empowering women is not only within L'Oréal, but also globally. In L'Oréal China women account for more than 50% of the management team.

 

4. Promote biodiversity

 

In 2021 L'Oréal China and Kunming's COP15 Biodiversity Annual Conference collaborated to take a series of actions to promote biodiversity conservation. L'Oréal is also constantly pushing for the conservation of natural resources through more sustainable products.

“We believe that beauty is the responsibility to protect the earth. We encourage consumers to recycle empty containers. Lancôme is very active in this regard. Brands such as Armani are committed to making their packaging greener and more organic, reducing the consumption of glass by 55%, plastic by 64%, metal by 75% and cardboard boxes by 32%. The L'Oréal Paris Professional Products Division PRO DIA LIGHT hair color series has introduced tubes that are recyclable and made from 95% recycled aluminum.” L'Oréal said.

 

5. Pioneering green science

The beauty industry is changing rapidly, and the ability to innovate is crucial.

 

L'Oréal believes that beauty is the source of scientific and technological innovation, and beauty is creative. First of all, this innovation is reflected in green science, and only through green science can we constantly explore the unlimited new skin care solutions. Green science is a direction promoted by the Group, not only globally, but also from China to the world.

“Beauty technology can take us further, bringing more personalizing products and innovative products to the market. For example, at the 2021 China International Import Expo Yves Saint Laurent’s Rouge Sur Mesure “lipstick printer” was particularly popular, and consumers gave great feedback.” L'Oréal said.

 

02

2022 New Strategy “CO-X”

 

Entering 2022 and into the future, the global economic situation is still unstable. How to respond to market fluctuations? L'Oréal's answer is “Co-Evolution”.

 

In 2022 we have entered a new era of OMNI-ERA.

 

What is “Omni”? 

 

 

“GEN-Omni” covers it all. It Includes “Omni-Industry”, “Omni-Resource” (digital resources flow across geographies), “Omni-media”, “Omni-channel”, “Omni-Age & Omni-Gender” (age, gender, culture is no longer obstacle), “Omni-Space” (technology dissolves the spatial boundaries), and “Omni-Time” (technology dissolves the time difference). This new ecosystem is HUGECOSYSTEM, a borderless ecosystem.

“There will be all kinds of new development possibilities. In 2022 L'Oréal introduced the Co-Evolution model - CO-X model, focusing on five main areas. We hope to Co-Create, Co-Empower, Co-Develop, Co-Protect, and Co-Invent.” Fabrice said.

 

1. CO-CREATE

CO-CREATE means adding new value to brand and working to satisfy diverse needs. Active Cosmetics Division will work with dermatologists, experts and JD Health to co-create the “Beauty Health” Ecosystem. Luxe Division will utilize big data to carry out “data powered consumer relationship management” and create brand home with consumers … … NYX PMU and makeup artists will work together, and with professional endorsement to empower PRO students among youth groups.

2. CO-EMPOWER

 

Co-Empower for women.

 

The Lancôme Write Her Future philanthropic program helps female college students better prepare for employment and career development. YSL Beauty launched Abuse is Not Love, which is committed to addressing violence in intimate relationships. L'Oréal China is supporting women in science and technology, especially young women. Last year, L'Oréal and the Shanghai Association for Science and Technology worked together to promote the establishment of the For Girls in Science Scholarship for high school girls.

 

3. CO-DEVELOP

“Co-Develop to decode the driving force”

“L'Oréal's driving force & motivation comes from the team. When everything is changing, it is especially important to learn quickly. That's why we've developed a series of learning programs that further empower our employees to constantly improve, upgrade and adapt to new environments.” L'Oréal said.

Not only limited to the internal team, L'Oréal also wants to serve the young generation. The "L'Oréal For Youth" program helps young people plan their futures and start their careers.

4. CO-PROTECT

Cooperate with suppliers, scientists, consumers, and governments to co-protect to evolve ecologic resource for beauty industry development. One of L'Oréal's major commitments is to participate in the whole society and jointly achieve the "double carbon" goals of "carbon emission peaking" and "carbon neutrality".

5. CO_INVENT

 

L'Oréal is a company with its roots in science & technology. It was created by a chemist and scientist.

“Research and innovation are the pulse of L'Oréal group, and our commitment to R&I is evident. Now our investment in R&I has been growing together with sales. In 2021 we invested 1,029 Million Euros globally in R&I, accounting for 3.2% of our sales. We have more than 4,000 R&I experts worldwide and three global centers in Europe. Our 20 research centers worldwide are organized into six regional hubs, with China as one of the six hubs.” Ma Siming, Maxime De Boni, Vice President of L'Oréal North Asia and China Research & Innovation Center, added. “In 2021 L'Oréal registered 517 patents worldwide. We are entering a new era of R & I.”.

 

“Co-Invent is more inclusive, more responsible, more transparent, more innovative, and more nimble than ever.”

03

Under the “China Moment”, L'Oréal Strategies Have Been Constantly Evolving in the Past Three Years 

Whether it is the data or content revealed at this L'Oréal meeting , all these reflect the new thinking of beauty giant on the business logic of the core Chinese market, in the context of the current era.

Since entering the Chinese mainland market in 1997, L'Oréal has been together with China for 25 years, and has been a witness, participant and beneficiary of China's reform and opening up, economic take-off and continuous optimization of the business environment.

From 2016 to 2020 China's beauty consumption developed rapidly. L'Oréal China's revenue in the Group continues to grow, which reinforces the Group's emphasis on the Chinese market.

In March 2020 L'Oréal China officially launched its new strategy “HUGE Strategy” for the next 10 years.

With the guidance of this strategy, despite the impact of the pandemic, L'Oréal China has grasped the four core driving forces of “new consumption”, “new technology”, “new organization” and “new value”, bucked the trend in the difficult market environment, and achieved a 27% year over year increase in fiscal 2020. All 4 divisions have achieved double-digit growth, the overall growth has far exceeded the market average. The Chinese mainland market has become the world's largest market for the top 7 brands.

In March 2021 L'Oréal proposed a new corporate evolution model BEAUTY HUGEVOLUTION and achieved double-digit growth in the Chinese market in the same year, achieving twice the average growth rate of the beauty market.

 

In 2022 the “CO-X” strategy was proposed, which shows that L'Oréal Group's emphasis on the Chinese market has once again “increased”.

L'Oréal expects nearly 370 million Chinese to be in the middle class by 2030.

 

For this future middle class, what beauty impact will it bring?

“In the categories of beauty consumption: skin care will have higher ‘efficacy and premium’ with more focus on personalizing and science, makeup will be ‘high sophisticated’, perfume & fragrance will become part of the new lifestyle scene of Chinese consumers with ‘innovation around communication & usage’, hair care products will be ‘more precise, high sophistication with more efficacy drive’, the male beauty trend will be fast evolving’.” L'Oréal said.

“New technologies such as live streaming, O+O online plus offline channel dynamics, and offline channel comeback facilitated the rise of consumption power in new emerging cities. All of these areas are influencing new consumer behaviors and making Chinese consumers more open and ‘have new ‘good’ ways of consumption and lifestyle’.”

As the largest beauty group in the Chinese market, L'Oréal is constantly evolving in order to resonate with Chinese consumers.