L’Oreal did not disclose the size or cost of the stake, but L’Oreal North Asia President and China Chief Executive Officer, Vincent Boinay, said it highlights how central China is to the company’s global strategy.
“We firmly believe investing in China is investing in the future, and we will continue to cultivate the Chinese market, work with more Chinese brands to create a beautiful future and meet the expectations of sophisticated Chinese consumers,” he said in a statement.
Reuters was unable to contact for comment for this story.
The investment in Lan comes after L’Oreal paid 442 million Yuan ($62 million) for a 6.67% stake in Chando, as disclosed by the Shanghai-based company last month in its prospectus for an IPO in Hong Kong. China has been challenging for international players, as an increasing proportion of its $75 billion beauty and personal care market has been won in recent years by domestic brands, dubbed C-Beauty. At the same time, overall growth has slowed, with consumer confidence hit by a prolonged property crisis and widespread concerns about job stability.
Buying stakes in well-known domestic names could be a shortcut for L’Oreal to piggyback on C-beauty’s momentum, said Ben Cavender, Managing Director at Shanghai-based China Market Research Group.
“L’Oreal and other international brands face a tremendous amount of pressure from domestic brands that are iterating new products faster, and often have been more aggressive at marketing new skincare ingredients, concepts, and routines,” he said.
–Reuters–
