Abstract : For French cosmetics giant L'Oreal, economic recovery in China is a great boost to its global business as Europe is slowly returning to normal after the huge blow from the coronavirus pandemic.
by Xu Yongchun, Zhou Rui, Su Liang
PARIS, July 23 (Xinhua) — For French cosmetics giant L’Oreal, economic recovery in China is a great boost to its global business as Europe is slowly returning to normal after the huge blow from the coronavirus pandemic.
“The situation in China is improving everyday following the COVID-19 outbreak. Consumption, in particular, is rebounding very quickly and strongly as consumers have developed more aspiration for higher-quality and safer products, services and experiences during the COVID-19 lockdown,” said L’Oreal CEO Jean-Paul Agon.
L’Oreal’s supply chain in China remained stable overall during the outbreak and resumed promptly. Products manufactured by L’Oreal in China are not only meeting the needs of Chinese consumers, but also partially exported to overseas markets, Agon said.
According to Agon, China’s competitive advantages in the global supply chain are not just in cost and scale, but more in market potential, product quality and innovation capacity.
The CEO believes that the trend of globalisation is inevitable.
“The new globalisation will be based on open cooperation and digital innovation. China will play a more important role in it,” said Agon, adding that China is an “accelerator of innovation”” and a “stabilizer” in the global supply chain.
Fabrice Megarbane, CEO of L’Oreal China, also voiced his confidence in the company’s business development in China, noting that the cosmetics market is quickly recovering.
“I’m very confident because the foundation for consumption is there. We have seen a strong rebound. China has controlled the COVID-19 outbreak well, which has allowed us to get back to work quickly and to be more confident for the years to come. L’Oreal will continue to focus on business and development in China,” said Megarbane.
Statistics from L’Oreal show that its sales in the Chinese market grew by 6.4 percent in the first quarter, while its e-commerce business leaped by 52.6 percent. The company has launched new products and opened several new stores in China.
Megarbane believes that multiple positive factors have accelerated the recovery of the Chinese market, such as organizing festivals and distributing vouchers to stimulate consumption.
Apart from traditional distribution channels, L’Oreal has strengthened its cooperation with e-commerce platforms in China, such as Tmall. “Today, Tmall’s platform enables brands to better understand consumers. Through a close partnership with Tmall’s database, we use the data to strengthen our innovation, which allows L’Oreal to respond in a more personalized and precise way to the needs of consumers,” explained Megarbane.
L’Oreal has always seen itself as a “multinational and localized” company, Agon noted.
“Today the whole planet is more connected than ever before. Opportunities from a continuously reforming and opened-up China are opportunities for the rest of the world, and vice versa. Nothing can change our confidence in furthering our development in China,” he concluded.
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Source: Interview: “Nothing can change our confidence in furthering our development in China,” says L’Oreal CEO