L’Oréal is aiming to grow 5% in China in 2025 as the French beauty giant looks to secure sure footing in the challenging beauty space.
The optimistic outlook follows “encouraging signs” so far this year from the world’s second largest beauty market, said L'Oréal’s North Asia and China CEO Vincent Boinay.
“The numbers are getting better and the target of 5% is not only the target for Chinese growth this year, but also the target of L'Oréal in China, by the way," said Boinay during a conference in Shanghai on 1 April.
China has proven to be a sticking point for a number of luxury beauty businesses in recent years amid the country’s continued struggles to recover from the Covid-19 pandemic.
Estée Lauder Companies and Kao both cited a reduced demand for prestige beauty in mainland China as the reason for their lagging sales.
L’Oréal also reported that its earnings were impacted by poor results in China in 2024.
Japanese beauty giant Shiseido’s annual operating profits, meanwhile, plunged 73.1% last year, with the slump attributed to a drop in consumer spending in key market China.
But L’Oréal’s renewed confidence and energy feels like the start of a potential turning point to buck this trend of lagging consumer confidence.
Following the conference in Shanghai, the French beauty giant released its first socio-economic impact study into China.
The report reaffirmed L'Oréal's “strong confidence” in China's beauty market, which Boinay said is being driven by the beauty's “stronger-than-ever relevance to Chinese society”.
Boinay continued: "L'Oréal's purpose of creating beauty aligns with Chinese consumers' growing aspiration of a better life.
“We firmly believe that investing in China is investing in the future.
"With a long-term commitment, we will continue to deepen our presence in China, seizing opportunities from beauty's socio-economic impact, enhancing our proximity to Chinese consumers and elevating the game with strategic investments.”
L'Oréal China supports more than 330,000 jobs, with each direct job supposedly creating 20 additional jobs across the economy, according to the report.
Gen Z, Gen X, Boomers and men have been cited as key target demographics that could facilitate growth in the country this year.
L'Oréal also aims to sharpen its brand portfolio by introducing new brands such as Miu Miu and Dr.G, and elevate hero brand products that are already available.
The investment into China will see L'Oréal continue with its Beauty Stimulus Plan – a strategy that aims to solidify the country’s strategic importance for the group.
Two new investment funds dedicated to supporting burgeoning Chinese beauty brands and related companies have also been established.
The first fund, launched in partnership with Cathay Capital and the Jing'an district of Shanghai, will focus on investing in growth stage beauty brands and related businesses.
The second fund, managed by Tiantu Capital in collaboration with BOLD – the venture capital fund of L'Oréal – aims to invest in early stage companies within the same sector.
"After 28 years in the Chinese market, we believe brand success relies not only on our own capabilities, but also on continuously evolving to meet rapidly changing consumer needs,” said Laurence Ma, Deputy CEO of L'Oréal China and General Manager of Luxury Division.
“From brand portfolio and product innovation to channel strategy and talent development, we go from strength-to-strength.
“We are committed to bringing the best beauty products and services to China's savvy and sophisticated consumers, fulfilling their ever-growing aspirations for beauty."
L'Oréal is not backing down from this fight, potentially paving the way for other luxury beauty brands to find a similar spark and overcome the market’s woes.