French personal care company L'Oreal reported a surge in sales revenues of its Chinese business. Despite the ongoing epidemic that has wreaked havoc on the nation's retail industry, the cosmetics firm still managed to increase its sales by 35 percent last year.
According to L'Oreal China chief executive, Fabrice Megarbane, the increase in its product sales in China last year had hit a 15-year high. During a press conference on Thursday, the executive revealed that the company's overall sales revenue hit $33.27 billion last year.
This represented an 8 percent year-on-year growth when compared to the previous year. The company stated that it was the highest amount of growth it had experienced since 2007.
The world's largest cosmetics group added that the sales growth in China managed to boost its overall sales during the fourth quarter. The Asia Pacific region, in particular, became its largest regional market for the entire year for its core hair color, haircare, skincare, sun protection, perfume, make-up, and sun protection products.
Megarbane added that the ongoing threat posed by the novel coronavirus will have a short-term negative effect on its business in China. This particularly impacted its sales inside department stores and retail outlets but the company stated that it has since seen a huge spike in online sales through its online retail platforms. The executive added that overall sales from its online and offline channels should fully rebound once the epidemic ends.
For this year and the next, the company is looking to increase revenues for its more popular brands in China. This includes its Khiels' skincare brand, which had sales of over $432 million in China.
Other brands that the company is looking to focus on are its Urban Decay and Nyx brands, both of which had made their debut in the Chinese market last year. L'Oreal aims to use cross-border channels this year to increase the overall sales of the brands. The company also revealed that they will be holding launch events for both brands by the end of the first quarter this year, after which the products will then be made available on all retail outlets offline and online.
The company added that it also plans to tap into the venture capital field by opening up its ecosystem to startup companies. This would allow the company to tap into new opportunities to help it establish its unique ecosystem built specifically for the Chinese market.
