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L'Oreal to stop selling Garnier skincare in China
Online Edition
FRENCH cosmetics and skincare giant L'Oreal said it will stop selling the Garnier brand in China to streamline its product divisions by focusing on key brands.
The decision came amidst increasing competition from local brands as well as aggressive multinational companies.
L'Oreal China said in an email statement to Shanghai Daily today that this will enable even faster and more sustainable growth of the company's Consumer Products Division by focusing on its two leading brands — L’Oreal Paris and Maybelline New York.
It added that it would consider all affected employees for positions within the company.
Just days ago, US cosmetics company Revlon said it is pulling out of China amid sluggish sales over the past few years.
Consumers complained that they would have to live with fewer choices of mass market skincare products.
China is the world's third-largest cosmetics market with sales of 96.3 billion yuan (US$15.5 billion) in 2012, behind Japan and the US, according to Euromonitor International. The market has maintained around 20 percent annual growth in the previous two years despite fluctuations in the overall economy.
L'Oreal's China sales growth has been slowing in recent years although it maintained double-digit growth for more than 10 years.
In 2012, L'Oreal China recorded sales of 12.1 billion yuan and annual growth of 12.4 percent, a slowdown from 18 percent growth in 2011.
The chief executive officer for L'Oreal China, Alexis Perakis-Valat, said in an interview last year that the company is considering introducing new brands in China to cater to untapped demand and drive sales, but didn't give details.
Personal beauty products have generally beaten the economic downturn and showed strong growth momentum, but performance of different categories and brands varied.
The French cosmetics company said recently it agreed to buy Chinese skincare company Magic Holdings International for US$840 million to strengthen its mass market skincare sector.
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