China focus: Top cosmetics stories featuring L’Oréal, Azelis and more

1 – ‘Remarkable’ rebound: L’Oréal China’s strong Q1 results show appetite for beauty ‘remains intact’ despite COVID-19 – CEO

French cosmetics company L’Oréal reported that its sales in China have seen progressive signs​ of recovery since the country was hit by the novel coronavirus (COVID-19) outbreak, potentially signalling that the cosmetics market is headed for a quick recovery post-pandemic.

L’Oréal was able to rebound quickly to achieve growth in China in March, leading to a positive first quarter for the company.

Chairman and CEO of L'Oréal Group, Jean-Paul Agon highlighted that the company’s performance in China was “remarkable”.​

“China was able to close the quarter at plus 6% which is pretty amazing when you think about the difficulty that they had due to the pandemic.”​

The firm credited its speedy recover to the early restoration of operational capabilities in February, strict application of safety measures to ensure a safe working environment, as well as the rapid adjustment of activation plans in favour of Online and O+O (Online + Offline) activities.

2 – China’s position in global supply chain will not be weakened by COVID-19 pandemic – Global Cosmetics VP

Cosmetic manufacturer Global Cosmetics believes that China will remain a major supply chain hub​ for the cosmetic industry, despite the disruptions caused by the novel coronavirus (COVID-19) outbreak.

The Hong Kong-headquartered company felt the effects of the COVID-19 outbreak immediately as its manufacturing facilities are located in China.

Patrick Leung, VP of business operations told CosmeticsDesign-Asia​ that the company has had an “interesting” ​few months since the outbreak in China.

“At the time, our UK and US customers were chasing us as they were afraid products would not get shipped out on time. These brands considered not putting so much reliance on China in the future.”​

However, Leung said he was doubtful that these companies would be able to re-direct their manufacturing back to their country of origin.

“I don’t feel pessimistic even with governments are telling companies to consider moving their supply chain back to their home countries. Making the change would be a huge challenge.”​

3 – Eco-friendly beauty for China: Shiseido’s new R&D centre to focus on development of green products

The Shiseido Company will establish a new research branch of its China Innovation Center in the Oriental Beauty Valley​ to focus on R&D of green beauty products for the local market.

This follows Shiseido’s 2019 launch of its China Business Innovation & Investment Representative Office, which is dedicated to developing businesses in response to the market trends in China.

The new Oriental Beauty Valley branch will serve as an advanced research and prototype development centre.

First opened in 2015, The Oriental Beauty Valley is an industrial park located in the Fengxian District of Shanghai, China.

Known as China’s city of cosmetics, the park is home to various companies and institutes specialising in beauty and personal care as well as food, pharmaceuticals and biotechnology.

According to the company, Shiseido is the first top-ranked global beauty companies to set up shop in the economic district.

4 – Fragrance in China: ‘Sophisticated’ consumers shifting focus from skin care to premium fragrances

Analysts believe China’s premium fragrance market​ will continue to see strong growth underpinned the luxury positioning of fragrances and its e-commerce availability.

According to Euromonitor International, the premium or fine fragrance market in China has seen dynamic growth in the last decade.

Stephanie Yao, Senior Research Analyst at Euromonitor International, highlighted that the demand for fragrances, which as seen as high-end products, are being driven by the increasing sophisticated tastes of Chinese consumers.

“With the growing consumer sophistication, consumers’ attention is likely to shift from skin care, to colour cosmetics, and then to fragrances,” ​she said.

Fragrances are also considered by Chinese consumers as the ‘perfect’ gift due to their luxury image, which is further driving up sales, Yao added.

According to Euromonitor data, Jo Malone London, Christian Dior, Yves Saint Laurent, Chanel, Prada and Tom Ford are the fragrance brands at the forefront of consumers’ minds today.

5 – Transparency, sustainability and natural: What Azelis hopes to drive forward in China after CosBond deal

Azelis is hoping to step up its focus on transparency, natural ingredients and sustainability​ in China’s cosmetics sector after in the wake of its acquisition of Chinese speciality chemicals company CosBond.

Headquartered in Hong Kong, CosBond has offices and warehouses in Hong Kong, Shanghai, Guangzhou and Beijing.

Since its establishment in 2008, has built a strong market position in the personal care market, serving more than 500 customers ranging from major multinationals to smaller local producers

Laurent Nataf, CEO & President, Azelis Asia Pacific, told CosmeticsDesign-Asia that by acquiring CosBond, Azelis hopes to further extend its reach in the one of the most important markets globally.

“We see value in establishing a greater foothold in the large and fast-growing Chinese personal care market, which is driven by the increased awareness on personal grooming habits amongst the Chinese consumers coupled with the improvement in living standards brought by urbanisation.”