Estée Lauder still determined in China

By Lucy Whitehouse contact

- Last updated on GMT

Estée Lauder still determined in China

Related tags: Estée lauder, Investment

Estée Lauder is said to be pushing ahead with its strategy to make inroads in China, despite the slumping economic conditions in the country.

The cosmetics giant is aiming to strengthen its presence in China’s smaller cities, according to a recent statement by CEO Fabrizio Freda, looking to push back up its sales growth, which slumped to 8% last quarter.

"We are not going to combat the market in China - meaning (even) if China is slowing down,we will stay there, stay focused and continue to invest,” Freda told China Daily​ news outlet.

“We have the ambition to stay focused and continue investing during the ups and during the downs. At this moment, there's a little bit of down, but it's not dramatic, it's just a bit of softening and we're still growing in China. For us it's going very well," he said.

The beauty behemoth has previously seen sales growth highs of 20% in China.

Slow China - but only for now

Despite China’s ongoing slowdown, commentators have largely noted that cosmetics firms are likely to avoid too much negative impact.

Market analysis firm Moody’s previously told Cosmetics Design that the brunt of impact would be taken by EMEA’s mining sector, and for beauty, only organic growth is being hit.

Moody’s does not expect any major impact on cosmetic companies from a slowdown in China, but rather a reduction in organic growth rate​,” analysts from the firm confirmed​.

For example, Shiseido has been benefitting from sales to Chinese tourists who are active buyers of Japanese cosmetics products and the company is still aiming for reasonable growth with its Chinese business, although this may be curtailed somewhat by the recent slowdown​.”

Estée Lauder looks to China

Indeed, Estée Lauder has stated it is explicitly looking to China for growth in the current period, with e-commerce particularly in focus.

The higher sales in China reflected sales gains in most brands due to continued distribution expansion and increased online activity,​” the company noted in its most recent quarterly report.

Strengthening its presence in smaller cities will serve the company well in its bid to strengthen online in China, as the rural e-commerce market there is tipped to reach 460 billion yuan this year.

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