China Focus: Our top stories featuring China’s cosmetics industry

1 – Beauty games: M.A.C. lipstick collaboration with Tencent mobile game sells out in 24 hours

M.A.C. Cosmetics has launched a collection inspired by Chinese firm Tencent’s popular mobile game “Honor of Kings”, which secured 14,000 pre-orders and sold out across all channels within 24 hours​ of the launch.

The collection comprised of five lipsticks based on five heroines from the game and was available on Tmall, M.A.C.’s online store, and a WeChat mini program.

In an interview with Chinese website LadyMax, M.A.C China noted that the game’s 200 million monthly players inspired the idea for the collaboration.

M.A.C. China marketing director Weng Yanling mentioned that players would associate the characters with some of M.A.C.’s iconic lipstick shades.

The brand saw a real opportunity for a hit collection as “Honor of Kings” has a large female following with a similar target demographic as M.A.C. Currently, there are more female players than male players on “Honor of Kings”.

2 – L’Oréal results thrive thanks to strong demand from Chinese consumers

L’Oréal’s luxury beauty division has seen double-digit growth in China, helping the French cosmetics company to record its best year in a decade.​

Overall, Asia-Pacific took a tremendous lead ahead of other markets, growing 26.2% in the fourth quarter and 24.1% at the end of 2018.

“The performance by geographic Zone remained differentiated. In Western Europe, progress was held back by difficulties in some markets, while growth in North America improved compared with the previous year,” said Jean-Paul Agon, Chairman and CEO of L’Oréal.

He added: “The New Markets achieved their best performance since 2007, and the Asia Pacific Zone, driven by China, has now overtaken North America with sales exceeding €7bn ($7.9bn).”

The success in APAC helped to boost the firm’s overall sales, which rose 7.1% at the end of 2018 to €26.9bn ($30.5bn).

3 – Estée Lauder sales soar past $1bn in Asia as China spends big on beauty

The Estée Lauder Companies announced that beauty sales in Asia-Pacific grew by 20%,​ offsetting a North American sales tumble.

Along with growth in online, travel retail and skin care sales, the Asia-Pacific jump propelled the cosmetics company to a quarterly net sales high of $4.01bn, executives announced on the company’s earnings call.

The company achieved this milestone despite global trade tensions and “softness” in the US and UK, its largest markets.

“We delivered an excellent performance in our fiscal second quarter. Importantly, this was our eighth consecutive quarter of impressive net sales growth that met or exceeded our long-term goal, all while navigating many global macro issues.” said Fabrizio Freda, President and CEO of Estée Lauder Co.

Freda added: “Our sustained progress is the result of our multiple engines of growth strategy, and demonstrates our agility in moving resources to the best global opportunities.”

4 – Cosmetics sales boost LG H&H figures despite China volatility

South Korea’s LG Household & Health Care has delivered its best quarterly performance with help from its cosmetics division which recorded strong double-digit growth, despite market volatility due​ to falling numbers of Chinese tourists.

The company’s fourth quarter saw sales increase 14.2% to ₩1.7tn ($1.5bn), while its operating profit increased 13.9% to ₩211bn ($189m).

The boost was driven largely by the cosmetics division, which saw sales surge 18.2% to ₩1.1tn ($983m) won while operating profit increased 13.8% to ₩192bn ($171m).

For FY18, the company’s cosmetics business grew 19.1% and 23.1% in total sales and operating profit respectively.

5 – Aussie beauty brand targets Chinese consumers with anti-pollution skin care

Australian skin care brand QoQoB has launched in China to help consumers combat the negative effects of pollution.​

The luxury brand signed an exclusive agreement to Reach China to distribute its products into China via the diagou channel.

“We realised that there’s a hole in the Asian market for products that target the effects of air pollution and aging in China,” said Managing Director Belinda Cabria.

Air pollution, Cabria explained, can be extremely damaging to the skin. “It can cause irritation, uneven skin tone, premature aging and even cancer. Every day people in China face billions of pollution particles that damage the skin, clog pores and cause discoloration of the skin.”

“We believe our skin care range is like nothing else on the market and will provide critical support and assistance for Chinese consumers dealing with air pollution related skin issues.”