L’Occitane H1: China sales rise 23% on the back of new launches such as Osmanthus fragrance

L’Occitane en Provence is the core brand of L’Occitane International, which also owns brands such as ELEMIS, Melvita, and Erborian.

The flagship brand accounted for 77% of total net sales in the first half, contributing 87% of the company’s overall growth during this period.

During this period, the company said it invested heavily into L’Occitane en Provence’s business in China, which is the brand’s largest market to date.

China is also the company’s overall largest market, accounting for 17.1% of total net sales in the first half.

One of its successful launches during this time was the launch of its Osmanthus fragrance.

The Osmanthus flower is a native to East Asia and enjoys a hallowed reputation in Chinese mythology and folklore. It is also used in traditional Chinese medicine and cuisine, where it is commonly enjoyed in teas and desserts.

L’Occitane sourced the Osmanthus from Guilin, a city in Southern China named after the fragrant flower, where it was distilled and extracted.

According to the company, nine hundred kilos of flowers were required to produce once kilo of Osmanthus Absolute and each 75ml bottle of the L’Osmanthus eau de toilette required 450 flowers to produce.

Osmanthus accounted for 10% of the brand’s sales during the launch period.

As a result, L’Occitane en Provence outperformed the Chinese market in terms of online and offline growth.

The group continued to rapidly expand ELEMIS in Asia, opening flagship stores in China in addition to Singapore, and Malaysia. Additionally, it made inroads into markets such as Japan ahead of the important holiday season.

Overall, the group recorded a sales growth of 23% in China, contributing 20% to the group’s total growth.

All-time high

In FY2022 H1, the Group’s reported net sales increased by 12.9% to €696.4m (U$784.8m). Operating profit hit a record, rising 143.8% to €78.9m (U$88.9m).

The growth was credited mainly to the loosening of COVID-19 restrictive measures and the normalisation of retail footfall in some markets. This saw retail, travel retail, and wholesale channels all rebounding strongly.

Despite the reopening of retail stores, almost two years of living with the pandemic has led to some behavioural shifts, such as online shopping, becoming permanent, said the company.

Its online channels grew 11.6% in the second quarter of FY2022 after growing 64.6% in the same quarter of the previous year.

Furthermore, even as the group’s overall sales exceeded pre-pandemic levels, its online sales mix remained at a relatively high level of roughly a third of total sales.

“We are now well-positioned for the longer-term to reach new markets and more age groups with innovative and exciting products and brands – all of which will continue to reflect our values and premium beauty image,”​ said André Hoffmann, vice chairman and CEO of L’Occitane.

Hoffmann added that the firm was keeping an eye on the developing COVID-19 situation globally.

“That said, the recent return of COVID-19 restrictions in parts of the world proves that the pandemic is nowhere near over. This may cause some headwinds in the near term. But given our proven agility and adaptability, and the inherent strengths of our brands, epitomised in the continued strength of our online channels, we look forward with optimism to deliver a strong holiday season and long-term value for our shareholders.”​