Estee Lauder expands China's cosmetics universe

(AFP PHOTO)

China is currently the world's third-largest market for cosmetics and toiletries - behind the United States and Japan - as Chinese society as a whole no longer views beauty products as luxury items but as necessities.

While wealthy Chinese once had to travel overseas to get their cosmetics, the domestic market is now spoiled for choice as the world's leading cosmetic companies open shops across the nation.

That makeover of the Chinese market received another boost this week with news that massive New York-based Estee Lauder Companies group is planning to expand its presence in the country with new stores and e-commerce channels.

Estee Lauder markets such brands as Clinique, Origins, Bobbi Brown, La Mer and Sean John in China and has outlets in 38 cities. The immediate plan is to open in five more cities in 2011 and to introduce e-commerce channels for a number of those famous brands.

Other cosmetics brands are sure to follow suit. China is now the second largest market for Procter & Gamble - after North America - while L'Oreal has experienced 25 percent sales increases for each of the past two years.

Meanwhile, Estee Lauder is coming off an impressive 13 percent growth in sales over the past year - up to US$8.81 billion (6.2 billion euros) - and the company says that growth has been in large part due to its success in China.

The plan now is to reach Chinese "wherever they live and travel," according to a company statement.

Estee Lauder first moved into China in 1993 and has since been actively catering a selection of its products to local needs. The company cites the Nutritious brand of cosmetics, which was developed specifically with mainland Chinese women in mind but is now sold globally, as one of its major success stories.

With its Asia Innovation Center in Shanghai - a facility that combines biology research, treatments, makeup and package testing - the company also claims it will continue to "study Asian skin and identify the needs of Asian women."

The company has estimated that US$1 billion (700 million euros) of its sales over the past year have gone to Chinese women across the globe.

MS