Cosmetics & Personal Care
L'Oreal ------ Start from the ‘head’
2009-10-24
Aug. 2009, L'Oreal launched their shampoo products in China's mass shampoo market. It is estimated that the Chinese shampoo market is worth RMB 25 billion, with a gross profit rate of between 50% and 70%. According to Emma Walmsley, Vice-President of L’Oreal (China), L’Oreal entered China’s mass shampoo market with 3 missions: drive the growth of the traditional market and reshape the market rules; provide high-value products affordable by consumers, and perfect L’Oreal’s product matrix in China.
L’Oreal’s shampoo sales took off when L’Oreal’s products started to sell in supermarkets. There are 2 challenges ahead of L’Oreal, one is the big change in sales channel, and the other is competition from Schwarzkopf and Wella, two tough opponents who also have professional hair care experience and launched their products in supermarkets over three years ago.
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Pharmaceutical companies to enter the daily chemical industry
2009-10-20
It may be a profitable business for pharmaceutical companies to enter the daily chemical industry. Following are the reasons:
- Cosmetics consumer habits are changing direction towards medical care
- China's cosmetics market continues expansion
- Scientific development has provided technical support for the ‘cosmeceutical’ industry
- Innovation of medical channels provides opportunities for the development of ‘cosmeceutical’ industry
Currently, foreign brands have occupied 80% China's ‘cosmeceutical’ market. These foreign brands dominate the high-end market, and have begun to reach out to the low-end market. According to incomplete statistics, China has more than 170 pharmaceutical companies involved in the ‘cosmeceutical’ industry, most of which are struggling for survival. In this environment, if the Chinese pharmaceutical companies want to successfully enter the ‘cosmeceutical’ industry, the following strategies should be very helpful:
- 1. Guide consumers by using medical care concepts to make the market bigger
- 2. Change company strategies to focus on service
- 3. Branding focus on “herbal”
- 4. Differentiated marketing strategy
- 5. Professional talent
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Unilever VS P&G: We are more and more like each other
2009-10-19
28th Sep. 2009, Unilever said it will acquire personal-care brands from Sara Lee Corp. in a €1.28 billion (about $1.9 billion) deal, cementing its grip on the deodorant and skin-cleansing market. This makes Unilever’s strategy similar with that of its competitor P&G, which went out of the food market gradually and turned to the more profitable industries of health and personal care.
Both Unilever and P&G are buying beauty, health and personal care businesses while selling their other less profitable business.
Years ago P&G, sold Tempo tissue to SCA and exited the food market which was not very profitable but had fierce competition. In 2005, P&G purchased Gillette Co. for 24 billion US dollars. In 2008, P&G sold Folgers coffee to Smucker’s. Now, 90% of P&G’s brands are in shampoo, beauty, household care and children’s care industries.
Paul Polman, CEO of Unilever, who worked in P&G for 26 years, said Unilever may spend 25 billion Euros for acquisitions and add an additional 5 billion Euros in sales in 2010. Before Polman was on board, Unilever spent several years to strip itself of Bestfoods, whose main business is food and was bought by Unilever for 24 billion US dollars. The former CEO of Unilever also sold an additional 19 brands. The acquisition of SaraLee will make the competition between Unilever and P&G more intense.
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"China Time-honored Brand" Xiefuchun will be sold in Wal-Mart
2009-10-12
The Yangzhou "China Time-honored Brand" Xiefuchun series of cosmetics products will be sold in more than 150 Wal-Mart stores in China. Using supermarket as mass distribution channels can help “China Time-honored Brand” enterprises, which are facing an intense competitive market environment, get rid of location limitations and move away from their traditional sales channels. Supermarkets, a new extension channel, can help expanding “China Time-honored Brands” have national and even worldwide impact.
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Starting from June 2010, all the ingredients of cosmetic products should be labeled
2009-09-10
Moisturizing factors, plant essence and natural extracts, what cosmetic ingredients do these terms actually represent? Most consumers have no idea about the composition of the cosmetics they use every day, so it’s very hard for them to judge which brand of cosmetics is suitable for them. October the 1st, the new standard of cosmetic labeling "Consumer Use Cosmetics Generic Labels" will be implemented, which requires all ingredients in cosmetics to be labeled after June 17th, 2010.
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Cosmetics industry structure adjustment of China's imminent
2009-06-10
With its rapid economic development, China has become the world's biggest personal care consumer market. Statistics released by National Bureau of Statistics shows that in 2008, the retail sales of consumer goods,including cosmetics, were RMB 10.8488 trillion, a yearly increase of 22.1%. In the first quarter of 2009, the retail sales of consumer goods increased by 15.0%, of which cosmetics rose by 14.8%. Last year, the outbreak of the global financial crisis disrupted the domestic personal care product industry. For enterprises, maintaining their brand's sustainable development is a key response to the crisis. However, structural adjustment is needed urgently for the entire industry. At present, the main problems in China’s cosmetics industry are the lack of industrial sustainable development, and too large of a focus on the short term. There are still obstacles to harmonious and win-win cooperation between cosmetics companies, industrial innovation and product technology content need to be improved, and energy consumption is too high.
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