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Volume of sales goes up by 30% for L'Oreal
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08:51, February 27, 2008

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SHANGHAI: L'Oreal SA, the world's largest cosmetics company by revenue, aspires to become the No 1 in terms of cosmetics and beauty product sales in China on the back of its strong make-up product sales, technology innovation and product value enhancement.

L'Oreal China registered a strong sales volume of 5.45 billion yuan in 2007, an increase of 30 percent over the previous year. Sales in China account for 4 percent of the cosmetics giant's global market pie, making it one of the 10 most important markets worldwide for L'Oreal.

"We have a reasonable goal to become the No 1 over the next three to five years, if we take our future business expansion plan into consideration," said Paolo Gasparrini, president of L'Oreal China, yesterday in Shanghai.

But he didn't elaborate on the company's business expansion plans.

Gasparrini based his prediction on the company's growing market share in China over the past two years. In 2006, L'Oreal accounted for 9.6 percent of the country's cosmetics products market. The figure rose to 11.2 percent in 2007, reducing its gap with market leader Procter & Gamble.

Despite the strong performance, Gasparrini admitted that consumption of cosmetics products in China remains weak. He said that in France, where L'Oreal is headquartered, the spending on L'Oreal products per capita amounts to $44.4 a year, whereas in China it is less than $1.5.

Gasparrini is still confident of the bright prospects of the cosmetics sector in China, noting the fast rise of per capita income in China will create strong business potential for the company.

Entering China 10 years ago, L'Oreal ranks second in terms of market share and sales in the country. Apart from its high-end cosmetic brands such as Lancome and Biotherm, it has been seeking to tap China's middle- and low-end mass products.

It purchased Mininurse and Yue-Sai, two well-known Chinese brands, in late 2003 and early 2004, enhancing its presence in the hair-care and skin-care sectors.

The company has launched three plants in China, which produce about 96 percent of all its cosmetics products sold here. Besides China, L'Oreal has also been targeting other fast-growing markets such as Brazil and Russia, seeking new profit engines.

On Nov 15, L'Oreal concluded an agreement for the acquisition of 100 percent of Canan, a Turkish hair-care company.

Source:China Daily

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