L'OREAL Essay

5062 Words Mar 8th, 2014 21 Pages
HKU570

ZHIGANG TAO

L’ORÉAL: EXPANSION IN CHINA
After acquiring Mininurse at the end of 2003, this new Chinese acquisition of Yue-Sai only serves to confirm our determination to step up the pace of growth in China.
- Lindsay Owen-Jones, CEO, L’Oréal1

On January 26th 2004, French cosmetics giant L’Oréal signed an agreement to acquire a famous
Chinese cosmetics brand Yue-Sai. 2 The acquisition came shortly after L’Oréal made another successful bid for Raystar Cosmetics (Shenzhen) Co. Ltd.’s skin-care brand, Mininurse, in
December 2003.3 L’Oréal was already very successful in both China’s high-end and middle-range cosmetic markets. The acquisitions of Mininurse and Yue-sai indicated that L’Oréal would focus more on the mass
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€1 = US$1.227 on January 25th, 2006.
6
Active cosmetics refer to those products only sold at the pharmaceutical counters.
7
Jean-François Grollier’s speech made on July 4th 1997, [www document] www.loreal.com (accessed August 3rd 2005).
8
“L’Oréal Research”, [www document] www.loreal.com (accessed August 3rd 2005).
5

2

06/282C

L’Oréal: Expansion in China

such as chemistry, biology, medicine, physics, toxicology, etc. In 2004 alone, L’Oréal applied for
586 patents.9
Brand Management
Brand management in L’Oréal was quite complex as it had the most diversified brands under its umbrella. The brand portfolio grouped multiple L’Oréal brands under four divisions: consumer products division, luxury products division, professional products division and active cosmetics department [see Exhibit 5]. The consumer products division encompassed all the brands distributed through mass-market channels to reach as many consumers as possible. The luxury products division offered a range of prestigious international brands, selectively distributed through perfumeries, department stores and duty-free shops. The professional products division offered special haircare products for use by professional

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