Today’s guest:

Stephane Rinderknech, Member of the L’Oreal Group Management Committee and CEO of L’Oreal China

Grasping the opportunity of CIIE to roll out more widely popular international brands

Q: What expectations does L’Oreal Group have for participating in the CIIE?

A: As one of the first group of French enterprises that entered the Chinese market after the reform and open-up, L’Oreal has been in China for two decades. We share a destiny with China and have been privileged to witness and benefit from China’s policy of opening up. Today, China has become the second largest market of L’Oreal in the world.

In April of this year, L’Oreal signed an agreement as the largest daily used chemical enterprise to take part in the first CIIE. It is a great honor for us to join in the exhibition as a key enterprise in the cosmetics industry. We will present to Chinese consumers appealing quality brands and products, innovative R&D technologies, new revolutionary retail models and leading concepts in sustainability.

L’Oreal expects that the CIIE will be a window between China and world trade. It is expected to not only promote trade exchange but also provide Chinese consumers with more choices in the process of the consumption upgrades, and better satisfy the longings and demands of the Chinese people for a high quality, good life, thereby advancing the long-term healthy development of the market.

Q: What products will L’Oreal bring to the exhibition? Are there any products that have never entered the Chinese market before?

A: L’Oreal Group has up to 100 name brands across the globe. In China, we have put on sale 22 of them and have continued to roll out new creative products.

Take 2017 as an example. L’Oreal rolled out more than 365 new products in the Chinese market. We plan to avail ourselves of the opportunity of this CIIE to roll out more international brands welcomed by consumers, and we plan to first release our new brands and new products in the Chinese market, in terms of both Asia and the rest of the world.

At the same time, we expect the competent authorities to roll out special policies by putting individualized products on record so that we can put on sale more new customized products, satisfying the needs of Chinese consumers for individualized and diversified beauty.

“A New Age of Beauty” is unfolding against the backdrop of Chinese consumption upgrades

Q: Who will attend the CIIE as the representatives of companies under L’Oreal?

A: In January, a delegation from the Ministry of Commerce of the PRC visited the headquarters of L’Oreal in Paris. After that, Jean-Paul Agon, the Chairman of the Board and CEO of L’Oreal Group wrote to the leaders of the ministry to express L’Oreal’s intention to participate in the first CIIE.

Mr. Jean-Paul Agon and the representatives of the management committee of the group, including the CEO of L’Oreal China, will arrive on the scene during the import expo.

Q: How does L’Oreal view the trend for the Chinese consumption upgrades? L’Oreal has operated in China for years, and what is the next step?

A: As Chinese consumption is upgraded, sensitivity to prices will translate into the pursuit of quality.

More and more consumers will depart from utility-based consumption and pursue leisure-based consumption, and they will choose high-end, individualized, exclusive brands and products with service at a premium. This is an immense opportunity for L’Oreal.

In 2017, L’Oreal has scored double digit robust growth. We believe a “New Golden Age of Beauty” is unfolding against the backdrop of the Chinese consumption upgrades. Faced with this opportunity, L’Oreal has created a corporate strategy called the five forces China model”, and it is as follows:

Appealing Brands and Products—strengthening and enriching the current brand matrix while cementing the groundwork for victory;

Outstanding Innovation—working harder to meet the demands of consumers and staying committed to creating new demand;

Creative new marketing—exploring revolutionary content and reaching out to targeted consumers through all channels so as to foster super consumers;

Leading new retail—creating new channels by integrating online and offline services and creating an immersive experience that fills the whole consumption path.

Social values—constantly pushing the boundary of corporate social values and giving beauty a brand-new definition.

We hope to exert ourselves across 5 dimensions to continue to lead the Chinese cosmetics market while remaining strong and powerful.

Q: Currently, the Chinese cosmetics market is competitive. What measures will you take to continue to strengthen your share?

A: Benign competition is beneficial to the development and prosperity of the market and will benefit the consumers; we welcome such competition.

We do not think the strongest competition comes from our peers, instead it comes from the changing times and our competition with ourselves.

The environment we are in today and consumer demand are changing much faster than in any previous age in history. This is particularly the case in China. The changes in the past five years have been more profound than those of the previous 30 years. We expect the changes in the next 2 years to exceed those of the past 5 years. The winners of the future will be those who can provide the products, services and experiences that consumers most long for.

Expecting Shanghai to be an import trade platform with greater international influence

Q: China is quickening up its transformation of the functions of government in an attempt to create a better business environment for foreign investors. Do you have any experience in this respect? What suggestions do you have for improving the business environment?

A: In recent years, the stride of Chinese reform has been getting longer and longer, and the business environment has continued to improve. L’Oreal feels more and more confident about the Chinese market.

Since 2016, there has been a reform of the consumption tax on cosmetics, and duties have been pushed downward several times. This made it possible for us to invest more in innovation, research and development and, in turn, reward the consumers.

In 2017, L’Oreal has rolled out over 365 new products in China, bringing Chinese consumers a wider range of choices.

In terms of market access, on March 9, 2017, L’Oreal became the first company to obtain an enterprise account number and product record-filing certificate in the Shanghai Pudong non-special import record-filing trial.

Products imported through record-filing could be put on the shelf within 5-6 working days instead of the 3-5 months in the past. As a result, these products could show up in the Chinese market simultaneously with the rest of the world, stimulating domestic consumption.

This year marks the 40th anniversary of the China’s reform and open-up. Recently, Shanghai issued the 100 measures pertaining to the further opening-up, and we welcome and support these policies.

We believe the implementation of these new policies will help to develop Shanghai into an import trading platform with a larger global influence, and they will also create a more appealing, legitimate, international and convenient business environment. All of this will benefit companies and inject dynamism into the market, ultimately creating a better life for the people.