Estée Lauder takes on global markets

Considering its presence in 150 countries, Estée Lauder Cos. Inc. is, without a doubt, a global business, with the majority of its sales occurring outside North America, reported WWD.

China has proved to be a particularly key market for Estée Lauder, and Cedric Prouvé, group president, international, for The Estée Lauder Cos. Inc., is clearly aware of how critical it could be for the beauty behemoth.

“China keeps me up at night,” he declared to WWD. “There are a number of challenges to succeeding in China, but succeeding in China is succeeding globally.”

If the company manages to establish itself in China, this new presence will spill over into reaching Chinese shoppers in markets around the world, from France to the United States.

For the past 10 years the company has made progress toward this goal, with sales increasing 33 percent in fiscal 2011 and the Hong Kong market rising 22 percent during the same timeframe.

The company has high expectations of those numbers growing even further.

“China represents about 4 percent of our overall business, but has contributed 10 percent of our overall growth,” Prouvé reported.

Identifying what the average Chinese shopper wants will be crucial. “(The typical Chinese consumer) is smart, demanding, prefers skin care, which accounts for over 70 percent of our business in China — and uses a complex beauty routine, often as many as seven products, morning and night,” Prouvé said.

Of Lauder’s 11 labels sold in China, luxury brands have been the most popular.

Behind the strategy is a great deal of money, to be directed toward television advertising to promote its brands. “The more awareness we raise, the more business we will generate,” he explained.
The company will not be able to secure a strong following in China without facing some critical challenges. Obtaining and keeping talent ranks as Prouvé’s chief concern, with regulatory issues following close behind.

Estée Lauder has also set its sights on Brazil, an important market that has witnessed 25 percent growth last year alone. The company first ventured into the Brazilian market five years ago, enticed by Brazil’s status as the second or third largest consumer of beauty products internationally. Today, the cosmetics giant has opened several stores in Brazil and is expanding its e-commerce in the South American nation.

“Brazil has been a very protected and tricky market, but things are changing,” Prouvé said.

Estée Lauder is also experiencing substantial growth in other international markets, including the Middle East, Vietnam, South America, Russia and Turkey. Prouvé is also interested in expanding into Africa, which he labels a “strong opportunity.”

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LaduLUX via Estée Lauder

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