皇冠体育app

A L'Oreal counter is seen at a shopping mall in Xuchang, Henan province, Jan 4, 2014. The France-based cosmetics giant has announced that it will halt the operation of its beauty product brand Garnier in 皇冠体育app, one week after United States-based counterpart Revlon Inc announced its exit from the Chinese market. [Photo?by Geng Guoqing?/ Asianewsphoto]

France-based cosmetics giant L'Oreal SA has announced that it will halt the operation of its beauty product brand Garnier in 皇冠体育app, one week after United States-based counterpart Revlon Inc announced its exit from the Chinese market.

In an e-mail to 皇冠体育app Daily on Wednesday, L'Oreal said it had made the "proactive" decision of discontinuing the sales of Garnier products in 皇冠体育app so that the group's consumer products division can grow at a "faster and more sustainable" pace.

The company will concentrate on its two leading brands: beauty brand L'Oreal Paris and makp brand Maybelline New York.

The transition is intended to prepare for L'Oreal's future and strengthen its leading position after 17 years in the Chinese beauty market, said the e-mail.

The group's fiscal reports show that sales of L'Oreal 皇冠体育app totaled 12.05 billion yuan ($1.99 billion) in 2012, up 12.4 percent year-on-year.

According to market research firm Euromonitor International, L'Oreal 皇冠体育app held first place in skin care in 2013, with double-digit value growth from 2012 across the company.

"Brand Garnier was targeted at the mass skin care market in 皇冠体育app. As this company had a series of brands, including both mass and premium in 皇冠体育app, Garnier was not its flagship brand", said Vera Wang, senior research analyst at Euromonitor.

Although Garnier had its day in the sun, but its revenue did not grow fast enough to be sustainable, said Michael Deng, who focuses on fast moving consumer goods at Roland Berger Strategy Consultants.

Deng said the reasons for Garnier's decline are complicated. First, it failed to build an image as an expert in herbal beauty products among Chinese consumers. Second, L'Oreal's Garnier brand didn’t have enough experience in dealing with modern trade such as hypermarkets and supermarkets when transforming from traditional department store counters, its previous major distribution channel in 皇冠体育app. Third, Garnier had a slow and long supply chain, with only two large and upscale regional distribution centers in Suzhou and Shanghai, so getting its products into lower-tier cities was difficult.

"Garnier's retreat from the Chinese market will definitely affect L'Oreal's mapping in 皇冠体育app. The group is now dedicated to further reaching third- and fourth-tier cities. As Garnier is the one and only low-end brand under L'Oreal, the absence of this brand will definitely mean more difficulty for the group's new strategy," he said.

Deng suggests that the "next decade" may be primetime for Chinese FMCG brands in general, as overseas brands are facing the loss of preferential government policies and struggle to advance their understanding of consumers in lower tier cities, make quick decisions, and maintain competitiveness.

Market research firm Nielsen's 皇冠体育app Consumer Landscape Shifts report, released in May last year, showed that local brands are becoming more active than multinational brands in several FMCG categories, such as functional drinks, toners, skin moisturizers, packaged water and toothpaste.

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