BW Confidential - Issue #10 - May/June 2012 - (Page 54)

Market watch: China Industry viewpoint Up for discussion Four industry experts give their views on consumer trends, retail and how the beauty market will evolve in China by Raphaëlle Choël Stéphane Rinderknech L’Oréal Luxe China vice president & gm How do you see growth in the Chinese beauty market evolving? Carol Shen Estée Lauder China managing director Anne-Véronique Bruel Sephora president China Christian Nothhaft Watsons China ceo SR: The luxury market has been growing fast in the past few years in China. Every year we wonder whether it is going to slow down, and every year the market delivers a good surprise. We estimate our potential target customer base to be between 12 to 15 million for luxury cosmetics. Every year, this base enlarges as more consumers crave luxury brands. Retailers are also attracting new customers with different profiles, like Sephora which attracts younger customers searching for alternative shopping experiences and products to the classic channels. Of course, there may be ups and downs in this fast growth trend, but in the mid to long term, I am confident that China is a bull market. CS: According to the China Association of Fragrance Flavour and Cosmetics Industry, the official industry association, total sales volume of cosmetics in China exceeded Rmb153bn ($24.3bn) in 2010 and saw double-digit growth in 2011. There is strong growth potential in prestige beauty, especially skincare, for which the Chinese market remains our largest growth opportunity. AVB: We look at the China market optimistically. Both historical trends and the recent sales performance indicate that 2012 will be another fruitful year. The excitement about doing business in China isn’t only that we are adapting to the market, but that the market is also constantly evolving. While skincare is the leading sector, demand for fragrance has been increasing over the past two years. CN: Modern retailing formats, such as supermarkets, hypermarkets, department stores and beauty specialist retailers are expected to grow faster than more traditional formats. Better shopping environments, highly efficient logistic systems and competitive retail prices are their major advantages. Thanks to a gradual improvement in the quality of life and a rising disposable income, health and beauty specialist retailers enjoy stable growth. The men’s grooming category is also the upcoming focus of retailers and suppliers. May-June 2012 - N°10 - BW Confidential 54

Table of Contents for the Digital Edition of BW Confidential - Issue #10 - May/June 2012

- Brand & retail news recap
- Companies on the move
Take note Market facts, figures & trends
Best of BW Highlights from our e-publication
Launches The latest in fragrance, skincare & make-up
Interview Clinique global brand president Lynne Greene
Insight: Skincare
- Category overview
- Retail technology
- Retail viewpoint
- The latest trends
- Spas & healthcare
- Spa case studies
- Inspiration from Apple
- Store concepts
Market watch: China
- Country overview
- Industry viewpoint
- Prestige retailing
- Taobao & the internet
Digital focus Social media strategies
Strategy spotlight Case studies to inspire
Travel retail: Asia Pacific
- Regional overview
- India
- Interview: Delhi Duty Free Services coo Arun Barathi
Radar Six up-and-coming beauty brands
- Make-up packs
- Innovation showcase
Last word Metis Insights director Stéphanie Morou

BW Confidential - Issue #10 - May/June 2012