L’Oreal focuses on strong key brands

French cosmetics and skincare giant L'Oreal will stop selling the Garnier brand in China as the company seeks to focus on its other key brands as it copes with a slowing sales growth.

Its decision will help the company's Consumer Products Division to grow faster and more sustainably by focusing on its two leading brands — L'Oreal Paris and Maybelline New York, L'Oreal China said in an e-mail statement to Shanghai Daily yesterday.

The French cosmetic giant has seen its sales growth in its third-largest market slowing in recent years although it has kept a double-digit growth for more than 10 years.

L'Oreal China recorded sales of 12.1 billion yuan (US$2 billion) and annual growth of 12.4 percent in 2012, but this was down from 18 percent in 2011.

China is the world's third-largest cosmetics market with sales of 96.3 billion yuan in 2012, behind Japan and the United States, according to Euromonitor International.

The domestic market has grown around 20 percent annually in the previous two years despite the fluctuating macro-economic situation.

Alexis Perakis-Valat, chief executive officer of L'Oreal China, said in an interview last year that the company is considering introducing new brands into China to tap untapped demand and drive sales. But he didn't elaborate on the details.