On the attack: L’Oréal makes second China fragrance investment

The French cosmetics giant L’Oréal Group has invested in the Chinese home fragrance brand To Summer (named 观夏 in Chinese), continuing its “acquire to grow” strategy as it faces stiff competition amid the rising tide of C-beauty brands. To Summer marks the group’s second investment in a Chinese cosmetics start-up, having taken a minority stake in Documents back in 2022.

The value of L’Oréal’s investment in To Summer has not been disclosed, but it’s being made through Shanghai Meicifang Investment, L’Oréal’s China investment arm, with support from its venture capital fund, BOLD. Shanghai Meicifang was set up in 2022 with the mission to “empower the Chinese innovation ecosystem”.

The announcement of the investment comes just as the group presents its financial results for 2023. L’Oréal’s sales passed the 40 billion EUR mark for the first time, cementing its status as the world’s biggest cosmetics company. The company achieved 5.4% growth in China, a slightly disappointing result after five consecutive years of double-digit growth from 2017-2021.

In light of this, L’Oréal is accelerating its strategy adjustment, pursuing an “acquire to grow strategy” to maintain its market share across both mass-market and premium cosmetics. L’Oréal’s biggest competitor in the luxury segment, Estée Lauder, has also invested in two Chinese brands, Codemint and Melt Season, to address the growing need for products tailored to Asian consumers’ preferences in the global beauty market.

Speaking on the TV show Good Morning Business on February 12, L’Oréal CEO Nicolas Hieronimus said, “In China we have grown by around 5%, and by almost 8% in terms of product sales. Admittedly, these are not the big double-digit years, but we have the largest market share we’ve ever had, around 32%, particularly in luxury goods”. As a result, the company believes it is in a strong position. “We are on the attack in the Chinese market,” he added.


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