For greater than a decade, China’s aspirational customers, spurred by way of a fast-growing economic system and emerging wages, snapped up merchandise from cosmetics giants like L’Oreal, Estee Lauder, and Shiseido. Earlier than the COVID pandemic hit, China gave the impression set to overtake the U.S. as the arena’s greatest make-up marketplace.
The ones growth occasions are over, as extra Chinese language customers now flip to up-and-coming native manufacturers, like Mao Geping and Florasis.
L’Oreal’s gross sales in Mainland China dropped ultimate yr, shrinking its general North Asia gross sales by way of round 3%. The Chinese language marketplace, the majority of the company’s North Asia income, now accounts for 17% of crew gross sales, down from 23% in 2022. The French company continues to name China a very powerful marketplace, however has reportedly began chopping its retail team of workers because of slower Chinese language call for.
As China stagnates, L’Oreal is now taking a look to areas, just like the Heart East and Southeast Asia, as a supply of enlargement.
SAPMENA—L’Oreal’s time period for “South Asia Pacific, Heart East, and North Africa”—will quickly “play a far larger function” in relation to good looks, says Vismay Sharma, who oversees the area for the French cosmetics company.
L’Oreal, No. 91 on Fortune’s Europe 500, reported gross sales of one.1 billion euros ($1.19 billion) for the primary quarter of 2025, up 12.2% year-on-year, throughout SAPMENA and Sub-Saharan Africa (SSA).
That’s nonetheless small in comparison to different areas, sitting a ways in the back of Europe, North The usa and North Asia. However whilst SAPMENA-SSA most effective contributed 9.2% of L’Oreal’s quarterly income, it was once the one area to log double-digit enlargement.
SAPMENA covers an enormous swathe of the globe, stretching from Morocco all of the manner right down to New Zealand just below 19,000 kilometers away. The area’s 35 markets quilt 3 billion other people, or about 40% of the arena’s inhabitants, but most effective accounts for 10% of worldwide good looks gross sales. “It has to return in combination, and in the end demographics must win,” Sharma says.
SAPMENA’s fast enlargement doesn’t marvel Sharma. “The shoppers on this a part of the arena are about 5 years more youthful than the remainder of the arena, are living in aspirational societies and in economies which might be rising immediate,” he says.
China has proved to be a tough marketplace for international cosmetics companies post-pandemic. Slow China gross sales have dragged down the monetary result of U.S. company Estee Lauder and Japan’s Shiseido.
A slow economic system and stagnant intake are partially accountable. However there’s additionally new pageant. “C-Attractiveness” manufacturers are beginning to pick out up steam amongst Chinese language customers, with new manufacturers going viral on Douyin, the Chinese language model of TikTok, and different social media platforms. (L’Oreal is paying consideration, making an investment in native Chinese language manufacturers like To Summer season)
Nonetheless, Sharma thinks China gives classes for SAPMENA.
Southeast Asia, like China, has extremely attached customers who’re used to e-commerce and livestreaming. As an example, Sharma notes that over 50% of L’Oreal’s industry in Vietnam comes from e-commerce.
That is much less true of the Heart East and North Africa.
“Whilst you take a look at the ecosystem of good looks over there, you continue to don’t have TikTok Store. They’re nonetheless a couple of years in the back of platforms like Shopee, like Lazada,” he says.
But customers within the Heart East proportion an identical personal tastes to these in Southeast Asia. “Expectancies for good looks are very an identical. We will see aspirations with regards to roughly hair, pores and skin, lips, and eyes,” Sharma says, pointing to a choice for longer black hair for example.
That provides L’Oreal an opportunity to develop within the area. “Our talent to create content material at scale within the GCC turns into an enormous benefit,” Sharma says.
This tale was once firstly featured on Fortune.com
