The world's largest beauty company sees China as its digital 'laboratory'

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China is 'a great laboratory' for beauty giant L'Oreal in terms of how it tries out new technology, according to its chief digital officer. It is the 'most digitalized' country in the world, Lubomira Rochet told CNBC. E-commerce makes up 40% of L'Oreal's sales in China, up from about 2% in 2012.

It does not break out sales in China, but its Asia-Pacific division had revenues of 7.4 billion euros in 2018, up 24.1% on the previous year, on a like-for-like basis. That compares to sales of 7.2 billion euros in North America, up just 2.7% on the previous year.

Tech has also allowed L'Oreal to reach new customers in smaller Chinese conurbations, known as tier three, four and five cities, and its presence on e-commerce sites such as southeast Asian companies Lazada and Shopee has meant finding new shoppers throughout the region. "They have been great recruitment engines for us, and really allowed our brands to be discovered much widely than they used to," Rochet said.

Like many companies, L'Oreal is working on a digital transformation, and Rochet is tasked with growing its online sales, as well as managing all of the company's regional and divisional marketers, overseeing its marketing investments, digital talent and open innovation. She reports to L'Oreal Chair and Chief Executive Jean-Paul Agon.

"Digital is the single biggest driving force in marketing transformation," she said, adding that digital marketing techniques are in a state of "permanent revolution." Many of L'Oreal's consumers have moved online but with a similar expectation to how they experience its brands in real life. For example if someone goes to a high-end make-up hall at a department store, they may get advice from a beauty advisor, a professional who can recommend relevant products.

 

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