Here’s How Estee Lauder Is Growing Its Presence In China

When Estee Lauder made its acquisitions of Becca Cosmetics and Too-Faced last year, it was said that the primary objective of the company was to capture the millennial beauty users of its largest market, North America. However, it seems that brands like these might help to improve the company’s sales growth in other important markets in the future. These brands are known for their cosmetics that suit diverse skin tones, they boast of multi-channel presence, and lastly, these brands are huge hits with social media beauty influencers who have millions of followers to their credit. Social media influencers are becoming one of the most important drivers for beauty sales in important markets. For example, in its last quarter (Q3 FY 2017), Estee Lauder witnessed an over 20% y-o-y growth in its sales in China and the influence of the social media celebrities might be one of the biggest reasons for this significant growth.

Why Is China An Important Market For Estee Lauder?

China happens to be the fastest growing market for the company at present with almost 40% of the sales coming in this region from buyers aged 18 to 30. The country is known for its high demand for luxury items and luxury beauty products are no exception. China’s makeup market is expected to reach around $7.4 million by 2021, reflecting over 70% growth when compared to its 2016 figures. The company currently has a 14% market share in China while L’Oreal has a 21% share. If its sales growth continues in China through the surge in makeup sales and via Chinese tourists in travel retail, then there might be a possibility for Estee Lauder to surpass L’Oreal in the country.

How Are Social Media Influencers Helping Grow Estee Lauder’s Sales?

According to a statement given to Bloomberg by Fabrice Weber, Estee Lauder’s President in Asia Pacific, in the past, cosmetics such as foundations, mascara, and eye shadows weren’t popular with Chinese women. However, due to the influence of the popular social media bloggers and vloggers in Chinese websites such as Weibo, Youku, iQiyi, and Tudou, currently the Chinese millennials are embracing these items in their makeup itineraries. This is positively impacting Estee Lauder’s sales in the region. Hence, the trend of buying companies which are popular with the social media influencers might be a very important way for beauty leaders to increase their presence in important markets right now and also in the near future.

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