SHANGHAI Jan 8 French cosmetics giant L'Oreal
SA has halted sales of Garnier beauty products in
China to focus on other brands, a week after U.S. rival Revlon
Inc pulled out completely from the slowing China market.
The firm will concentrate on its L'Oreal Paris and
Maybelline New York product lines, a China-based spokeswoman
said in an email to Reuters on Wednesday. Those brands have been
performing more strongly in China.
China's $25.9 billion cosmetics market is the third biggest
in the world. It is expected to grow 63 percent for the five
years to 2015, according to consumer research firm Euromonitor.
"To strengthen our leading position, we have decided to
discontinue the sales of Garnier products in China and focus our
efforts on our two leading brands - L'Oreal Paris, the number
one beauty brand, and Maybelline New York, the number one
make-up brand in China," the spokeswoman said.
L'Oreal has said the China market, its third biggest where
it has a market leading 17 percent market share according to
Euromonitor, was "slowing, although still dynamic", according to
its third quarter financial statement in October.
"As growth in China slows brands are starting to evaluate
their portfolios in China and to focus on where they see the
biggest growth," said Torsten Stocker, Hong Kong-based partner
with consultancy firm AT Kearney.
Revlon, owner of the Almay cosmetics brand and Sinful Colors
nail polish, plans to exit China where sales of its cosmetics
have been falling, the U.S. firm said at the end of December. It
will cut over 1,000 jobs as part of a move aimed to save about
$11 million a year.
The Chinese market is full of potential for Western brands.
The Chinese cosmetics sector more than doubled in size between
2008 and 2012, according to a report last year by Fung Group
that cited the National Bureau of Statistics in China.
But China is also a complex market with many pitfalls for
foreign companies, while a slowing economy and crackdown on
extravagance has weighed on luxury brands sales.