Cosmetics: Because it’s no longer worth it

BEAUTY is big business in China. The country’s cosmetics market is worth $26 billion a year, making it the third-biggest in the world. Euromonitor, a research firm, believes it will grow 8% each year from now to 2017.It would seem surprising, then, that some of the world’s best-known brands are giving up on such an attractive market. This week L’Oréal of France, the world’s biggest cosmetics firm, said that it will stop selling its Garnier line of beauty products in China. This came on the heels of an announcement by Revlon, an American rival, that it would leave the country altogether.L’Oréal insists that this is not a step back from the Chinese market, of which it commands an 11% share, but rather a shift in strategy. It says it will henceforth concentrate on selling Chinese consumers its L’Oréal Paris and Maybelline New York lines, which are doing better than the flagging Garnier brand. Revlon has done rather less well in China, which accounts for a tiny share of its global revenues. It is said to have suffered a big fall in sales in recent months and blames this on a slowing Chinese economy.A few years ago, when China’s annual GDP growth was in double digits and its consumers had barely begun to sate their repressed desire for foreign luxury, the firms that sold it set themselves ambitious targets. Now China is coming to resemble a more normal emerging market: still…

Link to article: www.economist.com/news/business/21593466-foreign-cosmetics-makers-are-scaling-back-their-ambitions-china-because-its-no-longer-worth?fsrc=rss|bus

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