L’Oreal affected by the slowdown in China
World’s largest beauty conglomerate L’Oreal reports negative results due to the slowdown in China and “brutal” trading conditions in South Korea and Taiwan, the company said. The group’s turnover from luxury goods in South Korea is down 2-3 percent this year after achieving 8 percent growth last year, L’Oreal’s Asia-Pacific Managing Director Jochen Zaumseil told Reuters on the sidelines of a press event on Monday.
L’Oreal’s luxury products, which include Yves Saint Laurent, Giorgio Armani perfumes, cosmetics and make-up as well as Biotherm and Lancome cosmetics, represent about 25 percent of the company’s total sales.
South Korea and Taiwan are among Asia’s most export-dependent countries, making them vulnerable to weakness in global demand. China, the main driver of demand for luxury goods in recent years, has suffered a slowdown this year, though L’Oreal was still gaining market share, Zaumseil said. “We don’t believe (the slowdown) is sustainable,” Zaumseil said. We are expanding our territory into second and third-tier cities – we will fuel our growth through expansion.” L’Oreal’s Asia-Pacific turnover grew 12.5 percent overall in the first half of this year.