Abstract

France based L’Oréal entered China in 1996 after the government relaxed the norms for foreign investment in the country. It formed a subsidiary named L’Oréal China and began its operations in 1997. The case details how the products of L’Oréal China gained popularity in the country. Encouraged with its early success, the company introduced more international brands in China in order to gain market share. The case also highlights other strategies adopted by L’Oréal China to increase market share like investing in research to develop new products that suited the Chinese hair and skin type, recruiting local employees and capturing the mass market segment through acquisition of local brands etc. The case also includes a note on the cosmetics market in China and presents the challenges faced by the company in the country.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Analyze the opportunities and challenges presented by an emerging, fast growing market for cosmetic products like China
• Understand the entry and expansion strategies of L’Oréal in China
• Study the unique characteristics of a rapidly growing cosmetics market like China
• and Examine the benefits and challenges of managing a multi-branded cosmetics business in a developing country.

Keywords

L'Oréal, L'Oréal China, Localization Strategies, Cultural Differences, Diversified Product Portfolio, Brand Innovation, Brand Awareness, Multi-brand strategy, Market Segments, Product Segments, Advertising, Brand Acquisitions, Mass Market, Cosmetics, Economic Environment, P&G in China, Cosmetics Industry in China, Maybelline, Research and development, Chinese consumers, Celebrity Endorsement, Distribution, Counterfeit products