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Beauty powers digital makeover

China Daily | Updated: 2017-10-18 07:40
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Jean-Paul Agon, chairman and CEO of L'Oreal. [Photo provided to China Daily]

Editor's Note: The 19th National Congress of the Communist Party of China starts today. In the runup to the meeting, China Daily interviewed business leaders from major multinational companies for their views on economic developments here and the country's global leadership role.

Jean-Paul Agon is the chairman and CEO of L'Oreal, the largest cosmetics group in the world.

What is the most unforgettable experience you have had in China?

Twenty years ago when I founded L'Oreal APAC (Asia-Pacific) Zone with our team, I predicted that China would become the No 1 country in terms of economic importance in the world, as well as for L'Oreal.

We started here with a dream of "putting a lipstick in the hands of every Chinese woman", and I am extremely proud that we have constantly changed people's lives with the power of beauty. We have given them confidence, happiness and fulfillment.

Twenty years later, China has become the second largest market for us and we are thrilled to be the biggest beauty group in the country.

What is the biggest challenge China faces and how can the country overcome it?

Environmental protection and green development are crucial areas. As a responsible corporate citizen, L'Oreal wants to be a leader in sustainability. We share the same belief with China that sustainability is an irreversible trend.

By integrating sustainability in the core business, you can solve the biggest challenges facing society.

What will China be like in five years' time and what is the country's long-term future?

China has changed more in the past three years than it has in the last 30. In fact, its transformation will definitely accelerate in the next five years with 500 million new consumers through urbanization and an expanding middle class.

What are the most innovative trends and products in China?

Digital immediately springs to mind because of the government's long-standing efforts to push innovation. China is at the forefront of digital innovation through world-class tech giants such as BAT (Baidu Inc, Alibaba Group Holding Ltd, and Tencent Holdings Ltd).

Digital is also at the heart of L'Oreal. We have pushed forward our digital evolution (by rolling out) four strategies. We want to become a data-driven firm, embracing e-commerce and reinventing marketing models with a product plus service.

Indeed, our close partnerships with domestic companies, such as Alibaba, JD.com, Vip.com and Tencent, etc, have made China one of the most impressive success stories for the group in digital innovation.

China is known as a manufacturing giant, but what will be the nation's "calling card" in the future?

Definitely e-commerce. China has established one of the world's most globalized and effective e-commerce networks. Along with world-class technology, this model has reshaped the way businesses around the globe connect with each other and create commercial value.

As a beneficiary and an innovator of e-commerce, L'Oreal identifies with this key digital strategy. The group's e-commerce business has increased by a staggering ten fold in the past five years, and has accounted for more than 20 percent of total revenue in certain divisions.

It has set the standard for our group worldwide. But what make us really proud is that most of L'Oreal's e-commerce innovation originated in China. So, we are determined to strengthen our partnerships with domestic e-commerce companies to break new ground.

As a Fortune 500 company, which sectors offer the most opportunities for development?

We are facing a new world in China, where beauty will be essential to the lives of people. This will be a golden era for beauty with an unprecedented makeup boom. In fact, the country is becoming the beauty capital of the world.

But then the culture of beauty is deeply rooted in the tradition of the country. So, we are well-positioned to grasp opportunities and build a new L'Oreal China, which is more Chinese consumer-centric, more aspirational, more digital and more sustainable. I believe the day is not far off when the country becomes the world's largest beauty market.

What has been China's biggest achievement during the past five years and its most notable change?

Handling such a large economy with skill, while opening up sectors to achieve steady growth, has been a remarkable achievement. Also, shifting the focus on development, quality, efficiency and sustainability has been crucial.

Alongside economic progress has been the evolution of the younger generation when it comes to self-fulfillment. With a firm belief that beauty has the power to change people's life, we are proud to have been part of this evolution process.

How do you view China's role in today's world?

The country is not just a key market for global trade. It has become an innovation powerhouse. In fact, China is leading a variety of phenomenal trends and innovations, such as the e-commerce boom and the O+O (offline plus online) channel revolution.

Besides its vital role in the world economy, China has demonstrated unprecedented confidence and leadership in global governance. The country is a responsible and active player, and its continued development is an opportunity for all of us.

What opportunities will the Belt and Road Initiative throw up for China and the rest of the world?

The Belt and Road Initiative is accelerating the economic globalization process. It allows multinational companies, such as L'Oreal, to further expand its worldwide footprint.

We are more than willing to participate in potential initiatives and to sustain our high brand value. We have a good reputation and we plan to bring more products to more consumers.

What factors will boost China's growth this year and in 2018?

We are happy to see that China's supply-side structural reform has gained momentum by further opening up the market. This trend is also expected to produce more competition, which will strengthen the domestic industry, and further activate the dynamics of China's overall economy.

We will continue to strive to be first in meeting the evolving desires of our customers and lead the way in new trends. We will also set higher standards in our sector in China. By doing this, we will continue to make (a major) contribution to the country's prosperity.

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