Recently, there have been reports that in July, Estée Lauder’s duty-free channel management rights in China will be transferred from the group’s headquarters to the Chinese company. This marks a significant adjustment in Estée Lauder’s duty-free channels in China.
In the past, all duty-free channel products in China were supplied by the group’s headquarters, unrelated to the Chinese branch, and the relevant performance was directly attributed to the group. If this adjustment is implemented, it would mean the end of Estée Lauder’s “dual-track system” in China, which is of great significance to the Chinese market.
It is said that Estée Lauder plans to create a more agile and efficient organizational structure, with the Chinese company having more autonomy in local operations.
According to previous Estée Lauder financial reports, the company once achieved 32.97 billion yuan in revenue from duty-free channels, but this figure dropped to 23.11 billion yuan in the 2023 fiscal year. The decline in duty-free channels has been a major challenge for Estée Lauder’s skincare products and the entire group over the past two years. The adjustment of the duty-free channel management rights in China is directly related to Estée Lauder’s development in the Chinese market.
In Estée Lauder’s latest financial report for the third quarter of the 2024 fiscal year, the company particularly praised the contribution of Asian retail channels to the group’s revenue and stated that the Asian retail channels are recovering.
