In 2018, the L’Oréal Group first proposed the strategic goal of becoming the “world’s first beauty tech company.”
If at that time, “beauty tech company” was still an abstract concept in the beauty industry. Today, five years later, “technology” has permeated every aspect of this global beauty giant. At the sixth China International Import Expo held in November this year, L’Oréal showcased 18 cutting-edge beauty tech products and displayed the results of open innovation with dozens of start-ups from North Asia, presenting a clear map of beauty tech warfare.
In fact, in the past few years, L’Oréal China has created the “Big Bang Beauty Tech Challenge” and the “Beauty Tech Fund” focused on “technology.”
Recently, in interviews with media outlets such as CHAILEEDO, the President of L’Oréal North Asia and CEO of L’Oréal China, Fabrice Megarbane, firmly stated, “We believe that beauty tech will definitely create the beauty of the future. We also firmly believe that technology will disrupt the beauty industry.”
Technology has always been and will continue to be the main driving force propelling L’Oréal forward like a giant ship.
L’Oréal’s “Eighteen Martial Arts”
To some extent, L’Oréal’s century-old history is also a history of technological development, with technological progress running through various stages of ingredient and product innovation and making breakthroughs in safety, effectiveness, and convenience of beauty products possible.
Over a hundred years ago, L’Oréal founder Eugène Schueller invented the world’s first safe synthetic hair dye formula, rewriting the hair dye market and establishing the gene of L’Oréal as a “technology enthusiast.” In the following century, in just the field of hair care, L’Oréal has led dozens of trends.
“L’Oréal is a faithful supporter of technology. We invest over 1 billion euros in the field of technology every year,” said Fabrice to the media. “This fully demonstrates our commitment to innovation, technology, and the firm belief in creating beauty tech and leading the transformation of the beauty industry.”
Breaking it down, beauty and technology intersect and integrate in four major directions: production and research, operations, consumer experience, and future cutting-edge technologies. In these aspects, L’Oréal has not only achieved fruitful results but also continues to empower them with “new cores” through technology.
In terms of production and research, the well-known active anti-aging ingredient Pro-Xylane was originally independently developed by L’Oréal in the early 21st century and has been widely used in major brands under L’Oréal, such as Helena Rubinstein, Lancôme, and L’Oréal Paris.
It is reported that L’Oréal has applied for over 70 related patents worldwide for Pro-Xylane alone. While many Chinese domestic brands are betting on Pro-Xylane, L’Oréal is focusing on innovative formulation technologies to enhance the skin absorption of Pro-Xylane.
L’Oréal’s innovation breakthroughs go beyond Pro-Xylane. This year, the newly released La Roche-Posay Anthelios UVMune 400 and the cutting-edge scientific anti-aging technology REGENAMIDE-22™ showcased at the CIIE are the culmination of decades of scientific research by the L’Oréal Group. For example, REGENAMIDE-22™ is the crystallization of 48 years of La Roche-Posay’s meticulous research in dermatology and 30 years of L’Oréal’s scientific anti-aging research.
It is worth mentioning that “anticipating new product research” is also one of the focuses of the “L’Oréal Big Bang Beauty Tech Challenge.” Recently, L’Oréal made a minority equity investment in the winning company “Shanhai Innovation,” which is one of the leading companies in the field of supramolecular biomaterials.
As Fabrice said, “We have both product-related innovations and deep-level, long-term innovations involving molecules and applications.” He stated that these active ingredients will become part of future beauty products with higher efficacy and ecological sustainability.
In terms of improving organizational and operational efficiency, L’Oréal China, represented by the L’Oréal Suzhou Smart Center, has introduced world-leading automated warehousing and logistics equipment and technology, using automated guided vehicles for “unmanned handling.” It is reported that the Suzhou Smart Center is expected to achieve a threefold increase in annual D2C parcel production by 2025.
In addition, in 2025, a brand-new high-end cosmetics intelligent operation center is also expected to rise in Nantong, Jiangsu Province, complementing the Suzhou Intelligent Operation Center. It is said that the Nantong Intelligent Operation Center will also be equipped with world-leading logistics and robotics technology.
At the signing ceremony of the Nantong Intelligent Operation Center, Antoine Vanlaeys, Chief Operations Officer of L’Oréal Group, said, “The rapid growth of D2C orders and the continued prosperity of e-commerce businesses pose higher requirements for our operations and supply capabilities in China, and also indicate the increasing demand from consumers for more agile and customized services.”
What consumers need is not only convenience and customization in shopping experience but also the demands for refinement, customization, and technology presented by beauty products themselves, which cannot be ignored.
L’Oréal’s response to exploring future “better consumption” solutions is also quite agile. CHAILEEDO learned that at the sixth Import Expo this year, L’Oréal exhibited 18 beauty tech products, the highest number in history. These technological products include skin testing, AR virtual makeup, personalized customized devices, home beauty devices, and makeup accessories.
It is worth noting that many of these technological innovations are co-created by L’Oréal and startups, such as the first intelligent handheld eyebrow makeup tool, Shu Uemura 3D “shu” Exclusive Eyebrow Makeup, which can complete personalized eyebrow design in a few seconds. This product is co-created by L’Oréal and a South Korean startup.
There is also the Plump & Crystal Microcosmic Beauty Device, which made its global debut at the CIIE and is L’Oréal Group’s first beauty tech product incubated through the Big Bang Beauty Tech Challenge.
(Credit: L’Oreal)
When talking about future research and innovation plans and investment opportunities, Fabrice Megarbane said, “L’Oréal’s innovation must continue to focus on both our independent research and development and co-creation with the open ecosystem.”
Based on the “Beauty Golden Triangle” created by L’Oréal in China, Japan, and South Korea, L’Oréal gathered all the founders of startups from these three major markets in Shanghai for the first time this year. “Our idea is to let them innovate in China, for China, and also innovate in China for other parts of the world. I want to say that this may be both a way to maintain internal innovation and a path to open innovation,” said Fabrice.
Opening up a new map of scientific beauty
“Looking back at the past five years, the Chinese market has indeed been continuously evolving, and the advantage of L’Oréal China’s 26 years of development lies in our ability to adapt to the market’s constant changes.”
As Fabrice said, besides sounding the horn of transformation for beauty tech companies and bringing more technology-driven products to Chinese consumers, L’Oréal aims to enhance the brand’s value. Another typical example of L’Oréal’s strategy of “grasping small trends and making strategic moves” is the renaming of the “Active Cosmetics Division” to the “Dermatological Beauty Division” earlier this year.
Wellness is the core concept of post-pandemic consumption, and consumers are increasingly concerned about the scientific basis and healthiness of products. The renaming of the “Dermatological Beauty Division” emphasizes L’Oréal’s commitment to science and professionalism, indicating further strengthening of cross-industry collaborations with the medical and health fields, using scientific methods and approaches to reshape the ecosystem of skin health.
As a result, the four core brands under the Dermatological Beauty Division, namely Vichy, La Roche-Posay, SkinCeuticals, and CeraVe, have also undergone upgrades and opened up new areas of focus.
“The new name of L’Oréal Dermatological Beauty Division clearly conveys our core values and mission,” said Ma Lan, Vice President and General Manager of L’Oréal China’s Dermatological Beauty Division. “These brands complement each other in their positioning and strive to meet consumers’ diverse needs and desires in both skin health and professional beauty aspects.”
In fact, the trend of wellness has also extended from facial care to the scalp care market. According to the “2023 National Scalp Health White Paper”, nearly 90% of respondents are affected emotionally or psychologically by scalp/hair issues. As a result, consumers are researching ingredients, efficacy, and brands in the hope of better addressing scalp health problems.
CHAILEEDO noticed that L’Oréal Group, including brands like L’Oréal Paris, professional salon brand L’Oréal Professionnel, and Kérastase, has always been committed to empowering brands with technology. For example, L’Oréal Paris launched the “Hair Core Bandage” series, which uses “tri-acid” alpha hydroxy acid as the core ingredient to reshape the ion bonds and achieve core hair repair. Kérastase also showcased the Kérastase K-SCAN AI Smart Analyzer, which provides precise analysis of consumers’ hair density, diameter, dandruff, and scalp health, at the Import Expo.
In response to scalp issues faced by Chinese consumers, Vichy DERCOS has also started to make its mark. It is understood that Vichy DERCOS, which originated in 1964 and specializes in various scalp problems, officially entered the mainland China market in 2021. The brand will introduce its new scalp oil control essence, featuring the Freshness Extender and “oil-absorbing black technology,” to the Chinese market next year.
Fabrice summarized L’Oréal’s China strategy as follows: “We have always insisted on growing together with China, understanding China, and investing in the Chinese market. For the L’Oréal Group, the core of our successful strategy lies in our excellent research and development capabilities, strong brands, and continuous innovation, which allow us to continuously respond to and meet consumer needs, reach and inspire consumers’ hearts.
China is one of L’Oréal’s greatest success stories
According to the personnel appointments announced by L’Oréal Group in September of this year, after February next year, Fabrice will bid farewell to China and be promoted to the position of Chief Growth Officer globally.
CHAILEEDO has previously examined the performance of L’Oréal China over the past four years since Fabrice took office as CEO of L’Oréal China in 2019. Despite facing numerous challenges, including the pandemic, L’Oréal China achieved growth of over 20% during 2019-2021, with a growth rate of approximately 7.7% in the first three quarters of this year. It is quite remarkable that L’Oréal, with its large base and in an economic downturn, can maintain such growth.
The growth story of L’Oréal in China is indeed one of its best stories. For Fabrice, the five years leading the Chinese market could be considered one of the most exciting stories of his career. He also stated, “In my new career as Chief Growth Officer, China plays a central role in my strategy.”
Replacing Fabrice is Vincent Boinay, the Global Travel Retail General Manager of L’Oréal Group, who will become L’Oréal China’s fifth CEO. At the same time, Ma Xiaoyu, the General Manager of the Luxury Cosmetics Division of L’Oréal China, has been appointed as the Deputy CEO of L’Oréal China, marking the first time that L’Oréal has established the position of Deputy CEO in China.
(Left: Vincent Boinay; Right: Ma Xiaoyu)
Considering the backgrounds of Vincent Boinay and Ma Xiaoyu, CHAILEEDO noticed that both of them are long-time veterans of L’Oréal, with more than 26 years of experience, and both have served the Lancôme brand. The former previously held the position of Deputy General Manager of Lancôme, while the latter has been instrumental in leading and witnessing the growth of the Lancôme brand in China.
“I believe that the market is constantly evolving, and we have also seen the vitality of the high-end market,” said Stéphane Rinderknech. “Now we have a new high-end brand, Aēsop, which has just joined the L’Oréal brand portfolio.”
In his view, the future China may be much more complex than today’s China, so “we need a leader who knows where the market is and knows how to work with Vincent Boinay to build the next stage of growth in China.”
Through this personnel adjustment, Fabrice also revealed to CHAILEEDO another growth secret of L’Oréal – the management philosophy of appointing capable individuals. “For L’Oréal China, talent is a crucial asset and the main driver of our sustained success. To some extent, Ma Xiaoyu is a great symbol of that.”
It is reported that Vincent Boinay has over 30 years of experience in L’Oréal Group and is familiar with various brands under L’Oréal. “As the head of global travel retail, Vincent Boinay also has a deep understanding of China and the consumers who purchase products in Hainan and other places outside of China. I believe he is an excellent leader who will work together with the Chinese team to continue building a great growth story in China,” commented Stéphane Rinderknech.
There is no standard answer as to how this new leader will continue writing the growth story of L’Oréal China, but one thing is certain: beauty technology will undoubtedly be the most important catalyst in this story, without a doubt.
