Recently, there is news that L’Oréal Group’s brand Saint-Gervais Mont-Blanc will withdraw from the Chinese market. The person in charge of the L’Oréal Group said Saint-Gervais Mont-Blanc is currently operating normally.
Recently, there is news that L’Oréal Group’s brand Saint-Gervais Mont-Blanc will withdraw from the Chinese market. What is surprising that the brands withdraw from the Chinese market after only 2-year launch of China.
On the 14th, the person in charge of L’Oréal Group said that the brand Saint-Gervais Mont-Blanc is currently in normal operation, but now the official website is close.
In France, the “Thermal Spring Water” of Saint-Gervais Mont-Blanc is particularly famous due to it can relieve burns, scars, eczema and other skin diseases. The brand itself has a history of about 200 years and is dedicated to the repair of sensitive skin with its 100% of the French spring water from Mont Blanc.
In 2016, the brand was acquired by L’Oreal Group, and entered the Chinese market for the first time through e-commerce channels in August 2019 turning into one of the top four “pharmaceutical” brands of L’Oreal Group, along with VICHY, LA ROCHE-POSAY and SkinCeuticals.
When it first entered the Chinese market, the brand focused on the “Professional Repair and Care Series” including three star products: Saint-Gervais Mont-Blanc Soin Anti-Rougeurs, Saint-Gervais Mont-Blanc CICA, and Saint-Gervais Mont-Blanc Eau Thermale Du Mont Blanc.
The L’Oréal Group has high expectations for the brand’s performance in the Chinese market due to the huge potential of the Chinese cosmetics market, and Saint-Gervais Mont-Blanc has become the first brand to choose the Chinese market when the Group was extending its overseas market.
However, from the performance of Saint-Gervais Mont-Blanc in the Chinese market in recent years, its development does not seem to be as expected by the group.
Saint-Gervais Mont-Blanc has been operating in the Chinese market for more than two years. But in its annual report, the mass cosmetics division where it is located did not mention the brand’s market performance. On the other hand, L’Oréal’s Active Health Cosmetics division, which owns brands such as LA ROCHE-POSAY and SkinCeuticals, was named for its strong growth rate achieving a high growth rate of 30.3% in fiscal 2021. The two brands doubled in four years and achieved revenues of 3.924 billion euros (about $4.282 billion).
As for the e-commerce channel, which is the main channel for Saint-Gervais Mont-Blanc to enter the Chinese market, the flagship store of Saint-Gervais Mont-Blanc in Jingdong, a Chinese e-commerce platform, only has 4 SKUs left, including spray, essence water, cleanser and mask. While its official flagship store of Tmall, another mainstream Chinese e-commerce platform, has a discount of 3.8% under the discount of a single product.
On the other hand, its official accounts on several Chinese social platforms, including Weibo, Xiao Hong Shu and WeChat, have stopped updating. Before that, it was updated every other day or every week.
The official Weibo account currently has only 3,800+ followers and was updated on November 11 last year. Its official WeChat Mall, which is operated by L’Oreal (China) Co., Ltd, shows that the system is being updated for maintenance and cannot be opened.
In fact, when Saint-Gervais Mont-Blanc entered the functional skincare sector in China in 2019, it coincided with China’s strict crackdown on “pharmaceutical” propaganda, which was also the year when Chinese sensitive skincare brands Winona and Dr. Yu blooming.
“The brand matrix of L’Oreal in the field of active and healthy skin care in the Chinese market is relatively mature from the perspective of efficacious and specialized skin care with the popular price of Cerave, the mid-range price of LA ROCHE-POSAY, and the high-end price of SkinCeuticals. These three brands have shown high growth in recent years. From the view of positioning, it seems that Saint-Gervais Mont-Blanc cannot help L’Oreal open up a blank market in China. ” A Chinese cosmetics industry sources said.
What Saint-Gervais Mont-Blanc is facing is China’s increasingly strict regulatory regulations, slow growth performance and the high growth of competing products. If the above problems are not solved, it is feared that the withdrawal of Saint-Gervais Mont-Blanc from the Chinese market will become a fact.