Today, CHAILEEDO learned that Chen Bing, the General Manager of Sephora Greater China, will resign. CHAILEEDO immediately reached out to Sephora China for confirmation, and they replied that Chen Bing will step down as the General Manager of Sephora Greater China on January 19 due to personal reasons. Sephora China also revealed further information that during the transition period, Alia Gogi, the President of Sephora Asia, will directly oversee the business in Greater China.
In fact, as early as July of last year, rumors circulated that the LVMH group was planning to search for new leadership for Sephora in China to lead the next phase of growth. At that time, some media cited informed sources stating that Sephora believed the Chinese market was crucial in achieving the global annual sales target of 20 billion euros within five years.
She led Sephora China to achieve peak performance
Public information shows that Chen Bing has previously worked for international companies such as Johnson & Johnson and Unilever, accumulating over 20 years of experience in the fast-moving consumer goods industry and possessing a deep understanding of it. She joined Sephora in November 2018 and the following year introduced the consumer-centric concept of “authentic retail,” improving services and driving Sephora China’s digital transformation.
During an interview with CHAILEEDO in 2022, Chen Bing mentioned that Sephora established a new “digital innovation” team at the beginning of the year to accelerate digital transformation. For Sephora China, digital transformation represents an entirely new business operation model.
In terms of channels, Sephora China currently operates over 340 offline stores and has established a comprehensive online presence through its official e-commerce website, WeChat mini-program, Tmall, Tmall Global, JD.com, and other platforms, successfully creating a seamless connection between online and offline in the “beauty community.”
Looking back at Chen Bing’s decisions, they were closely related to the flourishing period of e-commerce. Around 2018, many international beauty brands had already embraced the online market. Established brands such as Lancôme, L’Oréal, Estée Lauder, OLAY, and SK-II consistently dominated the list of beauty sale during Chinese Double 11 Shopping Festival, and offline channels were seen as reaching a turning point in their transformation.
For Sephora, which focuses on high-end beauty retail, embracing change, embracing digitalization, and targeting a younger and more diverse audience aligns with its long-standing attitude of daring to experiment.
The results have proven that under Chen Bing’s leadership, Sephora China indeed underwent a transformation and achieved remarkable performance. CHAILEEDO found that in 2019, Sephora China reached its peak net profit, surpassing 600 million.
The annual revenue exceeds 45 billion yuan ($6.26 billion) over 5 years
According to the “2023 China Cosmetics Yearbook” published by CHAILEEDO Data, the overall scale of the cosmetics industry in China in 2023 was 797.2 billion yuan ($110.84 billion), with a year-on-year growth of 5.2%. The market size of online channels surpassed offline channels for the first time.
Under the impact of the pandemic, online channels have further developed, inadvertently interrupting the high growth of many offline retail companies, including Sephora China.
It is understood that when Sephora entered the Chinese market in 2005, it formed a deep partnership with Shanghai Jahwa. Through the data disclosed in Shanghai Jahwa’s annual report, CHAILEEDO has made preliminary calculations of Sephora China’s performance.
CHAILEEDO found that, from 2018 to 2022, Sephora China’s total revenue exceeded 45 billion yuan ($6.26 billion). In terms of growth, both revenue and net profit maintained double-digit high growth from 2018 to 2019. The revenue scale reached a new high of over 10 billion yuan ($1.39 billion) in 2021, with a growth rate of 17.4% at that time. In 2022, the growth rate hit a five-year low, and there was negative net profit.
This contrasts with Sephora’s high growth in other global markets. According to LVMH’s financial report, the selective retail division, which includes Sephora, achieved significant growth of 26% in 2022. The high growth of 26% was also maintained in the first three quarters of 2023, with Sephora’s strong performance being emphasized.
In fact, over the past two years, there have been frequent personnel changes within Sephora globally. For example, in 2022, there were several leadership changes within Sephora globally, and last year, Sephora appointed a new President and CEO for the North American region. Overall, advancing the strategy of “digitalization + store expansion” and maintaining Sephora’s leadership in high-end beauty retail globally should be an important mission for leaders in all Sephora markets.
In the Chinese market, the newly opened “Asian Future Concept Store” by Sephora in 2023 is an example that reflects Sephora’s thinking and leadership in retail experience transformation. It is understood that the highlight of this store lies in not only the brand richness and exclusivity but also the incorporation of cutting-edge technology in the store, providing consumers with more personalized experiences.
As the temporary overseer during the leadership transition in the China region, Alia Gogi has described the role of the Chinese market in Sephora’s Asian development blueprint as “pioneering” and “benchmarking.” She stated, “China is the largest market in Asia, and we have always been looking forward to providing Chinese consumers with more unique products, trend insights, and enjoyable shopping experiences.”
Sephora China also emphasized to CHAILEEDO today that China remains an important strategic market for Sephora, and the company will continue to deepen its presence and increase investment, fulfilling its commitment to the Chinese market.
It is worth mentioning that Alia Gogi’s career at Sephora began in China. In 2011, she became the Senior Vice President of Merchandising for Sephora China, and in July 2020, she assumed the role of President of Sephora Asia. Although Alia Gogi is temporarily overseeing Sephora China, having a manager with rich practical experience in the Chinese market and beauty retail leading Sephora China reflects the importance of the Chinese market.
Assisting the high-end transformation of Chinese cosmetics
Indeed, offline retail of cosmetics in China is facing a decline and restructuring. However, there is no doubt that Sephora is still synonymous with high-end cosmetics retail and is also becoming an important force in the high-end transformation of Chinese cosmetics.
It is understood that from brands like Herborist, Inoherb Tang, Mao Geping Guang Yun, Marie Dalgar Color Studio, to the recently introduced Chinese brand MAISON de SIT.E, Sephora has been actively incubating domestic and emerging brands.
Furthermore, in early 2022, Sephora launched the “Shine with China-made Brands” program, which aims to support multiple high-end domestic brands within three years and help five brands grow into representatives of high-end cosmetics with sales exceeding 100 million yuan ($13.9 million). It is reported that Mao Ge Ping Guang Yun has already achieved sales exceeding 100 million yuan ($13.9 million), and Cha Ling’s sales have also surpassed 100 million yuan ($13.9 million).
In Sephora’s “2022 Sephora China High-End Cosmetics White Paper,” it was mentioned that the era of Chinese brands, known as “Guo Chao,” has entered the “3.0 era.” It has evolved from building brand strength and brand high-end positioning to “going global and internationalizing.” At the same time, judging from consumers’ perception of Chinese brands, they are increasingly recognizing that Chinese brands can represent China on the world stage and have the ability to align with the international arena.
For Chinese cosmetics, Sephora’s accurate grasp of new trends and opportunities in the Chinese market, as well as its willingness to collaborate with excellent domestic brands, is something that brands are happy to see. Feng Shuai, the founder of Inoherb, once expressed that Sephora has an international perspective and a powerful global network. He hopes to collaborate with Sephora to further enhance the excellence of Inoherb Tang and eventually be present in overseas Sephora stores, thus increasing the influence of national enterprises.
With the rise of Chinese domestic brands and the trend of brands considering a return to offline channels, the challenge and opportunity for Sephora China in the future lies in how it can continue to leverage its exclusive brand matrix, omnichannel network, and large user community to achieve breakthrough growth in performance.
