China a standout for Estee Lauder
China is one of global luxury cosmetics business Estee Lauder’s strongest markets, with net sales up 14 per cent last quarter and most of the company’s brands showing double digit growth.
Besides the brand which bears its company name, Estee Lauder owns Clinique, MAC, Jo Malone and Bobbi Brown, (one of whose Hong Kong stores is pictured above).
Total China sales rose in “the high double digits” according to Estee Lauder’s quarterly results. While skin care products dominated Chinese sales, make-up products are growing in popularity.
Hong Kong sales, in contrast, were down due to the much documented changing demographics of mainland Chinese visiting the territory and last year’s Occupy Central protests.
Mainland China growth was especially strong for Clinique and through all channels including Sephora, department stores and monobrand shops. Online sales doubled.
“We believe that China could [account for] 20 per cent of our business in the long term,” CEO and President Fabrizio Freda said in an earnings conference call, a transcript of which is provided online by TheStreet.
“We are the beginning of the journey in China where we are very well advanced in the US.”
Online, Estee Lauder has six brand websites in China and four shopfronts on Tmall.
“Estee Lauder is the number one prestige beauty brand on Tmall and we are excited that La Mer became our fourth brand on the platform a few weeks ago,” added president of ELC online, Dennis McEniry.
“All four of our brands on Tmall are greatly exceeding our expectations, and we plan to launch additional brands there in the near future.
“We’re pleased with the growth in China. We’re going to more than double our business this year,” said McEniry.
Globally, and across all channels, Estee Lauder’s net sales rose eight per cent on a constant currency basis, exceeding the company’s expectations by more than one per cent.
Entering the final quarter of the current financial year, the company expects sales to increase by between six and seven per cent for the full year.