By admin 
For greater than a decade, China’s aspirational consumers, spurred by a fast-growing economic system and rising wages, snapped up merchandise from cosmetics giants like L’Oreal, Estee Lauder, and Shiseido. Earlier than the COVID pandemic hit, China appeared set to overtake the U.S. because the world’s largest make-up market.
These growth instances are over, as extra Chinese language shoppers now flip to up-and-coming native manufacturers, like Mao Geping and Florasis.
L’Oreal’s gross sales in Mainland China dropped final 12 months, shrinking its general North Asia gross sales by round 3%. The Chinese language market, the majority of the agency’s North Asia income, now accounts for 17% of group gross sales, down from 23% in 2022. The French agency continues to name China an necessary market, however has reportedly began reducing its retail workforce resulting from slower Chinese language demand.
As China stagnates, L’Oreal is now seeking to areas, just like the Center East and Southeast Asia, as a supply of development.
SAPMENA—L’Oreal’s time period for “South Asia Pacific, Center East, and North Africa”—will quickly “play a a lot larger position” in relation to magnificence, says Vismay Sharma, who oversees the area for the French cosmetics agency.
L’Oreal, No. 91 on Fortune’s Europe 500, reported gross sales of 1.1 billion euros ($1.19 billion) for the primary quarter of 2025, up 12.2% year-on-year, throughout SAPMENA and Sub-Saharan Africa (SSA).
That’s nonetheless small in comparison with different areas, sitting far behind Europe, North America and North Asia. However whereas SAPMENA-SSA solely contributed 9.2% of L’Oreal’s quarterly income, it was the one area to log double-digit development.
SAPMENA covers an enormous swathe of the globe, stretching from Morocco all the best way right down to New Zealand just below 19,000 kilometers away. The area’s 35 markets cowl 3 billion individuals, or about 40% of the world’s inhabitants, but solely accounts for 10% of world magnificence gross sales. “It has to return collectively, and finally demographics should win,” Sharma says.
SAPMENA’s fast development doesn’t shock Sharma. “The shoppers on this a part of the world are about 5 years youthful than the remainder of the world, dwell in aspirational societies and in economies which can be rising quick,” he says.
China has proved to be a tough marketplace for international cosmetics companies post-pandemic. Sluggish China gross sales have dragged down the monetary outcomes of U.S. agency Estee Lauder and Japan’s Shiseido.
A sluggish economic system and stagnant consumption are partly in charge. However there’s additionally new competitors. “C-Magnificence” manufacturers are beginning to decide up steam amongst Chinese language consumers, with new manufacturers going viral on Douyin, the Chinese language model of TikTok, and different social media platforms. (L’Oreal is paying consideration, investing in native Chinese language manufacturers like To Summer season)
Nonetheless, Sharma thinks China affords classes for SAPMENA.
Southeast Asia, like China, has extremely linked shoppers who’re used to e-commerce and livestreaming. For instance, Sharma notes that over 50% of L’Oreal’s enterprise in Vietnam comes from e-commerce.
That is much less true of the Center East and North Africa.
“If you take a look at the ecosystem of magnificence over there, you continue to don’t have TikTok Store. They’re nonetheless a couple of years behind platforms like Shopee, like Lazada,” he says.
But shoppers within the Center East share related preferences to these in Southeast Asia. “Expectations for magnificence are very related. We are able to see aspirations when it comes to form of hair, pores and skin, lips, and eyes,” Sharma says, pointing to a choice for longer black hair for instance.
That provides L’Oreal an opportunity to develop within the area. “Our capacity to create content material at scale within the GCC turns into an enormous benefit,” Sharma says.
This story was initially featured on Fortune.com