L'Oreal chairman details strategy for future growth in China

Jean-Paul Agon, chairman of the L'Oreal Group, detailed the company's deep-rooted strategy in China, emphasizing localized innovation, a commitment to sustainability, and the pivotal role of cultural exchange. He made the remarks during a visit to Shanghai for the 37th International Business Leaders' Advisory Council for the Mayor of Shanghai.

The L'Oreal Group made its foray into the Chinese market nearly three decades ago, making it one of the earliest international beauty companies to do so. Agon, who was instrumental in establishing L'Oreal's presence in China, reflected on the nation's evolution.

"The China we see today in Shanghai is completely different from 28 years ago," Agon said. "It has transformed, modernized, and evolved into a beautiful and trendy country."

This dynamic environment has compelled L'Oreal to move beyond simply importing global brands and into developing a "in China, for China, and for the world" operational model.

The company's extensive local research and innovation center in Pudong New Area, which is celebrating its 20th anniversary this year, is a testament to this commitment.

Chinese scientists develop new formulations and products tailored to local preferences, with many of these innovations — such as a fully recyclable plastic pump for shampoo bottles — now setting the standard for the group.

Chinese consumers have become among the "most expert and demanding" globally, according to Agon, making the market a primary source of inspiration. "Many of the innovations we do for the world start in China," he said.

As an IBLAC member, Agon demonstrated the importance of the platform by proposing a "dual engine" strategy of integrating innovation and consumption which aims to bolster Shanghai's status as a global economic hub.

"Innovation creates new products and experiences, then these products stimulate consumption, and then the consumption stimulates industry reform," Agon said.

Sustainability forms the second pillar of L'Oreal's China strategy, he added. China was the first country where the group achieved carbon-neutral operations for all of its sites, including factories, offices, and distribution centers.

This leadership is further demonstrated in specific, market-driven initiatives. According to Vincent Boinay, president of L'Oreal North Asia and China CEO, the North Asia region, led by China, is the group's top-performing market for refillable products, indicating strong consumer acceptance of circular economy principles.

Beyond commercial and environmental efforts, Agon, who also serves as co-chairman of the France-China Committee, underscored the importance of cultural diplomacy.

He believes that fostering mutual understanding is essential for strong economic partnerships. Under his leadership, L'Oreal has initiated several cultural programs, such as sponsoring major exhibitions related to French heritage and projects for the restoration of Notre Dame.

"Culture is a very important element in the friendship between two countries," Agon said.

Looking ahead, Agon expressed unwavering optimism, saying that the growth narrative is "only at the beginning". He identified immense potential in reaching millions of consumers in emerging cities, where there's growing interest for beauty products even in smaller regions.

"The next China is still China," the chairman said.

Gu Yingjie contributed to this story.