Instead, L’Oreal is pinning its hopes on the growing affluence of China’s middle class.
“The growth potential [is] I believe unlimited in China because of this rise of [the] middle class,” L’Oreal China CEO Stephane Rinderknech told CNBC on the sidelines of the Fortune Global Forum in Guangzhou, China.
“If we can really continue to be consumer-centric and to innovate in China for Chinese, as we do currently with our research and innovation center in Pudong, then the growth rate can be really phenomenal in China … I’m very confident for next year,” he added.
Much of that has to do with a middle class with increasing purchasing power that has what Rinderknech called a “craving for beauty.”
While experts see headwinds to growth as China attempts to contain financial risks in its economy, L’Oreal was confident trends in the beauty and wellness space meant that Chinese consumers were unlikely to cut back on their demand for skincare and cosmetics products.
“I think the economy slowing down is maybe in GDP growth but I think we’re really going towards quality … More quality [and] more sophistication of consumers. Consumers that want more and more beauty,” said Rinderknech.
Rinderknech also pointed to how the tech revolution was partially behind the growing demand for beauty and cosmetics products in China.
“China is much ahead in the digital revolution and the selfie is making you really be willing to improve your self-expression. This is why [there’s] a boom in make-up, a boom in hair color [products]. You want to have your individual personality, your individual appearance, your self-expression. And this is a huge trend we’re seeing in China, with a scale of hundreds of millions of people,” he said.