Premium Beauty News - How would you analyse these successive decisions, beyond economic reasons?
Florence Bernardin - The problem for Revlon is mainly related to distribution and communication, which were not sufficiently focused on China. Their local sales only represented 2 % of the turnover. As for Garnier, at first I was surprised. This brand really had a history with this country, and actual legitimacy: a lot had been done for their international image as well as for the access to Western products.
At the same time, I can understand the underlying economic, profit-related reasons. It is actually quite brave, and it shows the world anything is not possible in China today. It is not paradise. A lot remains to be done, but it is also necessary to appropriately position oneself, choose a distribution network and a competitive segment. So this withdrawal should be considered as a lesson of wisdom, economics and management, not as a cold shower.
Premium Beauty News - Has the Chinese mass market become impossible to access for Western brands?
Florence Bernardin - The mass market is hardly penetrable with export today. It has become increasingly complex to be competitive with first-price products on the mass market because of the local market. It is just not profitable. And it is hard to get sales to take off within such a competitive context, economically speaking.
French brands in particular should keep focusing on masstige and selective markets. That is what they are good at. The luxury market is not really challenged by local brands because it is still associated with each brand’s culture and history.
Premium Beauty News - How can the future be seen on this market then?
Florence Bernardin - China is going to become a tricky market, just like other international ones can be.
The future will increasingly be made of joint-ventures and partnerships between local manufacturers and international brands to favour know-how collaboration. This is one of the solutions to be considered a priority, since attention should be paid to achieving effective communication with Chinese teams.
It must be noted that there are lessons to be learnt in intercultural management, and in knowing how to work with the Chinese, and listen to all their wishes. Many international brands, including Garnier, according to Chinese social networks, seem to have come up against management difficulties in China. This results in a lack of understanding, and then it gets all negative. Many companies still have not established adequate intercultural understanding, nor have they left enough responsibility to their local management. It is hard to preserve the strategic image of a Western brand, but concessions will have to be made. Success depends on actual collaboration with stakeholders who are familiar with the local market.
Premium Beauty News - Which segments do you consider as growth drivers?
Florence Bernardin - Midrange and premium products, but with brands that really make a difference, just like for other international markets.
I also think natural and organic products will play a part. The health theme will be crucial because consumers are really looking for protection, cleanliness and safety, as they are exposed to sanitary scandals and pollution. The brands that will decide to focus on safety and transparency do have a key role, especially if they are Western brands, because they are seen as a guarantee of quality.
Premium Beauty News - Do you think the fact that the one-child policy was abolished can have an influence on the birth rate, and therefore on the child product segment?
Florence Bernardin - First of all, the law has not been voted yet, and nobody knows when it will be. Then I am not sure there will actually be a babyboom if it is, because real estate and education costs increase at the same time, and they are already part of the most expensive in the world. Having a second child will be very costly! So people will think twice. However, the baby market will change, and cosmetics for children will develop. Indeed it should not be forgotten that children are at the centre of the family there. In addition, demand for safe products will be high for this target.