L’Oreal has managed to buy Chinese Skincare Company
L’Oreal, the French cosmetics leader, has made an offer of $843 billion to acquire the entire capital of Magic Holdings International was approved. It gets approval of China’s commerce ministry. L’Oreal plans to finish the acquisition in the second quarter of 2014.
Few days ago, L’Oreal declared that it would no longer sell the Garnier brand in China because of the decreasing of the sales. Industry analysts said that the downfall of Garnier would be due to a weak positioning.
New Acquisition !
This new acquisition allows L’Oreal to have an instant top selling facial mask brand in China. They are now present in 32 provinces and regions in China with 288 Magic’s distributors. L’Oreal will also have a greater distribution reach for its own brands in China.
According to Euromonitor, the sales of personal care and beauty product plan to grow by 8% to $34 billion in 2013. This sector has an important potential because it accounts for more than 25% of luxury sales.
Overview of the Chinese Market of Cosmetics
“China is still a 1.3 billion population market and personal care is growing,” Norman Chan of Calibre Asset Management Ltd told Bloomberg. “The faster growing markets are the low- to mid-end, which the domestic companies would have a better foothold in than L’Oreal,” said Chan.
One of the fastest growing areas in China’s beauty market is the facial mask. L’Oreal even says that this area has “very promising development prospects”.
According to AC Nielsen data, Magic has 26.4% share of the facial mast market in China in 2012.It sells the MG-branded beauty products like facial masks with snail essence.
Present in China since 1997, L’Oreal has 3 500 employees, a research center and two factories in Suzhou and Yichang.
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