L'Oréal CEO: ‘E-commerce for us is on fire’

Addressing analysts in the company’s 2019 half-year results​ a few weeks ago, Jean-Paul Agon highlighted the global importance of e-commerce for the beauty major.

“E-commerce for us is on fire. Sales in the first semester accelerated to plus 49%, twice the speed of the market, and now represents 13.2% of our total turnover,”​ Agon said.

Importantly, he said growth in e-commerce was “completely homogenous”​ across all divisions, representing about 50% for luxury and active cosmetics; 45% for mass; and 40% for professional.

Geographically, while China was a significant market for e-commerce, he said all regions were strong.

“It’s not only a Chinese game, it’s really everywhere where we are seeing this acceleration of the e-commerce business.”​

‘Probably the first to enter in this game and master it’​

Agon said e-commerce was very clearly a “key booster”​ to growth for L'Oréal.

“…We have been probably the first to enter in this game and to master it, in terms of digital and e-commerce activity,”​ he said in response to an analyst’s question.

And these investments, he said, were “really paying back”​ with growth at double the typical market growth.

“It really means that we are going twice the speed of the market and accelerating, even from one year to the other.”​

Artificial intelligence and augmented reality tech developments, he said, would only drive success in this field further.

A ‘digital-first’ beauty company​

“We are now clearly a digital-first company,” ​the chairman and CEO said. “…But, digital is not only about e-commerce. Digital enhances our return on investment on media, with sharper targeting – 47% of our media is now digital and three-quarters of that is spent on precision advertising.”​

However, digital was also about “more relevant content”,​ he said, and would help L'Oréal connect better with its 1.2 billion consumers each year through its website.

L'Oréal’s ModiFace, which enabled virtual makeup trials on Amazon​, for example, was now deployed by 20 brands in 65 countries, he said.