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Avon to establish R&D center in China

By Katie Nichol , 18-Mar-2010
Last updated the 18-Mar-2010 at 17:41 GMT

Cosmetics company Avon is planning to open a new research & development (R&D) center in Shanghai, China later this year.

The new 40,000 sq ft facility will be located in Shanghai’s Jinqiao Hi-Tech Park and is designed to primarily serve the Chinese market, although it will also support other markets in the Asia-Pacific region, according to the company.

The center will focus on areas such as product development, consumer research, chemical engineering, and safety and quality testing.

Strengthen Chinese operations

“We believe that our expanded R&D presence in China will enable us to be closer to consumers and ensure that we leverage our scientific talent effectively to meet the needs of Chinese women,” said Avon CEO Andrea Jung.

The Shanghai center will also help to establish closer working relationships with the company’s existing Chinese operations, according to Avon’s chief scientific officer Janice Teal.

“This new facility will create a close integration and synergy with our regional brand marketing center in Shanghai, consumer research function in Asia and China, and our China marketing operations,” she said.

The R&D center is not Avon’s first in China. The company already has a facility located in Guangzhou that carries out both cosmetics and nutritional supplements research.

However, the cosmetics research activities undertaken in Guangzhou will now be moved to the new Shanghai facility.

The company hopes the capabilities of the new center will allow it to increase its foothold in the Chinese market, which according to Jung, remains a significant long-term growth opportunity.

Importance of Chinese market

With markets either stagnant or in decline in Europe and North America, eyes are on developing markets such as China, where growth in the personal care segment has continued at speed.

Retail cosmetic sales grew at 16.9 per cent in China during the course of 2009, to CNY74.0bn ($10.8bn), according to the China Bureau of Statistics.

The market for skin lightening products remains particularly strong in the Asia-Pacific region. On a global scale, the market is estimated to stand anywhere between $15 and $20bn, with Euromonitor predicting it to grow by over 10 percent annually.

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