In 2010, the company’s USA operation registered a growth of 6 percent to $4.7 billion, after it suffered a dip of 2 percent post recession.
Despite recent worries about the current financial situation, CEO Jean-Paul Agon stated at a global media conference in New York that the US remains a key focus, as well as the emerging markets.
"The US is not only a market of today, it's a market of the future. We are very optimistic about the future of L'Oreal in this market. It will continue to remain the driving market for us in the future as well,'' he said.
Action plan for the emerging markets
The announcement came after Agon had been discussing the Paris-based company’s plans to increase its global sales contribution from developing and emerging markets to 50 percent in the next ten years.
L’Oreal currently draws almost 37 percent contribution from these markets, and Agon noted that as these markets grow rapidly for the company, they hold huge potential in the future too, hence the company’s plans.
"The percentage of business in new markets was about 10 percent 20 years ago. It was 20 percent 10 years ago. It is now 40 percent. I believe this could very soon be more than 50 percent in the next 10 years or even 60 percent depending on the currency.”
Growing in emerging markets costs less
''When you are only 40 percent of the market, you have room to grow faster,” said Agon, who also commented on L’Oreal’s continuing battle to catch up with Unilever in these markets: “our share is increasing every year.''
By increasing the exposure to emerging markets, Agon also explained that the cosmetics firm plans to keep its operating margins under check.
"There seems to be some kind of an opinion that doing business in new markets is somewhat less profitable than in existing markets. I would tell you that the cost of growing your market share in new markets is less than the cost of growing share in existing markets,'' he added.