‘Significant growth potential’: Beiersdorf eyeing opportunities to win over the China skin care market
“We see significant growth potential in face care in the Asian market, especially in China, the world's largest face care market. In recent years, we have succeeded in establishing ourselves in the premium segment with La Prairie and Eucerin thanks overall to our skincare expertise,” said Vincent Warnery, CEO of Beiersdorf AG.
Warnery revealed during the firm’s FY2021 earnings conference on March 1 that the company is in the process of registering its patented active ingredient, W630, in China.
This ingredient is featured in Nivea Luminous630, its bestselling range of anti-hyperpigmentation products.
“We hope this will make us the first company after the introduction of China's new cosmetic regulation last year to receive approval for the use of such an effective ingredient in a domestic market. We are convinced that this will open up significant growth potential for us,” said Warnery.
Currently, products from Nivea and Eucerin that contain W630 are available in China through cross-border e-commerce.
“We are receiving such positive feedback from consumers that we will expand the range of products in the Nivea Luminous630 series in 2022. The cross-border e-commerce channel currently covers only 10% of the total online market potential of this range. Once we receive the registration, we can expect the dynamic growth trajectory,” said Warnery.
In addition to launching its bestselling products into the Chinese market, the company is also focused on developing new products that meet the needs of local consumers.
In 2020, Beiersdorf began a partnership with Alibaba’s Tmall Innovation Center (TMIC). Since then, it has launched exclusive products, including new Nivea Men products.
Following this, more than 10 additional products will be developed in 2022 in conjunction with TMIC, said Warnery.
“In the years ahead, we want to accelerate our pace of innovation in closer cooperation with our external partners such as Tmall and thereby make Eucerin and Nivea as successful as La Prairie in China.”
La Prairie, Beiersdorf's high-end skin care brand, has managed to outpace the market in terms of growth despite the implications of COVID-19.
According to the firm, sales in China this year grew by 30% compared to 2020 and 70% compared to 2019.
La Prairie also performed strongly in China’s travel retail sector, with sales doubling compared to 2020 and grew by 73% compared to 2019.
This growth was largely driven by Hainan where the brand selectivity expanded its presence and it plans to continue this steady expansion in 2022.
Beiersdorf’s consumer business segment grew organically by 8.8% to €6.1bn (U$9.2bn) and recorded 5.4% growth in operating profit to €740m (U$826). The firm’s sales in Africa, Asia, and Australia increased by a total of 8.9% to €1.9bn (U$2.1bn).
The firm said it was expecting the improvement in the global skin care market to continue in 2022 and believes it will outperform the market.