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Cosmetics firm expands in China

By Si Tingting (China Daily)
Updated: 2009-09-07 08:06

US cosmetics magnate Elizabeth Arden Inc is expanding its makeup and skin care counters to China's second-tier cities, even as it penetrates deeper into existing markets in more affluent cities such as Beijing and Shanghai.

"We have gone to all the key cities in China and are already in some second-tier cities, where we think consumers have a need for prestige beauty products," said Sebastian Clifton-Welker, the Asia Pacific & Oceania marketing director for Elizabeth Arden International.

Even though they lack the disposable income of consumers in first-tier cities and have not been as exposed to Western lifestyles, Elizabeth Arden hopes its testing counters will allow new customers to try out the company's cosmetics products.

"We are enthusiastically expanding our testing counters so they can have access to Elizabeth Arden products for whenever they are ready to buy our products," said Smith Chih-Hsin Chen, president of Elizabeth Arden Greater China.

Elizabeth Arden already has established locations in 77 cities. The company has 150 beauty counters, which they plan to expand to 200 in 2010.

"In China, average spending on our products is 800 yuan for each transaction," Chen said.

The numbers and expansion plans are impressive given that Elizabeth Arden joined the Chinese market only in late 2005, much later than other international cosmetics brands such as Estee Lauder, Lancome, Chanel and Dior.

Growth market

Elizabeth Arden Inc opens a new counter in a premium department store in Beijing. The US-headquartered cosmetics giant is striving to enter China's second-tier cities and offer more Chinese consumer-tailored products. [File Photo]

Like many of its competitors, Elizabeth Arden is now focusing on China as a growth market, Clifton-Welker said.

The report "Cosmetics and Toiletries Market in China" from the market research firm RNCOS stated that China's skin care market is expected to grow 12.5 percent annually from 2008 through 2012.

Much of the focus for Elizabeth Arden will be on skin care versus makeup.

"Skin care products make up 80 percent of the beauty industry's product share and cosmetics only about 10 percent," Chen said.

Since Chen joined Elizabeth Arden in early 2006, he said he has sought to make the company a trusted brand.

Testing, or "first-touch", counters are an important way to allow consumers a chance to personally try the Elizabeth Arden brand, he said.

Related readings:  R&D cooks up 'feast of beauty'  L'Oreal grows with youngest markets  L'Oreal sales in China up 27.7% in 2008

"That is why I set up more counters in the past three years for people to get a first-hand touch," Chen said.

"It's also important to maintain brand value," he added. "If faulty products appeared on the market, there would be no brand value left."

Chen said he is not worried about competition from inexpensive domestic brands.

"Those who use those inexpensive local brands today might turn to Elizabeth Arden another day," Chen said.

Chen said Elizabeth Arden now only accounts for about 1 percent of the market for beauty products in China.

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