L’Oreal builds its first global intelligent operation center in China

The booming Chinese market still has great appeal to large multinational corporations, and many foreign investors are still heavily investing in the Chinese market.

Recently, the world’s largest beauty group, L’Oreal Group, officially launched its first intelligent operation center. It is reported that the intelligent operation center is located in Suzhou Industrial Park, Suzhou City, Jiangsu Province, covering an area of 46000 square meters. The center is equipped with automation and information technology systems, improving order fulfillment efficiency – it can process over 7000 D2C orders per hour.

The reporter learned from the relevant person in charge of the operation center that the total investment of the intelligent operation center has reached 600 million yuan. In the future, it will become an important service hub for L’Oreal to handle D2C (direct to consumers) and B2B (enterprise to enterprise) orders in China, covering various commercial customers such as e-commerce platforms, offline retail, and hair salons, providing support for 10 brands under the group, including L’Oreal Paris, Sile Skin, and Kashi.

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China has the most active e-commerce environment in the world and a continuously expanding online shopping market. According to data provided by L’Oreal, in 2023, up to 62% of L’Oreal China’s business came from thriving e-commerce platforms, with the majority being D2C orders.

The aforementioned person in charge stated that the e-commerce sector in China is increasingly growing, and by integrating cutting-edge digital and logistics technologies, the center has enhanced the flexibility and capabilities of L’Oreal’s supply chain. Compared to traditional factories, this operation center can improve operational efficiency by 30% -40%.

“The opening of the Suzhou Intelligent Operations Center not only further expands L’Oreal’s territory in China, but also demonstrates our continuous investment and commitment to the future development of the Chinese market. We will continue to invest in China as always.” said Bo Wanshang, President of L’Oreal Group’s North Asia region and Chief Executive Officer of China. “Now, facing the unique market speed and scale in China, we will focus on leveraging our own strategic advantages and precise layout. The center will meet the growing needs of Chinese consumers and strengthen our operational capabilities in China.”

L’Oreal recently released last year’s full year financial report and this year’s first quarter financial report. Data shows that in 2023, L’Oreal achieved a 5.4% increase in net sales and a 7.7% increase in retail sales in the Chinese market. The growth rate of the high-end cosmetics department is as high as three times the market average level; The growth rate of dermatology beauty departments is six times higher than the market average. In the first quarter of this year, L’Oreal China’s performance increased by 6.2%, thanks to its comprehensive layout (categories, channels, pricing) and innovation.

Bo Wanshang previously stated at the 2023/2024 development strategy communication meeting that investing in China is investing in the future. As for the investment standard of L’Oreal, Beauchamp said, “First of all, what we invest must be what we don’t have, and must form a complementary relationship with our current product portfolio.” Under this principle, L’Oreal will continue to invest in China-Chic and Chinese beauty brands, because there are almost no Chinese brands in L’Oreal’s brand portfolio except Yuxi. In February this year, L’Oreal Group announced a minority equity investment in the local high-end perfume fragrance brand Guanxia TO SUMMER.

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