L'Oréal CEO: ‘E-commerce for us is on fire’

By Kacey Culliney contact

- Last updated on GMT

L'Oréal’s virtual makeup trial app launched earlier this year on Amazon
L'Oréal’s virtual makeup trial app launched earlier this year on Amazon

Related tags: L'oréal, Amazon, ModiFace, Artificial intelligence, Augmented reality, e-commerce, digital

E-commerce now represents 13.2% of L'Oréal’s total turnover and tech developments will only drive this further, says company chairman and CEO.

Addressing analysts in the company’s 2019 half-year results​ a few weeks ago, Jean-Paul Agon highlighted the global importance of e-commerce for the beauty major.

“E-commerce for us is on fire. Sales in the first semester accelerated to plus 49%, twice the speed of the market, and now represents 13.2% of our total turnover,”​ Agon said.

Importantly, he said growth in e-commerce was “completely homogenous”​ across all divisions, representing about 50% for luxury and active cosmetics; 45% for mass; and 40% for professional.

Geographically, while China was a significant market for e-commerce, he said all regions were strong.

“It’s not only a Chinese game, it’s really everywhere where we are seeing this acceleration of the e-commerce business.”

‘Probably the first to enter in this game and master it’

Agon said e-commerce was very clearly a “key booster”​ to growth for L'Oréal.

“…We have been probably the first to enter in this game and to master it, in terms of digital and e-commerce activity,”​ he said in response to an analyst’s question.

And these investments, he said, were “really paying back”​ with growth at double the typical market growth.

“It really means that we are going twice the speed of the market and accelerating, even from one year to the other.”

Artificial intelligence and augmented reality tech developments, he said, would only drive success in this field further.

A ‘digital-first’ beauty company

“We are now clearly a digital-first company,” ​the chairman and CEO said. “…But, digital is not only about e-commerce. Digital enhances our return on investment on media, with sharper targeting – 47% of our media is now digital and three-quarters of that is spent on precision advertising.”

However, digital was also about “more relevant content”,​ he said, and would help L'Oréal connect better with its 1.2 billion consumers each year through its website.

L'Oréal’s ModiFace, which enabled virtual makeup trials on Amazon​, for example, was now deployed by 20 brands in 65 countries, he said.

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