(Yicai Global) March 27 -- French cosmetics giant L’Oreal Group is already planning to build its second smart operation center in eastern China even before finishing the first one to expand in the Asian market.
The seller of makeup and hair care products recently penned a memorandum of cooperation with the management committee of a development zone in Jiangsu province’s Nantong to break ground on a 45,000-square meter facility there in 2024, Yicai Global learned from the Paris-headquartered company that did not disclose the scale of investment. The hub should be ready by 2025.
Nicolas Hieronimus, who became L’Oreal's chief executive in 2021, presided over the ceremony during his first visit to the country since taking up the reins at the company that has its China HQ in Shanghai.
The Nantong center, which will be equipped with world-leading logistics and robotics technologies, will mainly focus on premium cosmetics while the first one in Suzhou, which should be finished in September, should help the company ship mainstream cosmetics and hair care products more efficiently. The 90,000-sqm Suzhou project began in 2019.
Both centers boast a scale that operation hubs in other markets cannot match, and this is determined by the size of the Chinese market, Pankaj Gupta, L’Oréal’s senior vice president for North Asia and China, told Yicai Global. The Nantong center is slated to handle about 50 million parcels per year, he added.
L’Oreal has raised its investment in China because it is very optimistic about the future of the market and believes that the direct-to-consumer model will pose a great business opportunity, according to Chief Operations Officer Antoine Vanlaeys. As long as the firm acts quickly, at a large scale and with precision, it will be able to seize business opportunities, he added.
China's supply chain is very efficient, and this also brings high efficiency and a great contribution to the global export market, Vanlaeys said, adding that the company ships products from its Chinese plants to Southeast Asia, Japan, South Korea, and other countries.
Most of L’Oreal’s investment projects in China so far are focused on the Yangtze River Delta region, which is an important window for China to open up to the world and to keep introducing high-end brands and products, per the COO.
Currently, L’Oreal has one research, development and innovation center in China as well as plants in Suzhou and Hubei province's Yichang with more than 14,000 employees in total.
Editors: Tang Shihua, Emmi Laine, Xiao Yi