China’s Beauty Bubble: YSL, L’Oreal Sales Shrug Off Trade War

In the beauty business, at least, there’s no Asia-Pacific slowdown due to the Trump-China trade war. That’s what L’Oreal CEO Jean-Paul Agon told CNBC in a recent interview.

If anything, Agon said he has seen Chinese consumers upgrading their spending habits in favor of higher-quality products, which benefits L’Oreal’s luxury brands such as Lancôme and Yves Saint Laurent Beauté. “There is also more and more income that has to be spent,” he noted in the interview.

L’Oreal CEO Jean-Paul Agon says the company’s beauty brands appear to be insulated from the U.S.-China trade war.  Photo: L’Oreal.

“Sales in China are flying, especially in luxury, and we have seen this now for a long time, and it’s going on,” Agon said. He added that the company is gaining market share in the country as well.

U.S. President Donald Trump is set to meet with Chinese President Xi Jinping at the end of this month to discuss a trade deal, but the Trump administration is prepared to launch additional tariffs should the talks fall apart.

Even with the threat of more tariffs, Agon is optimistic. He said, “We are seeing here and there some increases, but with the level of growth margin that we have, it’s not going to impact very materially our business.”

L’Oreal reported Q3 2018 revenue of $7.34 billion (€6.47 billion) last week, an increase of 6.2 percent year-on-year, beating analysts’ forecasts. Agon attributed the positive quarterly results to “very strong growth in Asia.”  The company said that its brands L’Oreal Paris and Lancôme enjoy paticularly strong demand in Asia. In addition, sales of its Yves Saint Laurent make-up boosted overall revenue.


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