Will L’Occitane’s China Strategy Pay Off? (Video)

French Company’s IPO In Hong Kong Raised Over $700 Million, Aimed At Mainland China Expansion

L'Occitane currently has 46 stores in mainland China

L'Occitane currently has 46 stores in mainland China

Last week, L’Occitane became the first-ever French company to list on the Hong Kong stock exchange, announcing that the $707 million raised in its IPO will be aimed at funding expansion in the growing mainland China market. Since then, the company has said that it intends to double the number of retail outlets it operates in China (it currently has 46), and today L’Occitane made a disappointing debut in Hong Kong, falling 4.5% mainly on investor concerns about European debt.

Despite an overall rough first week in Hong Kong, L’Occitane has high hopes for its future in the China market, basing optimism mostly on projections that female consumers in China will fuel sustainable long-term growth in the skincare and cosmetic markets. Unlike most segments of the China luxury market — from automobiles to fashion — that are dominated by male consumers, women call the shots in the skincare and cosmetic markets.

This week, Shaun Rein, managing director of China Market Research Group (and Jing Daily “10 for ’10” participant) spoke to CNBC’s Oriel Morrison about L’Occitane’s long-term prospects in mainland China and his thoughts about Chinese female consumer trends in 2010: