L'Oreal's business in China may surpass the U.S. over the next 5 to 10 years, said Jean Paul Agon, Chairman and CEO of the L'Oreal Group.
 
The world's largest cosmetics company is targeting 1 billion new customers by 2020 and China is expected to contribute to one third of this ambitious target, with an addition of 300 million new consumers.

To date, L'Oreal has less than 60 million Chinese customers.

As in many large corporations, acquisition of local brands has played a big role in L'Oreal's strategy in China. Between 2003-2004, it's acquisition of two Chinese brands, Mininurse and Yue-Sai have helped the company move up significantly in this market.

Agon emphasized that organic growth was to be the key to L'Oreal's long-term success in China.
Chief executive of L'Oreal China, Alexis Perakis-Valat has prioritized three strategies for this emerging market. The first is breakthrough innovation The second is to leverage growth opportunities in China's second and third tier cities. Finally, new business development will also be important, the company wants to  grow its men's skin care and make-up market share.

With that said, Agon also mentioned that mature markets like the US and Germany possess much room for growth.

 "Nearly half of U.S. consumers are not using L'Oreal products. Although we rank first in Germany, there is at least two-thirds of German consumers that we can still tap into."

In the 2011 Q3 En-Spire study by R3, L'Oreal remains the most loved skin care brand among Chinese consumers, winning 11.3% of total votes. J&J's Dabao and P&G's OLAY rank second and third respectively, receiving 7.9% and 7.2% of total votes.

Research by Sandy Si, R3 Beijing; Find out more here
To learn more about En-Spire, click here

Alibaba Group has opened its group-buying platform, Ju.taobao.com (Juhuasuan), to other industry players such as Groupon's Chinese joint venture firm Gaopeng and the country's leading group-buying website Meituan.

Juhuasuan, which was launched in March 2011, is a platform on which users can browse through hundreds of group-buying deals.

"The open platform will not only allow large group shopping websites such as Gaopeng and Meituan to offer their deals to, and tap into the buying power of Juhuasuan's tens of millions of active users, but will also offer a platform for smaller deal providers to thrive and propel their reach into the consumer market," an Alibaba spokeswoman said in a statement on December 29

In September, Taobao Mall, a unit of Alibaba Group, also opened its platform to other e-commerce players, inviting them to set up storefronts on China's top business-to-consumer website.

China has almost 6,000 group-buying websites, most of which backed by venture capital firms. Faced with accusations of selling fake goods and competition from thousands of copycats, the group-buying sector has been sobering up, with dozens of websites reportedly shut and venture capital shunning the industry.

Alibaba's finance unit will provide RMB600m (US$94.9m) in loans to small and medium group-buying operators, while venture capital firms will put another RMB600m to invest in companies on the platform that show potential, the firm said in the statement.

Research by Roy Liu, R3 Beijing; Find out more here

It's predicted that China will pass the United States as the world's largest e-commerce market by 2015. This incredible growth will be the result of a nation that already has 485 million Internet users who spend a disproportionate amount of their income online compared with Western peers.

Currently there are 145 million on-line shoppers in China compared that to 70 million in the U.S.

In a new report, the Boston Consulting Group (BCG) calculated that every year for the foreseeable future another 30 million Chinese will go online to shop for the first time. By 2015 they will each be spending US$1,000 a year—about what Americans spend online now.

The Source is the most detailed guide to agencies in China.

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