French Cosmetics Giant L’Oréal Opens First Smart Operation Center in China

French cosmetics giant L’Oréal has kicked off operations at its first intelligent operation center worldwide in Suzhou to meet the rising demand from China’s e-commerce market.

L’Oréal opened the center on April 26. With a total area of 46,000 square meters, it has top automation technologies and advanced digitalization systems, uses automatic sorting facilities and mobile robots, and can handle 50 million direct-to-consumer orders and 17 million business-to-business orders a year.

With a total investment of CNY600 million (USD82.8 million), the center will become an important service hub of L’Oréal in China to deal with D2C and B2B orders and support the firm’s 10 brands, including L’Oréal Paris, CeraVe, and Kerastase.

The center’s service network covers commercial clients, such as e-commerce platforms, brick-and-mortar retailers, and hair salons, its head told Yicai. The center integrates cutting-edge digitalization and logistics technologies, making L’Oréal’s supply chain more flexible and capable, the head added, noting that its operation efficiency is 30 percent to 40 percent higher than traditional centers.

“China is L’Oréal’s second-largest market, and L’Oréal is the largest cosmetics group in China,” said Vincent Boinay, president of the company’s North Asia Zone and chief executive of L’Oreal China. “The center in Suzhou has not only expanded L’Oréal’s business in China but also demonstrated its commitment to continue to invest in the country in the future.

“We will continue to invest in China to meet the rising demand of Chinese consumers and enhance our operational capabilities in the country,” Boinay noted.

China’s e-commerce business environment is the most active and fastest-growing globally. Sixty-two percent of L’Oréal’s China revenue comes from e-commerce platforms, most of which is from D2C orders, according to data from the Clichy-based company.

L’Oréal’s sales in China rose 5.4 percent last year from the previous one, with retail sales up 7.7 percent, according to the firm’s latest earnings report. L’Oréal’s high-end cosmetics business grew at three times the average pace in the Chinese market, while its dermatology and beauty businesses grew six times faster than the average in the period.

L’Oréal’s sales rose 6.2 percent in the first quarter of this year from a year earlier.

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