Sephora Plans China Management Reshuffle, According to Sources
Sephora, the LVMH Mo?t Hennessy Louis Vuitton-owned cosmetics retailer, is scouting for a new leader for China to spur growth and better serve well-heeled customers.
According to Bloomberg sources, the management reshuffle will happen as soon as this year.
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A spokesperson for Sephora declined to comment.
According to industry sources, Sephora sped past the 12 billion-euro sales mark in 2022 and is on pace to achieve its goal of 20 billion euros over the coming years.
Sephora is well-positioned to capture growth opportunities in the China market as shoppers begin to prioritize in-store shopping experiences post-COVID-19.
According to Euromonitor, in 2022, China’s beauty and personal care market fell 6.4 percent to reach 532 billion renminbi, or $73.7 billion, but after COVID-19, China’s beauty market quickly resumed growth. According to the National Bureau of Statistics, cosmetics retail sales totaled 207 billion renminbi, or $28.6 billion, recording a year-over-year growth of 8.6 percent.
Sephora’s Wechat Mini Program shows that the premium beauty retailer has 328 stores across 91 Chinese cities. More than 65 percent of Sephora shops are located in mid- to high-end shopping malls, according to data from Win Shang Data, a third-party retail data agency.
In recent years, Sephora has faced fierce competition from rising local players such as Harmay, Haydon, Wow Colour and The Colorist, which turbocharged growth in 2019, driven by a venture capital funding craze. But during the pandemic, these nascent players shuttered stores as quickly as they opened new ones, which allowed Sephora to maintain its retail dominance in the multibrand beauty retailer space. Data from a Frost & Sullivan report published in 2021 revealed that Sephora accounts for 2.5 percent of the beauty specialty retail market.
Last year, in response to shifting consumer tastes, Sephora launched the “China Accelebrate” program, which will help select C-beauty brands generate annual sales of $14 million. Maogeping, the Wendy Yu-backed brand Yumee and local premium skin care brand Inoherb Tang are some of the latest additions to the retailer’s top shelf.
Sephora also remains the go-to retail partner for global brands wanting to enter China. Grown Alchemist, an Australian skin care brand, recently signed an exclusive partnership with Sephora China to launch in the country. Last April, Courrèges‘ fragrance products launched exclusively at all Sephora retail channels.
In China, Sephora retains exclusive brick-and-mortar distribution rights for brands such as Tatcha, Glam Glow and Peter Tomas Roth.
In June, Sephora began upgrading its retail experience by launching its first Store of the Future in the China market. Located at East Nanjing Road, a tourist-driven retail district, Sephora’s outsized store features innovative digital touchpoints such as skin analysis, AI-generated makeup recommendation and tutorial, mobile check out, as well as in-depty beauty consultation. The store also introduced a dedicated event space, Beauty Live Studio, which will host exclusive masterclasses and events.
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