L'Oréal's growth strategy is built on two pillars: capturing new growth drivers in its traditional market (new geographies, consumer groups, sub-segments), and exploring adjacent territories that are reshaping the beauty industry (beauty supplements, smart devices, aesthetics). This strategy is based on a multi-division category approach.
Expansion opportunities in emerging markets
Our ambition to win over new consumers in emerging regions is framed by a significant demographic shift. L'Oréal believes that a significant proportion of potential consumers for its products now live in these regions. The consumers in question are increasingly affluent. They are young, connected and passionate about beauty - all factors that will underpin strong growth in the beauty market going forward.
L'Oréal's future is also taking shape in its established markets.
The Group aims to exploit growth opportunities in mature markets, home to most of the world’s high-income consumers.
L'Oréal believes that China harbours great potential for the future. The country’s sheer size opens up a host of opportunities for customer acquisition. The ambition is to make further inroads into medium-sized towns, where the Group has traditionally had a smaller market share than in the biggest cities.
Europe remains the Group's stronghold and nerve centre, and it is where L'Oréal's positions are well-established and the Group's organisational structure simplified. The vitality of the European beauty market over the long term will be driven by two mutually reinforcing core trends: an ageing population and the medicalisation of the skincare market.
The United States is the only mature market showing dynamic demographic trends, with a multi-ethnic population that has tripled over the past decade. L'Oréal is ideally placed to meet the wide range of new beauty needs.
Generation Z today represents a tremendous opportunity for L'Oréal, given Zoomers’ appetite for beauty, combined with their growing influence on social networks and huge presence in emerging markets.
To harness this momentum, targeted strategies are being deployed in all Divisions, and products and services are being adapted to win over this beauty-hungry generation.
At the other end of the age spectrum, the over-60s are also a very attractive group for L'Oréal. As the population ages, they will represent a significant proportion of potential consumers by the end of the decade. These consumers, who are mainly in mature markets, have strong purchasing power, enabling them to satisfy their growing appetite for beauty products.
Men also represent a major opportunity for L'Oréal. Although men's products account for less than 10% of the global market, they account for 25% of the global consumption of beauty products, and L'Oréal remains under-represented in this territory. The Group's ambition is to further accelerate growth in men's fragrances and to ramp up innovation in skincare.
The multi-division category strategy aims to use the power of its brand portfolio to satisfy consumers' beauty expectations at several price levels and across all channels. By way of illustration, L'Oréal has been able to take advantage of the sophistication of hair care needs with differentiated innovations in professional products, mass market products and Dermatological Beauty. In fragrances, L'Oréal has built up a unique portfolio of brands covering all market aspirations and trends. In make-up, the Group's creativity and ability to innovate in line with cultural changes enable L'Oréal to respond to and instigate trends through marketing activation plans. In skincare, L'Oréal is aiming to capitalise on its strength in Research & Innovation to stimulate innovation and meet "ageing better" aspirations.
Several sub-segments of the traditional beauty market still harbour significant potential for L'Oréal, which has relatively low market share in some of these markets. In particular, the body-care segment is gaining in value and is increasingly attractive to L'Oréal, which is expanding its reach in the market thanks to product innovation.
