Cosmetics brand L’Oreal Group is laying the foundation for 2015 online sales figures that would make many retailers envious.
Director of investor relations Francoise Lauvin told analysts on the company’s Q2 2015 earnings call that L’Oreal expects to book one billion euros in e-commerce sales this year, or $1.095 billion at current exchange rates.
That figure, if L’Oreal achieves it, would put the retailer in elite company. Top500Guide.com data shows that in 2014, only 89 retailers eclipsed the $1 billion mark in online sales; 48 of those in the Top 500 Guide, 26 in the Europe 500, and 15 in the Asia 500. That would also be up 25% from fiscal 2014, when L’Oreal achieved 800 million euros ($909.3 million) in online sales.
It’s an ambitious goal, but CEO Jean-Paul Agon says he thinks his team has laid the necessary groundwork to achieve it.
“We have recruited many people, because it’s a complete(ly) new expertise and we want to have the best expertise in the industry,” he told analysts on the brand’s Q2 2015 earnings call, according to a transcript of the call obtained from Seeking Alpha. “We are recruiting a dream team of digital geeks and experts that can really help us to win the battle. And we are very excited, because we think that it’s going to be, as you say a great competitive advantage.”
Through the first six months of 2015, L’Oreal is more than halfway to that goal. E-commerce represented 4% of the company’s 12.8 billion euros in sales through June 30, which would put the e-commerce figure at 512.8 million euros, or $561.6 million. For the second straight quarter, executives pointed to China as a major growth driver when it comes to digital, with e-commerce representing 15% of overall sales in the country for the company’s Consumer Products Division. Agon foresees even faster growth in the near future.
“We don’t know how fast it will grow, but it could reach 20% to 25%. There is a definite chance of a consumption pattern for the Chinese consumer that’s quite impressive,” he told analysts. He says L’Oreal products are also selling very well in physical stores in China that stock the brand’s products, “which is very important because this could have been a threat, but it’s not.”
L’Oreal is No. 310 in the Internet Retailer 2015 Top 500 Guide.