Exclusive: Coty China Changes Hands Again

Coty China confirmed Kevin Chen's departure to CHAILEEDO and stated, "We greatly appreciate the contributions Kevin Chen has made to the development of Coty China in such a short period."

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Recently, according to the National Enterprise Credit Information Publicity System, there have been changes in the corporate information of Coty (China) Investment Co., Ltd. (hereinafter referred to as "Coty China"). Kevin Chen is no longer the legal representative and has resigned from the position of Chairman and CEO. His position has been succeeded by Chen Liyi.

As a senior veteran who previously served for many years at L'Oréal China, Kevin Chen's appointment as the leader of Coty China was highly anticipated by the industry. However, this change means that his tenure as the CEO of Coty China was less than six months.

Regarding this matter, CHAILEEDO immediately sought confirmation from Coty China, and Coty China exclusively responded to us, stating, "Since July 20th, Ms. Chen Liyi, the Executive Vice President of Coty Asia Pacific, has temporarily assumed the role of responsible person for Coty China's business." Kevin Chen has already resigned.

After six months, another leadership change at Coty China

Reviewing Kevin Chen's brief tenure at Coty China, CHAILEEDO discovered that on March 17th of this year, at the launch event of Lancaster series, a high-end skincare brand under Coty Group, Kevin Chen made his first appearance as the General Manager of Coty Group China.

(Credit: Kevin Chen from Coty China)

Subsequently, in April of this year, Kevin Chen led Coty China's participation at the 3rd China International Consumer Products Expo(CICP) held in Hainan, signaling Coty Group's strong focus on the Chinese market. At the expo, Coty showcased its latest products and research technologies in skincare, perfume, and makeup, among other fields, featuring its nine flagship brands.

Following this expo, Kevin Chen officially assumed the role of legal representative for Coty China, succeeding Guilhem Julien Souche. On May 10th, concerning the leadership change at Coty China, an insider from Coty China confirmed the news to the media, stating, "The group will continue with its existing China strategy, and the localized team will bring more local insights."

At that time, due to Kevin Chen's years of experience as an executive at L'Oréal China, and his extensive expertise in skincare business management, this appointment was viewed by the industry as an important move by Coty Group in the Chinese market and high-end skincare sector.

However, CHAILEEDO found that Kevin Chen made few public appearances as the CEO of Coty China after May of this year until recently when he stepped down.

CHAILEEDO noticed that besides resigning from the management of Coty China, Kevin Chen's associated companies such as Coty Trading (Shanghai) Co., Ltd. and Coty International Trading (Shanghai) Co., Ltd., for which he previously served as the legal representative and responsible person, have also undergone recent changes, with Chen Liyi taking over as the legal representative for all of them.

Coty China confirmed Kevin Chen's departure to CHAILEEDO and stated, "We greatly appreciate the contributions Kevin Chen has made to the development of Coty China in such a short period."

Based on the initial public appearance, Kevin Chen's tenure as the CEO of Coty China was less than six months, and if we calculate based on his time as the legal representative of Coty (China) Investment Co., Ltd., it was only 95 days.

CHAILEEDO further analyzed that the duration of previous legal representatives at Coty China has mostly been over six months. According to public reports, Kevin Chen's predecessor, Guilhem Julien Souche, served as the CEO of Coty China for a remarkable two years. Therefore, Kevin Chen's short departure from the company does not align with Coty China's past practices.

Regarding this matter, CHAILEEDO made further inquiries to Coty China about the reasons behind Kevin Chen's "swift" departure. In response to the question of whether Kevin Chen voluntarily resigned or for other reasons, Coty China only replied, "Former General Manager of China, Kevin Chen, resigned after mutual consultation."

The successor comes from Unilever and has previously focused on skincare

Before taking on the role of General Manager of Coty China, Kevin Chen had served for many years at the beauty giant L'Oréal and was also a key decision-maker in L'Oréal China's skincare business.

Public information shows that Kevin Chen joined L'Oréal China in 2012 as the Retail General Manager for L'Oréal's Luxe division. He was responsible for retail management, customer relations, and the formulation and implementation of operational strategies for all high-end brands under L'Oréal at that time.

With his keen market sense and accurate channel predictions, Kevin Chen quickly developed emerging retail businesses. In just two years, he achieved rapid growth in the business. Subsequently, he expanded L'Oréal China's channels in e-commerce, Sephora, and travel retail, laying a solid foundation for the explosive growth of L'Oréal China's high-end brands in later years.

In 2016, Kevin Chen was officially promoted to Vice President of L'Oréal China and General Manager of the Active Cosmetics Division. He played a role in driving the channel development of La Roche-Posay in the Chinese market and introducing the new brand CeraVe.

Later, Coty Group appointed Kevin Chen as the General Manager of Coty China, clearly recognizing his achievements during his tenure at L'Oréal China. These achievements include his experience in managing high-end skincare business and his familiarity and insights into Chinese consumers and channel layout.

Coty Group CEO Sue Y. Nabi previously emphasized, "Focusing on skincare is the key to Coty's deep cultivation of the Chinese market and driving rapid growth of the group's business in China and globally." High-end skincare is indeed a key focus for Coty Group's efforts in the Chinese market, which aligns well with Kevin Chen's past experience.

It is worth mentioning that according to publicly available information, Chen Liyi, the Acting General Manager and Executive Vice President of Coty Asia Pacific, previously worked at Unilever and served as President of the North Asia region for Unilever's skincare category. Like Kevin Chen, she also has experience in managing skincare products in the beauty industry.

Coty China also confirmed to CHAILEEDO that Chen Liyi had previously worked in the skincare department at Unilever.

(Credit: Chen Liyi, from Coty China)

"Recruiting and Strengthening Local R&D" - Focusing on the Chinese Market

CHAILEEDO noticed that in May of this year, Coty Group released its financial report for the third quarter of the 2023 fiscal year. The report showed that the net revenue from the core business in the third quarter of 2023 was $1.289 billion, a year-on-year increase of 9%. For the first three quarters of the 2023 fiscal year, Coty Group's net revenue was $4.203 billion, a year-on-year increase of 2%.

The report also revealed that sales in the Asia-Pacific region remained stable in the third quarter, and the trend in the Chinese market was gradually improving.

It is worth mentioning that in July of this year, Coty Group raised its performance expectations for the fourth quarter and the 2023 fiscal year. It is expected that sales for the three months ending June 30 will increase by 12% to 15% compared to the same period last year, and the sales for the entire fiscal year will increase by 10% to 11% year-on-year. It is understood that this is the third time Coty has raised its performance expectations this year.

In addition, CHAILEEDO also noticed that in the past two years, Coty Group has significantly accelerated its layout in the Chinese market, especially in the high-end skincare sector.

In March of this year, Coty Group focused on launching a new product line for the high-end skincare brand Lancaster in the Chinese market and announced actress Guan Xiaotong as its spokesperson. As of now, Lancaster's offline boutique stores have opened in Hangzhou and Nanjing. At the same time, the official flagship stores on Tmall and Douyin (Chinese version of TikTok) have started operations. Previously, Orveda, Coty Group's ultra-high-end skincare brand, which debuted at the China International Import Expo, will officially enter the Chinese market in the second half of this year. The brand's accounts on social media platform Weibo and Xiaohongshu are already active.

It is reported that in addition to introducing high-end skincare brands, Coty Group will also focus on strengthening its local research and development efforts by expanding its local R&D team. In April of this year, Caroline Andreotti, Chief Business Officer of Coty Group's luxury beauty division, publicly stated, "Coty Group has an R&D center in Shanghai, and in the future, we will continue to enhance the strength of the R&D center and the skincare team."

CHAILEEDO noticed that Coty Group is actively recruiting for senior scientist positions based in Shanghai for local skincare research and development. The job description on Coty's official website specifically mentions, "By establishing close connections with the global skincare research and innovation team, contribute to the development and growth of the discovery and innovation platform for the skincare category in China."

(Credit: from Coty Group)

In April of this year, Caroline Andreotti stated to the media, "In the future, Coty will comprehensively tap into the Chinese skincare market, and it is expected to double the sales of the group's skincare business by the 2025 fiscal year."

Clearly, Coty Group's efforts in the Chinese market will continue, and how Coty China will break through in the high-end skincare sector remains the biggest suspense.