L'Oreal Announces the Return of MG to Offline China

This return of MG to offline is an attempt to create a second growth curve for the brand.

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Recently, L'Oreal Group announced that MG's first national specialized beauty salon has landed in Jiaozhou, Qingdao, returning to the offline channel.

It is reported that, as the brand's "first store" to return offline, MG has cooperated with Zeyan, a well-known local cosmetic chain store, to return to the CS channel through professional beauty salon products + services.

Since its establishment in 2018, Zeyan Beauty Collection Store, with 18 stores and nearly 10,000 members, has been an emerging force in the booming beauty retail industry in Northeast China.

For many years, the cosmetic store channel has been a strategic core channel for L'Oreal Group. Affected by the pandemic and various factors, the growth of the beauty industry this year lagged behind the overall growth of total retail sales of consumer goods, while L'Oreal achieved double-digit growth in the cosmetic store channel.

Compared with many other channels, the offline channel has the advantage of not only offering a diverse product selection but also having better consumer reach ability and continuously improving the ability of service and experience., said Ke Maide, the L'Oréal China Vice President and General Manager of Consumer Products Division.

Lin Xiao, the General Manager of L'Oreal China's Consumer Products Division New Retail and MG brand, said that nowadays, consumers are more cautious in their purchasing behavior decisions, and they pursue higher quality, more cost-effective, and more personalized products and services. Based on industry trends and consumer changes, L'Oreal has tailored its strategy for the cosmetic store channel to diversify products, commercialize services, interactive with the whole area, and differentiate channels.

Public information shows that MG, founded in 2003, with an affordable + original "single-piece sales" model, has ranked top among China's domestic masks. In 2012, its sales exceeded 1 billion yuan ($141 million), occupying 26.4% of the Chinese mask market. In 2014, MG was acquired by L'Oreal. According to L'Oreal's financial report in the first half of 2016, MG's market share fell to 2.1%.

In 2018, L'Oreal made the first channel adjustment strategy for MG, which is a full-shelf removal from Watsons.

It is known that Watsons was once the main sales channel for MG. The data of 2013 showed that MG's retail sales in the Watsons channel amounted to 470 million yuan ($66 million), contributing to 70% of its total sales. L'Oreal responded at the time that MG's exit from Watsons was a strategic decision by the brand to make e-commerce as the brand's main channel.

After shifting from offline to online, that year, L'Oreal's financial report revealed that MG had gained double-digit growth.

Previously, Lin expressed that the online traffic bonus is disappearing. This time, MG returned offline in order to create a second growth curve for the brand, which is also in line with L'Oreal Group's strategic plan for MG.