L'Oreal Gained Significant Profit of $36.8 billion Even Suffered from Failing Promotion in China
- Chaileedo Press
- Feb 11, 2022
- 2 min read
Yesterday, L'Oréal Group announced its 2021 results with its sales up 16.1% year-on-year to $36.841 billion and its net profit rose 29% to $5.250 billion.
Last year, L'Oreal had its biggest waterloo in China during the Double 11, the biggest shopping carnival in China --- its offer was screw up.
In the run-up to the 2021 Double 11, two of China's top live streamer, Li Jiaqi and Weiya, both sold "L'Oreal Paris Ampoule Mask" on their live streams for 429 yuan (about $67.40) for 50 pieces. These two live streamers and L'Oreal official claimed that it was the "biggest discount of the year" (only in China). But a few days later, L'Oreal official sent tens of thousands of "over 999 yuan off 200 yuan" coupons, the lowest price of this product can reach 257 yuan (about $40.40).
Consumers who bought the mask between the two live streamers felt cheated and more than 30,000 people complained to the relevant Chinese platforms about L'Oreal's false advertising with a collective rate of less than 10% due to the sheer volume of complaints. Both live streamers have also announced that they will suspend their cooperation with L'Oreal until the price difference issue is resolved. On November 18, L'Oreal offered a solution but many consumers did not accept it.
However, just in the early morning of February 10, L'Oréal Group announced its key financial data for 2021 and the fourth quarter.
The financial results show that L'Oréal sales as of December 31, 2021 were 32.28 billion euros ($36.744 billion), up 15.3% year-on-year, or 16.1% if based on a comparable structure and the same exchange rate. At the same time, operating profit reached a record 6.16 billion euros ($7.012 billion), or 19.1% of its revenue.
This means that not only did L'Oréal's results not decline, but they were even 11.3% higher than sales in 2019 before the pandemic, a record high in nearly 14 years. In particular, the Chinese market recorded double-digit growth and a year-on-year increase of more than 50% in the fourth quarter compared to 2019.
According to the report, L'Oréal Professional Hair Care, Mass Cosmetics, Premium Cosmetics and Active Health Cosmetics achieved sales revenues of $4.323 billion, $13.975 billion, $14.117 billion and $4.480 billion, respectively in 2021. Among them, the Fine Cosmetics Division grew 20.9% year-on-year, overtaking the Mass Cosmetics Division to become the largest division of the L'Oréal Group. Brands represented by Lancôme, HR and Kiehl’s continued to lead the market in their respective categories, strongly driving growth.
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