Once Been Involved in False Advertising, La Mer Occupied Large Scale in Chinese Market
- Chaileedo Press
- Oct 9, 2021
- 4 min read
Estee Lauder Group President and CEO Fabrizio Freda revealed at the earnings conference that net sales in mainland China surpassed $1 billion in fiscal 2018 with growth driven by "Generation Z (those born between 1995-2009) who favor premium cosmetics ". More than 40% of new users of ultra-premium brand like La Mer are in their 20s.
The birth of the La Mer began with an accident in the laboratory of Dr. Max Huber, who evoked a journey of discovery to repair his face. By day, he was a space physicist. As the night falls, he was a dreamer. With a desire to unlock the power of repair, he set his sights on beloved ocean. After 12 years and 6,000 experiments, the doctor had the epiphany that would benefit him for the rest of his life. He fermented and extracted from deep-sea mega-algae and other pure ingredients to create Miracle Broth™, the soul ingredient and the secret formula for repair of the La Mer, which ultimately transformed his skin.
In 1995, Estee Lauder Group acquired La Mer with the aim of making it the most sophisticated luxury brand in the group. In 2004, La Mer officially entered the Chinese market with the support of the Estee Lauder Group. And the La Mer cream, which was priced at $0.21 million a bottle at the time, was ordered out by Chinese consumers in just 2 days when it was first released in a limited edition of 60 bottles.
The enthusiasm of Chinese consumers for La Mer has made it more and more daring in the Chinese market. In 2015, La Mer opened a Tmall flagship store. Then a BOUCHERON cooperation limited edition cream was sold exclusively with the price of 14,510.86 U.S. dollars. It was surprised that this batch of overpriced cream not only did not become a "showpiece" but a hot products among Chinese consumers. In addition, its best-selling essence creams and serums were once sold out and also repeatedly made the best-seller list in the beauty and skincare category in the previous Tmall Double Eleven. (Tmall Double Eleven: generally refers to the Tmall Chinese Online Shopping Carnival; Tmall: one of the most popular comprehensive shopping websites in China.)
Apparently, the Chinese market has also brought considerable benefits to La Mer and the continued growth of La Mer has driven the Estée Lauder Group's performance. The financial report showed that in fiscal 2018, La Mer's net sales exceeded $1 billion for the first time, which made it the fourth largest brand in the Estée Lauder Group. Among them, the Chinese market contributed significantly.
La Mer has come on the wave of consumer upgrading in the Chinese cosmetics market. With the golden age of international high-end cosmetic brands in China and the fact that young people generally prefer to buy products from international high-end brands and are willing to discuss such expensive brands as La Mer on Chinese social media, La Mer certainly has a natural advantage.
Growing demand for high-end beauty from emerging Chinese consumers is a key reason for the continued growth of this market. Estee Lauder Group President and CEO Fabrizio Freda revealed at the earnings conference that net sales in mainland China surpassed $1 billion in fiscal 2018 with growth driven by "Generation Z (those born between 1995-2009) who favor premium cosmetics ". More than 40% of new users of ultra-premium brand like La Mer are in their 20s.
Estée Lauder Group also noted growth in the La Mer brand and strong growth in its online e-commerce business in China in its fiscal 2021 first quarter results. In addition, La Mer also achieved double-digit growth being benefit from the demand for premium cosmetics in the Asia Pacific region, mainly in China. Data shows that the new generation of Chinese consumers prefer higher-priced and high-end products with customized services and the presence of anti-aging needs. The fact that La Mer is a global high-end luxury skincare brand has, to some extent, driven sales growth of high-end skincare products under the Estée Lauder Group.
Over the years, LA MER has always occupied the leading position of international high-luxury beauty brands in Tmall. In 2020, sales of LA MER exceeded 108 million USD during the Double 11 — Chinese Online Shopping Carnival. In 2020, the turnover of La Mer's "Tmall Super Brand Day" was the second highest single-day turnover in the whole year. In March and June in 2021, La Mer reigned as the NO.1 high-luxury beauty brand. In September 2021, the top skincare brand in the world La Mer once again chose to join hands with Tmall Super Brand Day to deepen the online digital marketing and recreate the legend of high-luxury brand turnover. (Tmall Super Brand Day: a campaign conducted by Tmall in conjunction with its merchants, in which the participating merchants set their own "brand day" for the year.)
It is worth noting that La Mer was involved in false advertising in 2018. According to media reports, Chinese make-up blogger "Dr. Da Zui" said he had filed a lawsuit against La Mer in September 2018 because it falsely advertised its non-existent scar-repairing effects to deceive Chinese consumers into buying it. The effects were only advertised in China, which was a serious violation of the relevant provisions of China's advertising law.
According to the blogger, there are serious gaps in the wording of the brand on the official websites of La Mer in China, Japan and the US. The Chinese official website creates an image of having a repair-as-usual effect, while the US and Japanese official websites indicate that it only has a soothing and moisturizing effect.
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