Beauty firm's CEO lauds Chinese market; wins over more clients

To Sue Nabi, CEO of Coty Inc, the company's presence at the sixth China International Import Expo is all about the future as China serves as an important growth engine.

Coty, a United States-based beauty company, was founded in France by Francois Coty in 1904.

In an exclusive interview with China Daily, Nabi said Coty's fragrance business is growing twice as fast as the industry average — growth which she believes is the result of participating in the CIIE.

However, there is room for more growth. Only 4 percent of Chinese consumers use fragrances daily, while 50 percent of people in Europe use them. Nabi thinks "Chinese consumers are among the most knowledgeable and most demanding in the world", and there are many opportunities that Coty can explore in China.

Nabi's attendance at the sixth CIIE marked her third visit to China within the year. During each visit, she discovered an "hourglass phenomenon" currently taking place in the Chinese consumer market — people either buy at entry level or search for more premium options.

This is evidenced in the company's performance — Coty's makeup brand Max Factor and Adidas body care products, both brands that offer affordable products, are seeing good results in China. On the other hand, Lancaster, which targets mid- to high-end consumers, and Orveda, a premium skincare brand, are also winning new Chinese consumers.

Market consultancy Bain & Co said prices of fast-moving consumer goods have been increasingly polarized in China since the beginning of this year. Brands attaching greater importance to people's rising demand for health and hygiene can sell at a premium while brands affected by less robust demand have to lower their prices.

When asked about changes in the Chinese business environment compared to the pre-COVID level, "competitiveness" is the answer that Nabi came up with immediately. The bar to succeed in China has been largely raised.

"Everything here is more competitive than ever and companies have to be very innovative. That's why I have visited China three times since March. But if you are successful in China, you can be successful anywhere else," she said.

The National Bureau of Statistics said retail sales of cosmetics surged 8.6 percent year-on-year, amounting to 207.1 billion yuan ($28.57 billion) in the first half, hitting a record high.

With strong confidence in the Chinese market, Coty has debuted two brands and a new product at the CIIE this year. Among them is the latest fragrance in Gucci's The Alchemist's Garden collection, which is Coty's first batch of fragrances using 100 percent carbon-captured alcohol.

Coty also announced at this year's CIIE that its high-end skincare brand Orveda, which debuted in the Chinese market at last year's CIIE, is scheduled to appear at its very first China facility in central Shanghai on Dec 10.