Risk and Assets of the Former Implation of Sephora in China

Deluxe: How luxury lost its luster, by Dana Thomas, brings a hard hitting, raw look at the world of luxury and the mass demand of luxury that has occurred. The book was published by the Penguin Group in 2007. Luxury is defined by Thomas as truly special, and was only available to the aristocratic world of wealth and old money in western culture. Luxury signified an experience and lifestyle that denotes royalty, fame, and fortune. However, with large companies owning the former family-owned luxury producing businesses, profits are the main goal not the production of luxury. Thomas reveals the unfortunate demise and rise of

This report is based on the ‘L’Oreal: Expansion in China’ case study. L’Oreal is a successful French cosmetic company that involved into many different international markets. This report will discuss how L’Oreal gets into the Chinese cosmetic Market and the strategic to develop their brand in the Chinese market. L’Oreal acquires two famous Chinese cosmetic brands which are Yue-Sai and Mininurse. It is in order to entrance the market quickly and sales the most suitable products. The aim of this report is to define the challenge L’Oreal has been faced. Then it describes how L’Oreal managing their strategic in Chinese market. In addition, it gives an accommodation which could help L’Oreal overcoming these challenges.

2008 financial crisis caused severe trauma on the world economy, although the economy of China grew moderately, China 's financial system is very fragile, the financial laws and regulations are deficient, the structure of foreign change reserve is very risky, because China has huge foreign exchange reserve of US dollar, which makes China also suffer from the financial crisis. Financial crisis is caused by the American subprime mortgage, to combat the financial crisis, the United States issued a substantial amount of U.S. dollars, which makes the U.S. dollar depreciate continuously, and this action makes many countries that have great amount of foreign exchange reserves in U.S. dollars suffer huge losses. China has the largest foreign exchange reserves in the world, in 2008, China’s foreign exchange reserves had reached $ 2 trillion, the continues devaluation of the U.S. dollar make China suffered a lot, thus the international capital system based on U.S. dollars has been questioned, China and other countries that also hold a huge amount of U.S. dollars started to build a new international capital structure. In 2011, China, Japan

In 2008, the Global Financial Crisis broke out; both the American economy and the economy in the West suffered a hard blow. However, a big economy system in the East emerged unexpectedly. China is now able to challenge the America’s decades-long dominant position in economic area. Started during the middle of 1990s, China’s manufacturing industry developed rapidly that billions of exports were floating out, and China was given the title of “the world’s factory”(BBC). By the end of 2010, China with a GDP of $5.8 trillion, surpassed Japan’s GDP of $5.48 trillion, became the world’s second largest economy system (BBC). China also exceeded Japan became America’s largest foreign securities holder. Since then, China has been seen as the US’s

The consumption of luxury goods in China is mounting sharply. Not only those born to elite families, but also many common people are greedy for luxury brands (China, a Booming

Cosmetics and personal care industry is growing day by day as people are becoming more sensible about their appearance. Not only women but men are also attracted to improve their looks. Canadian men had started taking care of their skin and became more conscious about beauty to enhance their professional credibility. Men’s grooming market has viewed growth since 2010 with little downfall in 2014 and then again grew and reached at CAD 1,009.0 million in 2015 (Graph 1) (Passport

China’s financial markets are still fairly primitive however China has one of the highest saving rates in the world. This is Largely due to rising incomes, but also due to the lack of a robust social safety net to protect citizens from changing economic circumstances such as unemployment and population ageing. The banking sector was only opened to foreign competition at the end of 2006. This forced Chinese banks to become strong and efficient so as to compete with the international banks. In making the banks more efficient, state owned enterprises also had to increase their efficiency as they no longer were allowed to take low cost loans that were running at a loss for the state bank. These economic developments coupled with increased prudential standards and the improvement of lending practices has allowed for savings to be allocated efficiently for investment purposes, to support medium term growth in the Chinese economy.

It is hard to imagine that after the financial crisis swept across Europe, many great transitional enterprises had to face collapse and bankrupt while the luxury goods industry become more prosperous. Recently, the French luxury goods group LVMH announced their recent business condition. The volume of the first week in October had incredibly increased by 12% the previous week. The Hermes Corporation also said that in order to meet the increasing number of market demand, it would open 15 branch stores in the latter half of the year. These aroused some fierce debates, the public held a skeptical opinion towards the questions: How can the luxury companies maintain their positions? Why didn’t they strike down by financial crisis?

Young girls are more concerned about acnes and blackheads while mature women are looking for anti-aging and anti-wrinkle products. Genders do affect the choice of skin care products. In the past, skin care products only belong to the girls’ world. Nevertheless, in recent years, men are increasingly becoming more and more concerned about skin care. With a view to this latest trend, various brands have started developing men’s line. Income level directly affects the purchasing power of customers. Skin care products take up a wide range of price levels from far less than a hundred dollars to more than a thousand. Young girls who do not have any income cannot afford the expensive skin care products while mature women with higher purchasing power focus more on quality and effectiveness. Occupations also determine the need for skin care products. Models and artists generally have a higher consciousness on skin care than people with less exposure to the public.

According to the specialists, there are many reasons for this global financial crisis. We try to focus some prime reasons behind this

This behavior brings competitive advantages to the European luxury brands. Moreover, customers in different countries have different purchase behaviors. For instance, some countries’ customers are willing to move away from common recognized brand, because they want to purchase more exclusive products. Furthermore, because of the increasing speed of globalization, people are more likely willing to travel between different countries. These travelers will buy luxury good during their trips. In fact, Chinese tourists contributed over one third of sales in Europe. The luxury goods industry should notice to adjust the actual demand between local people and tourists in Europe

The cosmetics business is a billion dollar industry. Every year, women are responsible for consuming millions of cosmetic products. The cosmetics industry is so large because of several factors. The media is a huge contributor to the intense pressure to look a certain way. The idea that "sex sells" is evident in gossip magazines, movies, advertisements, music, and more subtly- in the business world. People first notice what race someone is, how beautiful or ugly they are and what clothes they are wearing. Beauty is skin deep; however, first impressions are usually what others use to base their

e. The Chinese Association of Fragrance, Flavor and Cosmetic Industry put 2008 total sales of cosmetics at $19 billion, with a steady average growth rate of 15% during the last five years which has and will sustain despite the global economic downturn.

Key managers that can run each business independently but with a group vision are also part of the equation. Additionally the luxury industry is strongly dependent on tourism which is influenced by economy trends. The 9-11 events and the global economy slowdown have had a great impact on the industry. Finally huge investments were done to win strategic position, having an important impact on revenues. Appendix 5 is an example of the proportion of cost and impact on revenues and the stock performance.

The overall sales of luxury goods in the year 2009 is expected to be more than US$150 billion and Asia contributes 10% to it. The concept of luxury is now not confined to only to Europe and US, the Asian subcontinent contributes majorly to it, with India and China as the newly emerging markets. Professor James Twitchell (2002) comments on the democratization of luxury and the changing consumer psychology These new customers for luxury are younger than clients of the old luxe used to be, they are far more numerous, they make their money far sooner, and they are far more flexible in financing and fickle in choice. They do not