From a L’Occitane Hotel pop-up l in Hainan Province, China, to a Sol de Janeiro activation at Melbourne Airport, Hong Kong-listed beauty and skincare company L’Occitane Group’s travel retail business is raising its visibility considerably in 2024.
For the nine-month period ending December 31, 2023, the company’s net sales reached EUR 1.92 billion, up 18.9 percent, mainly driven by the continued “outperformance” of Sol de Janeiro, the “decent” performance of Elemis and the “steady” growth of L’Occitane en Provence in China — trends that L’Occitane travel retail will continue to lean on in 2024.
In this interview, Retail in Asia speaks with Mona L’Hostis, director of marketing, Global Travel Retail, L’Occitane Group, on the company’s latest initiatives in travel retail.
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RiA: Tell us about how you view the travel retail landscape in Asia Pacific.
Mona L’Hostis: The travel retail sector is characteristically resilient and bullish, so I feel optimistic about the post-pandemic era in Asia Pacific.
The APAC region represents a significant growth opportunity for niche premium beauty and skincare brands in our portfolio such as L’Occitane en Provence, Sol de Janeiro, and Elemis. The Asia Pacific duty-free market value reached USD42.1 billion in 2022 and is predicted to grow substantially by 2028 to more than USD65 billion. The region has a burgeoning travel and tourism sector along with a number of new international routes driving the market for duty-free retailing.
RiA: Are there particular markets that stand out for 2024?
L’Hostis: The likes of China, and of course Hainan, South Korea, and Japan have increasingly established themselves as beauty, fragrance, and skincare hubs, keen to welcome upcoming innovative premium brands. We have also witnessed the strong growth for local C-beauty brands.
Of course, historically, the APAC region has had a rich tradition and appreciation of beauty, fragrance and skincare rituals, and consumers are increasingly engaged by fresh and unique premium brands with a strong identity and ethos. We know that APAC has seen a marked surge in domestic travel since the pandemic, but also international travel is increasing.
In fact, M1nd-set, the Swiss based leading agency in travel research, recently highlighted high growth rates in international traffic last year at Singapore, Bangkok, and Hong Kong airports, and predicted a healthy resurgence of traffic to the Asian market this year. The ending of visa restrictions both for the international Chinese traveller and foreign visitors to China is supporting inbound and outbound growth.
It’s also worth noting that there’s been strong traffic for CNY with ‘revenge travel’ proving a major drive for mainland China outbound tourism.
The markets where we can expect impact from the Chinese ‘revenge travel’ trend are South East Asia, Japan, Hong Kong and parts of Europe. There has also been a marked rise in travel from China by Millennial and Gen Z travellers, 31 percent and 16 percent respectively. Although the luxury market in China has not experienced growth, there is enhanced interest, particularly among young affluent Chinese travellers, in authentic and personalised experiences, socially responsible brands and sustainable luxury products and services.
According to recent data from M1nd-set, 75 percent of those Chinese questioned were planning a trip intended to shop in duty-free shops, with beauty purchases, particularly skincare, dominating the shopping basket. This upturn has resulted in renewed confidence among airport and duty-free shoppers, once again keen to rediscover favourite, as well as new and experiential international brands.
RiA: What have you observed on the group’s travel retail performance in the region, and what are keys to success?
L’Hostis: L’Occitane Group has strengthened its multi-brand strategy in global travel retail with a well balanced portfolio of brands and distribution network. As a Group, we are investing significantly in the Asia Pacific region with L’Occitane en Provence, Elemis, Sol de Janeiro, and Melvita.
We have achieved steady growth in L’Occitane en Provence in China. APAC grew 6.7 percent at constant rates in FY2024 9M. This was mostly contributed by the strong 21.9 percent growth at constant rates in China, thanks to L’Occitane en Provence and the continued development of Elemis.
RiA: Do tell us about the different brands you look after at L’Occitane Group and how you are plotting your strategies for these brands, specifically within Asia.
L’Hostis: We are investing heavily in L’Occitane en Provence, with the aim of continuing to drive awareness for the brand in China, as well as in other key markets. We’ve launched major eye-catching disruptive campaigns over the last few years globally and in 2023 launched our L’Occitane en Provence global travel retail OOH campaign with massive investment and digital presence at 13 airports in five countries that included China and Chinese hubs. This campaign will be continuing throughout this year. It focuses on the brand’s ingredients, people, products, and sensations.
Our efforts for the brand include innovative advertising campaigns at airports and in local markets, which are now aligned. This is not the case for most brands, but we really wanted to harmonise communications between travel retail and domestic markets for L’Occitane en Provence, in other words to ‘echo local markets,’ which makes a huge difference.
We are focusing on our expert categories where we have particular expertise and know-how: skincare, haircare and bodycare. Our Shea Butter hand cream was voted the number one premium hand cream brand by Euromonitor, and we are also the number one premium haircare brand in Japan and number two in China. We are also focusing on skincare with the Immortelle Divine Cream and Reset Serum.
Our body care brand, Sol de Janeiro, has proven a global sensation particularly with millennials and Gen Z customers thanks to its authentic and joyful philosophy that celebrates diversity, body positivity and inclusivity. The best-selling Guarana-based Bum Bum body cream and Cheirosa 62 body mist for body and hair have enjoyed superb results globally. The brand has been launched in Melbourne to great effect and we will continue to roll out the brand globally.
Elemis is another of our high performance, premium skincare beauty brands that we will be growing in Asia Pacific. It is now in the local Chinese market, and we are investing in growing the brand in Asia Pacific and the Middle East. Elemis is currently the number one brand in the US in terms of media value.
RiA: Are there certain L’Occitane brands that are promising, or have surprised you with regards to their performance or the buzz being generated in the region?
L’Hostis: All our key travel retail brands are showing great strength and a promising performance in Asia Pacific. However, it’s worth highlighting our skincare brand Sol de Janeiro, which has experienced explosive growth globally following its launch nine years ago.
Having successfully launched in travel retail in Europe and the US, and debuted in Asia Pacific, the timing is perfect for further expansion into the APAC region, as the brand continues to make its presence felt on and offline worldwide. With its appeal to both millennial and Gen Z shoppers, the brand is likely to succeed with tech-savvy younger APAC consumers who are highly influenced by e-commerce and social media and who will have already been aware of the brand’s strong online and digital marketing presence. Sol de Janeiro has been established for a few years now in Australia with Mecca – and launched last summer with Sephora Southeast Asia.
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RiA: What are some initiatives that the group is undertaking to differentiate your brands, and perhaps elevate that travel retail experience?
L’Hostis: As a group, we want to emphasise a holistic, authentic, agile, and dynamic approach to the APAC market. In travel retail terms, we will continue to focus on understanding and responding to customer dynamics and offer quality engagement and excellent customer service. We will continue to create innovative, disruptive, and arresting activations at airports. These will include digital and in-store experiential campaigns, fun and imaginative pop-ups and customer exclusive offers and loyalty programmes.
In the case of L’Occitane en Provence, in January we launched our very first L’Occitane en Provence pop-up hotel at CDF International Duty-Free Complex in Sanya, Hainan in association with China Duty Free Group (CDFG). It is the first interactive and immersive ‘hotel’ experience that we have staged in global travel retail. The installation offered visitors an immersive experience with unique animated features that virtually whisked them off to the forests and fields of Provence. The pop-up underlined the sustainability philosophy and credentials of L’Occitane en Provence.
It is essential that we continue to find dynamic mechanisms to engage travellers and to enable them to learn more about the brand’s products, production and brand values. We use every opportunity to underline the brand’s core messages regarding sustainability in a fun and creative way and we will continue to do this in forthcoming travel retail campaigns.
Sol de Janeiro also offers so many possibilities when it comes to visibility with its inherently dynamic character and joyful persona. The pop-ups we have been rolling out globally in the last year have proven to be showstoppers with colourful and fun sampling, Samba music and dancers and gift with purchase. We have implemented a disruptive strategy for the brand which has included the temporary installation of giant-sized product dummies at airports, large advertising screens, and hostesses offering product testing while wearing roller skates.
We want to elevate the travel retail experience for the consumer and to make travel retail the shop window for all our brands by identifying and appealing to the clients and operators we want to target.
Much as the pandemic period was hugely challenging for our industry, we are excited to see the green shoots of growth, particularly in the Asia Pacific region.