Perhaps the toughest came from China, where for years it successfully rode the wave of the country’s beauty boom, selling buckets of hero products like Estée Lauder Advance Night Repair Serum to Chinese consumers.
One of the biggest issues, sources said, seems to be the company’s reliance on daigou — the practice of Chinese consumers purchasing products at lower prices overseas and selling them at a discount in China. While exact numbers are not known, analysts say that Lauder was certainly active in this area. When the Chinese government cracked down on daigou, Lauder was left in a difficult spot.
As a result of the slower than expected recovery, Lauder once again cut its full-year forecast in November, sending its share price down by around 19% to close at $104.51, a six-year low. For context, it peaked at over $370 in January 2022. On a more positive note, the company’s early investment and incubation arm, New Incubation Ventures, made minority investments in two Chinese brands,Lauder is hoping, too, that its China Innovation Labs, which opened in Shanghai in 2022, will better position it to capture growth and accelerate locally relevant innovation in key categories.
Source: News Formal (newsformal.com)
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