Estée Lauder sees big edge over rivals by going deep into China

Estée Lauder realized years ago that there is more to China than Beijing, Shanghai and Hong Kong, and made sure to build a presence in smaller (though still big) cities in the world’s fastest growing luxury market. The beauty products company has a bricks-and-mortar presence in 90 cities in China now, something CEO Fabrizio Freda told in an interview will give it an edge over rivals and sustain its growth even as China as a whole is maturing as a market for high-end beauty products.

数年前，雅诗兰黛就先知先觉地意识到，在中国这个全球发展速度最快的高档化妆品市场，北京、上海和香港等一线城市并不是全部，其他较小规模（与其他国家城市相比依然很大）的城市还有很大的开拓空间，因此该公司坚持将业务推进到二三线城市。在受采访时，弗雷达指出：目前，公司已在中国90多个城市铺设实体门店，随着中国整体发展成为高档化妆品的成熟市场，这将使得公司在业内具有竞争优势，并将维持增长势头。

Still, the company, famous for brands ranging from M.A.C. to Lauder to La Mer, lowered its annual profit forecast on Tuesday and warned investors of slowing trends in China caused by a bunch of factors, such as a crackdown on corruption that has curbed gift giving, turmoil in Hong Kong and a drop in travel by the Chinese. Earlier this week, rival beauty company L’Oréal reported that global sales in its luxury unit rose 4.9% last quarter, slower than the 7.5% pace a quarter earlier, raising concerns that the China juggernaut is losing some steam.

然而，作为拥有M.A.C、雅诗兰黛和海蓝之谜等多个著名品牌的行业巨头，该公司在周二发布的全年盈利预测中对投资者发出警示：由于中国政府大力反腐导致礼品消费减少、香港的乱局以及中国的旅游人数减少等一系列因素，中国市场的增速趋缓。本周初，竞争对手欧莱雅公布，其高档化妆品业务上一季度的全球销售额上升4.9%，相比第二季度的7.5%大幅下降，由此引发了对中国这一重大市场需求下降的担忧。

What is behind the slowdown in China sales?

中国市场销售放缓的原因何在？

"China is slowing down as a luxury market but is still growing very solidly as a luxury cosmetics market, I would like to clarify. The reason (China) growth has slowed down is first, because the affluent group of consumers in the high end and middle class has reached a certain level of saturation (in the biggest cities)."

 “我要澄清的是，虽然中国市场的奢侈品销售趋缓，但高档化妆品市场仍在持续增长。（中国）市场销售放缓，原因之一是（一线大城市）精英和中产阶层的富裕消费者已达到一定的饱和状态。”

"So the growth now comes mainly from the new consumers, while growth in consumption by the affluent consumer has normalized."

 “因此，销售增长主要来自于新增消费者，富裕消费者的消费增长已经趋于常态化。”

What has been the impact of some of the Chinese government’s actions on luxury and the events in Hong Kong?

 中国政府针对奢侈品的举措，以及香港的占中事件，对公司业务有哪些的影响？

"This anti-corruption campaign in the last 12-18 months has reduced the amount of gifting in China of luxury goods, including to a lesser extent, prestige cosmetics. So the consumption for personal use remains very solid, but the gifting habit has decreased."

“过去12-18个月的反腐运动已经令中国奢侈品的礼品数量减少，而其中高档化妆品受到的影响相对较小。也就是说，个人消费仍然相当稳健，但是用于赠礼的奢侈品消费减少了。”

"The political turmoil in Hong Kong has reduced the number of visas, particularly for short-term travel. The combination of this has reduced the number of Chinese traveling and, by extension, those exposed to luxury goods. Many of these people live in tertiary cities where luxury goods do not exist and can only buy them when they travel."

“香港占中事件导致了签证数量的减少，尤其是短期旅行的签证。结果令中国大陆的旅游人数减少，进而导致奢侈品的消费下降。很多生活在三线城市的消费者买不到奢侈品，只能在旅行时购买。”

Estée Lauder was one of the first Western brands to branch out in China beyond the five or so biggest cities and is now in 90 cities there—what impact is that having on your China growth?

雅诗兰黛是首批在这五个一线城市开设分店的西方品牌，目前在90个城市已设有销售点—— 这对你们在中国的业务增长有何影响？

"This was a very important move. When you go deep into populations and you go into cities which are very big but much less international and less exposed to the rest of the world, you become more local." [Some 70% of the company's online sales in China are from cities where this is no distribution yet, something Freda said bodes well for its expansion.]

“这是非常重要的举措。当我们深入接触中国的广大消费者，深入一些比较大的，但国际化程度没那么高、和外界接触比较少的城市时，才离本地化更进一步。”[公司在中国70%的线上销售来自于还没有经销店的城市，弗雷达预见这一业务的前景非常理想。]

"I still believe that the luxury cosmetics market in China will remain in the long term one of the most vibrant and interesting opportunities in our industry."

“我仍然相信，长期来看，中国的奢侈化妆品市场依然是业内最具活力的市场，存在大量的机会。”

You warned of the impact of sanctions on the Russian market—what are your prospects there?

您对俄罗斯市场遭受制裁提出警告—— 您怎么看俄罗斯的前景？

"Russia is obviously a volatile market. But we are doing very well there because we have a diversified portfolio of products there and of retail partners."

“俄罗斯的确是一个比较动荡的市场。但是我们在俄罗斯的业务非常好，因为我们的产品和零售合作伙伴都是多元化的。”

"Russia is softening because the economy is softening. But in the long-term, I still believe Russia will be a superlative market because women there are enthusiastic beauty consumers."

“俄罗斯的业务正随其经济增长放缓而趋缓。但长期来看，我仍然看好俄罗斯的奢侈品市场，因为俄罗斯的女性非常热衷于购买化妆品。”