Stéphane de la Faverie, president, chief executive officer and director of The Estée Lauder Companies announced this news on February 4 during the firm’s second quarter earnings conference.
“We are thrilled that The Ordinary is debuting in Mainland China this month with its proven disruptive launch strategy,” he said.
De la Faverie succeeded Fabrizio Freda as the beauty giant’s top executive as of January 1 this year, after the latter announced his intention to retire in August 2024.
This comes on the heels of another troubled quarter in Asia Pacific, where net sales decreased by 11%.
The firm attributed this to double-digit declines in China, South Korea, and Hong Kong, where consumer sentiment remained subdued.
The challenges in APAC impacted the firm’s skin care sales, which decreased by 12%.
“The challenges in Asia Pacific and our Asia travel retail business have the greatest effect on our skin care category,” said De la Faverie.
Reflecting further on the company’s challenges in the last few years, he highlighted that the firm’s strong presence in the prestige segment negatively impacted its business more severely.
“Subdued consumer sentiment in China greatly pressured the prestige beauty industry and our business. Given our strategically strong share in prestige beauty with the Chinese consumer, we were disproportionately impacted,” said de la Faverie.
The Ordinary would allow the company to capture a broader audience in China as it is a brand that attracts consumers at the “entry of prestige”.
De la Faverie said there was huge demand for the brand “as demonstrated by our ability to move huge amount of units in multiple points of distribution.”
Earlier this year, The Ordinary expanded its online presence in the US with its debut on Amazon US.
“We are very excited with the launch earlier this week of The Ordinary at Amazon, because it will allow us to capture greater number of consumers. And that we can just aspire to do it in many places around the world,” said de la Faverie.
In 2022, Estée Lauder launched The Ordinary in India, helping to drive 50% growth in the country during its 2023 fiscal year.
La Mer and Clinique CX
Despite the environment in China, Estée Lauder’s luxury skin care brand La Mer had “significantly” gained share in market like China in the last quarter.
“In Mainland China, La Mer grew in retail, in contrast to the industry’s decline in prestige skin care, driven by its new rejuvenated night cream,” said de la Faverie.
The company also launched Clinique CX in last November.
“Clinique CX, the brand’s new advanced post-procedure treatment franchise for China, further epitomises our aspirations. Clinique CX debuted in November at the Chinese Dermatologist Association with medical device through classification after less than 12 months development from concept to launch,” said de la Faverie.
He highlighted the importance of bringing new innovations to market, which he admitted the firm has been lacking of late.
“We also did not deliver sufficient levels of on-trend innovation in our time-to-market often put us behind trend. This happened as prestige beauty became nimbler, driven by both incumbents and new entrants as we learn with our own indie brand, The Ordinary, along with faster-moving consumers magnifying our issues.”
