In the midst of a mass exodus of high-end brands and retail chains, one brand is still finding a way to make money: makeup.
And it’s not just in China.
In an interview with Bloomberg Businessweek, L’Oreal cosmetics founder Luca Brasi outlined the importance of making money on makeup.
“We’re seeing a lot of people who are leaving their high-quality brands and their high brands, because of a lack of access to the market,” Brasi said.
“The beauty industry is not very big in China, so people are leaving brands that they’re passionate about and want to continue to support.
It’s not like we have to take a hit, but the brand has to have a higher profit margin.”
Brasi also revealed that his cosmetics empire is on track to earn more than $3 billion by 2020, a figure that’s only likely to increase in the coming years.
Read more: L’Oréal: ‘It’s not the end of the world, it’s just the beginning’ “Our customers don’t have access to quality makeup products.
The only brands that are really profitable are brands that have really strong branding and brands that can really push the boundaries,” Brasis added.
“So, we think that in the long term, L&R will continue to grow and we will be profitable.”
The beauty company has been struggling to compete with high-priced brands such as Hada Labo and Guerlain, both of which have been on a roll lately.
Brasi told Bloomberg BusinessWeek that the L’oréal brand is more than just a makeup brand.
He said that the brand is an “ethical brand” with the mission of making cosmetic products “consistent and ethical.”
“It’s about making cosmetic things, which is about having a high level of care,” Brasy said.
L’Orèal is still a profitable business, with revenue growing by more than 30% annually in the fourth quarter of 2017.
But Brasi acknowledged that he’s aware that it’s challenging to continue making cosmetics in China given that there are so many other companies making similar products.
“I’m not complaining that we don’t make great products, we’re making great products,” Brases said.
The problem, he said, is that there aren’t enough people making good products to keep up with demand.
For more on L’Occitane cosmetics, check out our full interview with Brasi.