L’Oreal: Educating Chinese Consumers Through Sports & Online Video
L’Oreal is a Paris-based cosmetics company with worldwide sales of €20.34 billion ($26.96 billion) in 2011. L’Oreal entered mainland China in 1996, and currently holds the second largest percentage of market share behind Procter & Gamble. Operating three factories in China, L’Oreal has launched 17 brands – including two local Chinese cosmetics brands. It aims to become the biggest player in this fast-growing market.
Historically, the cosmetics industry in China has focused solely on female consumers. However, Chinese and foreign MNCs view male consumers as an emerging market to place their investments. L’Oreal needed to develop an appropriate marketing strategy to target Chinese male consumers to develop a skincare market for men.
In light of Li Na‘s historic French Open win, Chinese people, especially the younger generation, grew interested in tennis. L’Oreal became an official sponsor of the 2011 Shanghai Rolex Masters to capitalize on its audience of young male viewers. L’Oreal cooperated with the most popular P2P Internet streaming media site in China called PPTV, which streamed the sporting event live for the first time ever. L’Oreal marketed its new product through the partnership (Hydra Energetic Anti-Dullness Moisturizing Gel Cream) as the “choice of successful (tennis) masters” (“大师制胜之选”). L’Oreal not only named the live-streaming channel after its product, but was also the only advertiser on the site. Besides online ads, L’Oreal also invited distinguished tennis stars like David Ferrer to endorse its products.
With the help of PPTV’s wide coverage across its website, software, and apps for iPads and iPhones, more than 10 million users watched the tennis event from October 8-16, 2011. L’Oreal benefited from the tremendous viewership that gained exposure to its new product through the ubiquitous advertisements. In addition, L’Oreal was able to further learn about the preferences and needs of its target market through online questionnaires that accompanied the event’s live-stream. These firsthand insights can help L’Oreal better navigate China’s emerging male cosmetics market in the future.
The China Observer View:
Athletic event sponsorship has traditionally appealed to marketers because viewers tend to have a strong emotional connection to the event. The is why companies like Visa and Coca Cola spend excessive amounts of money to endorse high-profile events like the Olympics and World Cup. Marketers should be willing to experiment combining traditional marketing vehicles like events with emerging technologies to create a differentiated message in the marketplace.