Sephora wants to expand into the second-tier business district at high speed

Yesterday, Lin Guozhong, general manager of Sephora (Shanghai) Cosmetics Sales Co., Ltd., said that Sephora will start to accelerate its expansion in China and open 100 stores within five years. After gaining a firm foothold in Shanghai, European cosmetics retail giant Sephora began to seek greater development in China.

Lin Guozhong stated that Sephora's third store in China will open in Super Brand Mall in Pudong in December this year. “We originally planned to open only two stores in Shanghai this year, but the business conditions of the first two stores are better than expected, so the plan for the third store will also be on schedule.” In April and August this year, Sephora has Opened 2 stores in Shanghai.

Why did Sephora's 3rd store not be selected in the top-tier retail districts such as Xujiahui and Nanjing West Road, and was selected at Super Brand Mall in Pudong? To this, Lin Guozhong stated that “For Sephora, the competition for core locations will not hesitate to spend money, but the core area for high rents is mainly to establish an image. At the same time, we also hope to get better returns by opening stores in second-line locations.” Lin Guozhong is currently Focusing on more potential good locations, “Shanghai Minhang, Xinzhuang, and Wujiaochang will all have great commercial potential, and they will only benefit from entering the market first.” Lin Guozhong said, “Looking at the South Mall in Minhang, for example, It is remote but the spending power is very strong. We are very likely to enter the South Mall through our partner Carrefour.” Sephora’s second store opened in Gubei Carrefour.

As a relatively high-end cosmetic product, can it be effectively rewarded if it enters a relatively weak consumer capacity? Lin Guozhong is not worried about this, saying Sephora will seek more exclusive agents for non-line brands besides selling first-line makeup brands in stores.

As the only retail brand under LVMH, the world’s largest luxury goods group, Sephora has continued LVMH’s consistent and steady style in China. Since opening its first store, it has launched a second survey of the Chinese market. Surveys show that there are 40 million in China. Target consumers, but the sales channel for cosmetics is concentrated in a smaller number of department stores, which prompted Sephora to set a long-term goal - to open more than 100 stores within five years. In order to accomplish this goal, Sephora will invest 400 million yuan.

Not long ago, Guo Shaoming, chairman of the Hong Kong Salsa Group, also stated that Salsa will invest HK$100 million to develop the mainland market and open more than 100 retail stores within five years. Both of these "homes" are planning to start in 2007 and compete for the market at the speed of 30 stores per year. This means that after 2007, cosmetics retail stores will be as popular as Starbucks in major cities such as Shanghai and Beijing.