Debuting in China in 2014, as part of the globalization plan initiated by Denton, Erno Laszlo has enjoyed robust growth, up by more than 100% year-on-year. Handout.

US skin care brand Erno Laszlo was founded in 1927 by the eponymous Hungarian dermatologist who helped rid a Belgian princess of acne, reduced the facial scars of a Hungarian actress, and was publicly endorsed by Marilyn Monroe, Audrey Hepburn and Jacqueline Kennedy.

But for Charles Denton, the British entrepreneur who took over Erno Laszlo in 2011, the historical brand founded in an era when there was no laser treatment or plastic surgery is thriving in today’s global beauty industry, particularly in China.

“Today’s Chinese consumer is well educated, well-informed and has the confidence to make independent decisions. Ten years ago, she might have dressed in Chanel from top to toe because she knew it was a safe bet. But now she has grown into a confident consumer who knows all about brands, and favors one if she understands its valuable position,” said Denton, chairman and CEO of the New York-headquartered brand.

With decades of management experience in the beauty industry, Denton worked for luxury personal care brand Molton Brown for 16 years before it was sold to Japanese cosmetics giant, Kao Corp, in 2005. He then headed a number of charitable organizations before joining Erno Laszlo in 2011.

“The more understated, niche and unique the brand, the more consumers are going to gravitate toward it,” he said, during an interview with China Daily recently, before opening the brand’s first Asia flagship store in Shenzhen, Guangdong province.

His theory is backed by the brand’s sales performance. Debuting in China in 2014, as part of the globalization plan initiated by Denton, Erno Laszlo has enjoyed robust growth, up by more than 100% year-on-year. Its sales in China are expected to grow from 60 million yuan (US$8.54 million) in 2017 to 350 million yuan in 2019.

Globally, the beauty industry had seen its “most dynamic growth in a decade in 2018,” according to Hannah Symons, head of beauty and personal care at consultancy firm Euromonitor International, the report said.

It increased by 6%, reaching $488.3 billion last year. China, in particular, has been one of the fastest growing markets. It is forecast that by 2023, China alone will contribute more sales than North America and Latin America combined.

Asked about his growth plan in China, Denton was quick to respond.

“I think 20 to 30 spaces over the next two to three years are definitely feasible for us. Today, 80% of our revenue in China is derived from online.

“What we are building here are not stores. They are interactive spaces where people can experience the brands. Of course we have products, but also treatments and services and inspiring ideas.

“So the retail space needs to solve different problems to have a reason to exist. I think the problem that we need to focus on is human connections. I think people are hungry for experiences that improve their lives, because products are no longer enough to help.

“There are all sorts of different events in your life that are important like going for an interview, relationships, work and so on. And a lot of that is reflected in your skin. If you are stressed or not sleeping, your skin can show this. So we are creating an environment that can address the causes as well as the symptoms. We call it the 360 degrees skin wellness philosophy.”

And why choose the first flagship store in Shenzhen?

“Like many smaller brands, we began our journey with a distributor who has done a great job in establishing our brand through a few department stores and online. And about 18 months ago, we took over the distribution and set up our own operations in China. Now, we have the expertise, knowledge and support of our investors to manage our destiny directly.

“We’ve been in Hong Kong for a while and it is interesting to compare Hong Kong with Shenzhen. Shenzhen seems to have a clear vision of what it wants to be. I think it is an inspiring and hopeful city. With that in mind, it’s a great place for us to make a statement about the future of the brand in China.”

And the key to success in China?

“I think most brands are looking to China to be part of its accelerated story. To succeed in China, you have to play by the rules, engage with the market as extensively as possible, including innovative and inspiring ways of marketing. It’s all positive and uplifting in China.

“The market in China is the most competitive and the standards are clear. The country is setting a lot of new standards for the beauty industry. But if you can succeed in China, you can take all the learning and innovation and use it anywhere in the world.”

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