Burberry boom: Coty CEO optimistic of further growth for Burberry Beauty in China

During the company’s fourth-quarter earnings conference, CEO Sue Y. Nabi highlighted that Burberry Hero has climbed the ranks to become the number three male fragrance in China. 

According to the firm it is behind blockbuster fragrances Bleu de Chanel and Dior Sauvage.

At the same time, Burberry’s Beyond Wear Perfecting Matte Foundation has been ranked number five in the premium long-lasting foundation category on e-commerce platform Tmall.

Since the COVID-19 restrictions lifted at the end of 2022, Coty has seen its China sales rebound.

Nabi expressed the potential of Burberry in China, especially with the upcoming launch of Burberry Goddess fragrance, which features the brand’s first-ever refillable bottle.

“With the imminent launch of Burberry Goddess in China, we are very excited about the potential of the overall Burberry brand,” ​said Nabi.

Nabi concluded: “We firmly believe in the significant potential of the China market for Coty, where our brands are highly desired but still limited in distribution and scale. The continued strong beauty demand in China despite macro fluctuations and our expansion opportunities in this market, position China as an incremental addition to our medium-term outlook rather than a key building block.”​

Skin care success in China

The company is riding on the wave of its success in China with the Monagasque skin care brand Lancaster.

It grew 15% year on year as Ligne Princiere took off in mainland China and Hainan.

Lancaster Ligne Princiere launched in March and unveiled its first flagship store in Hangzhou, in partnership with one of China’s leading department store retailer, INTIME.

Since its launch, Lancaster has been experiencing store sales growth of 20% to 30% month on month.

“I am very encouraged by the initial results with the overall Lancaster brand revenues in Q4 growing over 15% year-over-year,” ​said Coty CEO Sue Y. Nabi.

Nabi highlighted that the brand has had impressive conversion rates, thanks to the success of Ligne Princiere.

“The conversion rate at new counters in China, especially in Hainan, is exceeding leading beauty peers, with Lancaster Ligne Princiere driving the majority of sales.”​

She added: “Overall, feedback on the brand and products is very positive and, importantly, repeat intent of purchasers is over 40%, which I have to say, is absolutely a very proud moment for Coty scientists and the entire Coty skincare team.”​

“With such strong fundamentals for the brand, the focus now is on increasing consumer traffic, to be fuelled by mastering the Chinese digital ecosystem.”​

Nabi highlighted that livestreaming has been crucial to the success of Lancaster in China.

“Livestreaming has been a key pillar in growing Lancaster’s brand awareness, storytelling and trial in China, and this is just the beginning.”​

She added: “Our Lancaster livestream sales are growing month-over-month. In fact, KOL livestreaming on Douyin that took place in the quarter generated over $300,000 in sales in only three and a half hours.”​

Nabi also noted that the brand has not been affected by the difficulties in the APAC travel retail space like fellow beauty majors Estee Lauder.

“What we are seeing in Hainan is that our shelf space for Lancaster has not at all been affected by all the pressures we are seeing.”​

The crackdown on diagous shoppers, individuals who buy on behalf of others for a small fee, has also not affected the company, given the size of its business in China.

“We are not exposed to this kind of phenomenon, given our small size, but also given how much we are willing to pay a very strong attention to preserving the brand equity of the brands we have into Coty,” ​said Nabi.