APAC’s the way: China the growth driver as APAC delivers three of top five markets for L’Occitane

Business in the Red Dragon grew 24.4% from 17% of the business in FY2021 to 18.1% in FY2022 despite being plagued by various factors, such as lockdowns, customs delays, logistics issues​ and the resurgence of COVID-19 and the Omicron variant.

For net sales, China recorded a 22% increase from EUR64.9m (US$68.3) in Q4 FY2021, or 18% of the total group growth, to EUR79.2m (US$83.3m) in Q4 FY2022.

The country continued the profitable streak to contribute most to the overall growth since Q3​ due to online and offline sales. Retail stores in China also increased from 198 to 208 outlets for this FY.

Besides China, the top five growth markets of the firm included two more APAC regions – Japan at EUR206m (US$216.9m) and Hong Kong EUR118.8m (US$125.1m).

Japan had the second-largest number of retail stores at 154 after China, whereas Hongkong and Taiwan reduced the number of stores from 33 to 29 and 53 to 51 respectively.

“China contributed most to the overall growth in FY2022 12M, followed by the US, the UK and Hong Kong. Like-for-like growth was 9.0% in FY2022 Q4, a robust performance considering the re-emergence of COVID-19 in key Asian markets including China and Japan​,” said chairman Reinold Geiger in the group’s statement.

Bigger picture​

The other two of the top five growth markets for the company are the US and UK, at EUR 296.8m (US$312m) and EUR197.4m (US$207.5m) respectively.

The group’s net sales grew by 16.7% to EUR 1.81bn (US$1.89bn) in the 12 months ending March 2022, chiefly driven by its flagship brand L’Occitane en Provence as well as the premium range ELEMIS​ and US body care brand Sol de Janeiro. The body care brand is the maker of cult-favourite Brazilian Bum Bum Cream popular among millennials and Gen Zs.

Compared to FY2020 on a like-for-like basis, the Group’s sales saw a 12.4% increase in the period of FY2022. Online sales were accelerated in Q4 of FY2022 compared to Q3 FY2022, accounting for 33.1% of the overall sales in this fiscal year.

“FY2022 Q4 saw a strong growth in web partners, retail, wholesale and travel retail. Online channels remained robust and posted a growth of 5.8% in FY2022 Q4 against an outstanding growth of 60.5% in FY2021 Q4. Despite the rapid rebound of retail and wholesale sales in FY2022 12M, online channels still accounted for 33.1% of the overall sales, as compared to a record 37.6% in FY2021 12M,”​ the statement read.