Despite a softening economy, Estee Lauder is continuing its investment in the Chinese market with a push into some smaller cities. China sales grew 8% in the last quarter, lower than the highs the company reached at 20%.
Estee Lauder is increasing distribution within the country, with a particular investment online, as historic gains came primarily from e-commerce and mobile commerce. Further, Fabrizio Freda, CEO, claimed that Estee Lauder will be planning to invest in freestanding stores, particularly with entry-level brands like MAC, in areas where department stores are scarce or nonexistent.
Luckily for the company, Estee Lauder has a good business relationship with Alibaba Group Holdings' Tmall platform, which Freda said has been a good business builder due to the company controlling the image, equity and execution of the brand. Tmall has partnerships with many different retailers, running their online stores.
