Mininurse problems more than skin deep

When L'Oréal bought Mininurse from Shenzhen firm Raystar Cosmetics, chairman and CEO Lindsay Owen-Jones trumpeted the 2004 purchase of the skincare brand as "a major step forward" for L'Oréal in China. "This acquisition is an outstanding opportunity to speed up our development in the Chinese market," he said. The proposed deal, followed in a matter of weeks by news that L'Oréal had snaffled its second local brand, Yue Sai, from under the nose of Procter & Gamble, made a lot of sense. The beauty business is booming in China's new market economy. Skincare products, accounting for 40 per cent of the market, are leading the charge. Mininurse, one of China's best-known skincare brands and especially popular with young women, offered L'Oréal the opportunity to target the mass market, having already successfully established a firm foothold at the premium end of the market. Mininurse, first launched in 1992, had built up an impressive distribution network of 280,000 outlets. The deal secured L'Oréal the brand, the factory and its national marketing network. It is believed L'Oréal sees Mininurse as a platform to further develop its mass market Garnier range in China, where the brand currently exists in the hair care segment. The launch of several new lines, all bearing a new endorsement in their communications that they stemmed from Garnier's research and development expertise, would support this. The tone of the advertising has been predominantly Western, in common with all L'Oréal's advertising communications in China, even for Yue Sai, which L'Oréal saw as a Chinese name with international potential. The intervening months since the buy haven't been kind to Mininurse, however, experiencing a significant decline in market share while rival brands have prospered. Garnier's launchpad appears to be losing some of its spring. L'Oréal's challenge of how best to incorporate a domestic brand into its overall portfolio is one increasingly faced by MNCs in China increasingly on a buying spree of local firms in order to target the mass market.