Yves Rocher sees dip in offline sales

Yves Rocher sees dip in offline sales

Decline due to rising prices, online shift

Yves Rocher (Thailand) Co, the importer and distributor of French skincare products, has forecast Thailand's beauty business via the offline retail channel to contract for a third consecutive year in 2022 partly from higher prices.

Wilasinee Parnurat, the company's chief marketing officer, said the demand for beauty and personal care products via the offline channel is expected to remain in a contraction of 1-3% this year because of the prolonged Covid-19 pandemic, more customers shifting to the online channel and the higher cost of living driven by rising prices of essential goods and food.

"It is the first time that the beauty and personal care market via modern retail channels has contracted for three consecutive years. The main reason is weak consumer purchasing power which is hard hit by rising prices for essential goods and food, as well as the impact of the Omicron variant, resulting in a decline in spending per visit to 2,000 baht from 3,000 baht last year,'' she said.

The beauty and personal care market in Thailand was valued at 75 billion baht in 2021, down by 12% from 2020.

"With the Covid-19 pandemic, customers' shopping behaviour is unlikely to get back to the pre-crisis level when consumers bought beauty products mainly from retail stores,'' Mrs Wilasinee said.

However, she said despite the overall skincare market's contraction in 2020 and 2021, Yves Rocher still managed sales growth of 6% in 2020 and 7% in both 2020 and 2021.

Mrs Wilasinee attributed the company's sales growth largely to its timely digital transformation to attract modern consumers and a full shift of its marketing strategy, distribution channel and customer relations to omnichannel to connect both offline and online platforms.

The number of Yves Rocher retail shops, meanwhile, was cut to only 70 branches in 2021 from 128 before the Covid crisis.

Mrs Wilasinee said the company has set to grow sales by 19% to 1.42 billion baht this year, up from 1.19 billion baht and 1.12 billion baht in 2020 and 2021, respectively.

Of the total sales, 75% will come from skin and haircare products and the remaining 25% from other businesses.

To achieve its goal, it will increase the sales portion of online business to 40% of total sales from 23% in 2020. The rest will come from the retail channel, down from 93% in 2019.

The company plans to close another 15 shops this year because customer traffic at its retail shops declined to only 30% and it is highly unlikely customer volume will return to the pre-crisis level.

It also aims to reposition its body and face treatment business to become a premium spa in some locations and plans to launch new products that benefit both the skin and health as well as the environment.

In a related development, the company yesterday kicked off its "Act Beautiful" campaign, with Davika "Mai" Hoorne and Kanawut "Gulf" Traipipattanapong as presenters to lure millennial customers.

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