L’Oréal to transform into a beauty-tech company


The world’s leading beauty company, L’Oréal, has operations in 150 countries. Turkey is among the 20 largest in terms of market sales. The global cosmetics group appointed a Turkish country manager last September first time in its 35-year history in the market. Sinem Sandikci Gokcen, who has 22 years of experience at the company, is also the first female country manager of L’Oréal Turkey.  

This is part of the company’s glocalization strategy they have been developing for the past ten years, according to Gokcen, who says that local managers are much more sensitive to the social needs of specific countries, which differ from each other despite globalization. Headquarters tend to commission local managers if they can find one with the right profile and experience. 

“It takes a while to analyze the country with foreign managers. Therefore, the biggest difference a local manager brings is the ability to analyze the dynamics, culture, experiences, and changing habits of the country more quickly. Indeed, locality brings more courageous and sincere progress in the decisions that need to be made,” Gokcen said. The other reason the headquarters included Turkey in the list of countries with local country managers is that Turkish talent was exported to the global network of the company, she said. “Everyone we sent represented Turkey very well. Their hard work, dedication, responsibility, and entrepreneurial spirit, especially in difficult decisions, made the stars of the Turks shine within the L’Oréal Group,” she noted. 

The preference of a woman for a country manager role, on the other hand, is not surprising for L’Oréal, which has been proactively committed to promoting diversity, equity, and inclusion for over 20 years. Women make up 50% of board members, 59% of global brand managers, and hold 55% of key strategic positions within the company as of the end of 2021. The company was recognized by the Bloomberg Gender-Equality Index for the fifth year in a row in 2021. 

The company also likes to create role models, especially in places like Turkey where women’s representation in senior management is low, said Gokcen, who describes her role for the company as hitting two birds with one stone. “I will try to do my best to meet both goals, being sensitive to local issues and being a role model as a woman,” she said. 

Her role, to preserve Turkey’s place among the biggest 20 markets of the global L’Oréal network of 150 countries, is not easy, especially under the current economic environment of high inflation and unpredictable foreign exchange rates. In 2021, the world overcame the covid-19 pandemic, which changed consumer habits, and now 2022 has arrived with new problems at a global scale: the supply chain. All of these crises lined up with each other like a perfect storm, as Gokcen puts it. But, she has plans.

Being a techno-beauty company

L’Oréal Turkey’s biggest goal is not to make compromises on their big picture, which is to create the beauty that excited the world. “We have built our story on three revolutions,” she said. The first is the digital revolution – the company wants to transform into a techno-beauty company. The faster the transformation is completed the better the positive return for the company will be, Gokcen noted. The second one will be the sustainability revolution, which will shape the 2022 strategy with new products and marketing techniques that appeal to Generation Z, the new consumers of beauty products. 

“Third, we try to position our brands more strongly in the eyes of our consumers. The pandemic showed people how important it is to be on the safe side with brands they know and trust more,” said Gokcen, adding that they are lucky to have a portfolio consisting of prominent brands, from Lancome to Kerastase, from Kiehls to Garnier, Ipek, and L’Oréal Paris. They also follow a strategy that ensures these brands are compatible with the environment. “Being the preferred brand in terms of sustainability is very critical for us. We have determined a strategy for our brands to underline this as well,” she said. 

Growing faster than global

The global personal care market did not grow between 2019 and 2020, Gokcen stated. The market, comprised of 40% skincare products, is expected to close the year with a USD 500bn market size. E-commerce comprises a 20% share of this. The global market, which is a saturated, mature beauty market with similar key players, grows by 5% each year. As the world is getting out of the pandemic, it will grow by 10% this year. The growth projection for the next five years will be a 4% growth every year. 

The Turkish market, quite a small market compared to the global one, is expected to reach TRY 14bn this year. The expected growth rate, which was 15% before the pandemic for the overall Turkish beauty market, is 25%, and exact figures will be released at the end of this month. In line with the global market, the skincare category, which was growing even before the pandemic, gained a whole new dimension with Covid-19, Gokcen stressed. 

“Therefore, the skincare products will also have a completely different place in L’Oréal Turkey as well. It seems that the category that promises the most growth will be this one,” she added. The weight of e-commerce in the Turkish market is also in line with the global trend, at 20%. “We are small, but we are one of the fastest-growing markets with a very ambitious potential.”

 L’Oréal Turkey tends to grow one and a half or two times more than the market growth, according to Gokcen. “We seem to have achieved that for 2021,” she said.

Gokcen said that the growth of the market would be expected to be 20% for 2022 with the base effect under normal circumstances. As the change in consumption cost is hard to predict under current conditions, we can assume that the growth of the market will be higher. “The sales numbers will be lower but the valuation will be higher in line with high inflation. We will adjust and make investments accordingly. We will be shifting our investments to our workforce, digital transformation, and innovations in 2022.”

Owning a local brand 

L’Oréal products have been in Turkey for many years but the company established a country division in 1986 with just two brands. Today it is the market leader with a 23% market share in the country, selling 25 brands under four complementary divisions –  professional products, consumer products, L’Oréal Luxe, and the active cosmetics division. Each of these is at the top of its sector.

One thing that also supported the company’s leadership in Turkey and made the company among the 20 biggest in the market was an acquisition made in 2007. With the purchase of Canan Cosmetics, the biggest investment made in Turkey by the company so far, L’Oréal Turkey both started producing in Turkey and acquired ownership of the local brand, Ipek. “This took the expansion to a whole new level. Having a production facility in Istanbul and producing 50% of shampoo and hair care products in Turkey gave us great flexibility and allowed us to respond to consumer needs with more agility,” Gokcen said. 

Another thing that’s changed the company recently is its e-commerce and omnichannel transformation, Gokcen added. The company is a leader in also e-commerce, said Gokcen. She hopes to lead the world’s biggest beauty company’s transformation into a beauty-tech company at a local scale, here in Istanbul.

Today, L’Oréal Turkey has nearly 1,100 employees, more than 300 suppliers, and a portfolio of over 100,000 pharmacies, perfumeries, hairdressers, and supermarkets.

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