Alexis Perakis-Valat, one of the general managers of L’Oréal, can show a big smile. Its consumer division, which brings together brands like L’Oréal Paris and Garnier, is worth more than $15 billion, or 36.8% of the company’s turnover in 2023 – the largest share, just ahead luxury – and has just announced record growth figures in the first quarter, particularly in emerging countries with + 24%. While luxury is slipping a little in China, the beauty giant is increasingly taking the lion’s share with its consumer products. Alexis Perakis-Valat sees himself as a “front-line” manager, knowledgeable about the products and the men or women who sell them.
Aged 53, this French-Greek polyglot, HEC graduate, has held numerous management positions at L’Oréal over thirty years, notably working for six years in China. Involved in sustainable development issues – a complicated equation in a mass market – he has great ambitions for the division he has led since 2016, aiming to win over an additional billion consumers. New clients that he hopes to draw from in emerging markets. For L’Express, he discusses his strategy and the challenges posed by environmental and technological issues.
L’Oréal has just published its first quarter results, with significant growth in the consumer division (+11.1%). Is this a long-term trend?
Alexis Perakis-Valat This is a continuation of a very good year 2023 and a good year 2022. I also appreciate that the results of this division are very balanced, because we have double-digit growth on our four global brands – L ‘Oréal Paris, Garnier, Maybelline, Nyx – and in three global categories – hair, skin, makeup. This type of harmonious growth gives confidence for the future. By definition, everything does not deteriorate at once. These results are driven by emerging countries, but also, a little more counterintuitive, by Europe, where the beauty market is very dynamic. Furthermore, there is the incredible accelerating effect of social networks: I have a figure in mind, that of the number of videos on beauty seen last year in the world, 442 billion, or double compared to 2022 .The impact of networks is enormous.
Where does this rise in emerging countries come from?
First there is the expansion of the middle class, a global phenomenon in these countries. Then, the acceleration due to digital and social networks. The third factor is distribution. Modern channels are appearing everywhere, with which we work to ensure that they express the potential of beauty in the most intelligent way. The growth of e-commerce also contributes to this. Across the world, according to World Data Lab data, there are 2.4 billion people who have the income and lifestyle that allows them to access our brands. And today, even if it is difficult to calculate very precisely, we estimate that we have a little more than a billion consumers.
Geopolitical tensions do not seem to have an impact on the development of the beauty sector?
Facts prove that the world has become more stressful over the last thirty years, and that, at the same time, the beauty market has accelerated its growth. I really believe in the “dopamine” effect [NDLR : le lipstick effect, en anglais, selon lequel plus les choses vont mal, plus les personnes ont besoin de se faire du bien]. Furthermore, the advent of social networks has increased consumer expertise. In developed countries, it’s a bubble of pleasure in the middle of a daily life that can sometimes be a little dull. In emerging countries, it is a way of accessing a superior lifestyle, a social marker, a small, inexpensive luxury, cheaper than buying a car. These are the same people who treat themselves to a smartphone, a flat screen and beauty products… A way of saying: there you go, I’ve arrived at something.
You are present in countries where the status of women faces enormous challenges. However, your campaigns highlight theempowerment feminine. For what purpose?
This is a key point, first of all for ethical reasons, in resonance with our values. At L’Oréal Paris, “because I’m worth it” is a feminist slogan. But we also see a correlation between women’s employment and the development of beauty. If you look at the factors that are most linked to the beauty market in a country, there is GDP growth, urbanization and above all the professional autonomy of women.
Alexis Perakis-Valat
© / Fred Meylan / L’Oreal
Solid shampoos don’t work very well, neither does the refillable one. You’ve also tried the conditioner that doesn’t rinse out, without much success. Apart from making recycled plastic bottles, how can you reduce the environmental footprint of your products?
I am convinced that there are still many things to try, that we can learn from our failures and move forward. We have factories water loop [NDLR : où l’eau est en grande partie réutilisée], for example in Mexico. We took the challenge of using all our shampoos from recycled plastic, which constitutes a big financial investment, because we produce a lot of units, and recycled plastic is significantly more expensive than virgin plastic. But where you are right is that it is invisible to the consumer.
Are you taking these environmental initiatives out of obligation or based on economic logic?
There is, first of all, a deep conviction of the group. Our first environmental policy was released in 2012, twelve years ago, with already fairly strong commitments. It is also linked to the model of a company like L’Oréal, with the same family owning a large part of the capital. In the long term, we need a world that continues to turn, and we know very well that States, if companies do not move, will act in their place. I made the decision to switch to recycled plastic in shampoos five years ago. It was very expensive, and I knew it wasn’t going to make us sell another bottle. There is not a state that has yet passed a law banning virgin plastic. Our role is to convince consumers and find the intersection between sustainable development and desirability. There is a difference between what people say and what they do.
Consumer appetite for products with scientifically proven effects is strong today. With mishaps sometimes, like that of Guerlain, who was singled out for his “quantum” cream. How to avoid false promises?
There is one very simple thing to understand: when you buy a product for the first time, you buy it. But if you buy it again, it’s because it’s the best you’ve tried in your life, otherwise you try something else. Our products cannot lie. Our faith in science is reflected in the billion and a half euros invested each year in research. We only make money when people buy our products, because each launch is expensive. When you make a promise, you have to keep it in substance; you can’t just rely on clever marketing.
The trend of beauty tech will it become established in consumer habits, or is it a gadget phenomenon that will pass?
If you think about it, what is mass market ? It’s a self-service world. THE mass market arises from an assisted sale. Digital, for a division like mine, can play an absolutely decisive role, because it is an absolutely brilliant way to provide service on a large scale. How can we use artificial intelligence, generative or not, and augmented reality to install a beauty advisor in the pockets of billions of people? Two examples. Today, when you come across a virtual try-on tool on a makeup sales site, your conversion to purchase is significantly higher than that on a site without a tool, it’s proven. There is another, more prospective example that we presented at the Consumer Electronics Show in Las Vegas, the Beauty Genius from L’Oréal Paris. She’s a virtual beauty advisor. We can ask him questions. To avoid the gadget side, it will be necessary to respond to consumer expectations behind it. In 2027, the QR Code will replace the barcode. In this QR Code, we will put whatever we want. This will be another way of industrializing the service, in a world of self-service.
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