L'Oreal's planned expansion into China's USD32 billion beauty market had been burdened with complications. This was after the expansion in the country's beauty market, the second biggest economy in the world, required testing products to animals.
L'Oreal agreed to pay USD843 million for Magic Holdings International Ltd, a Chinese cosmetics face mask maker. The Paris-based beauty company had planned to accelerate into China where it had gotten about 6% of its sales last 2012. However, China's government requires animal testing for every product introduced in the country. This complicates the said expansion as L'Oreal is barred by European Union rules barred to test on animals within the EU.
China is the only major market in the world where beauty product companies must test products on animals. Rabbits had been killed to conduct Chinese tests said London-based animal rights group, Cruelty Free International.
These policies had been seen to create dilemma for companies including L'Oreal as they are compelled to follow China's regulations. The shampoo and lipstick maker wanted to sell in a country without having to alienate clients in markets where sentiment for humane treatment of animals is strongly imposed.
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