(Yicai) Nov. 12 -- L’Oréal is continuing to strengthen its focus on local innovation in China by partnering with startups and embracing digital transformation, according to executives from the French cosmetics giant who attended the just concluded China International Import Expo.

At the major trade show in Shanghai, Clichy-based L’Oréal announced the winners of its North Asia Big Bang Beauty Tech Innovation Program, with 16 startups picked from among 600. The program started in the Chinese mainland in 2020, and has since expanded to Japan, South Korea, Hong Kong, and Taiwan.

“Big Bang was created more as an attempt to encourage and to nurture and find partnerships with young startups in China,” said Pankaj Gupta, senior vice president for L’Oréal’s operations in China and North Asia.

Most of the program’s winners have become commercial and co-development partners, bringing value back to L'Oréal and contributing to its ecosystem. One startup even secured investment from L'Oréal’s venture capital fund BOLD.

Gupta said the company is trying to boost local production in China and reduce its dependence on international supply chains.

Over the past four years, L’Oréal has expanded its manufacturing capacity in the Chinese cities of Suzhou and Yichang, he said, adding that it is also relying more on digitization and automation to react to demand fluctuations as online sales in China, more than in any other market, are highly volatile.

The company has been using a product called Skin Dr, which provides personalized skincare recommendations after analyzing skin, according to Joyce Lui, chief digital officer at L'Oréal North Asia. The firm is also stepping up its use of artificial intelligence, she added.

L’Oréal’s sales in North Asia fell 3.1 percent in the first three quarters of this year, with Chief Executive Nicolas Hieronimus acknowledging the situation in China has become more challenging. But he expressed confidence in the Chinese market's long-term potential and hopes government measures will help restore consumer confidence.

Editor: Tom Litting