Provence business in China

17Nov2014

Provence business in China

Prosperity of tourism and wine in Provence France

Provence region, located in southeast France and depicted by many of the most famous painters like Vincent van Gogh, Pablo Picasso, Claude Monet in the 19th and 20th centuries, has been thriving for its tourism and wine industry thanks to the fact that it is the favorite tourist destination for Chinese in France. The image of vast fields of sunflowers and lavenders, magnificent castles, abundant sunshine and rosé wine better presents romance, luxury and cultural and historical heritage that Chinese people especially young generations dream and desire. Not only does Provence attract Chinese tourists to visit and shop, but also it appeals wealthy Chinese buyers to spend huge amount of money for the ownership of vineyards and Chateau just for the sake of good weather, pleasant view and wine tasting with their business partners or clients.

Provence business entering into China

While Provence business effect in China just gets started. Provence economy is extremely boosted by affluent Chinese visitors in terms of tourism, body care cosmetics and wine industry thanks to pleasant and refreshing Mediterranean climate, mistral wind, purple lavenders and Mourvèdre grapes, which are grown under demanding conditions: hot weather and affluent sunshine. And French companies have been fully taking advantage of these God given gifts as well as consumers’ origin sensibility to produce skin care cosmetics, red wine and exported worldwide. China, as one of the emerging and fast-growing markets in the world and its prominent performance in skin care cosmetics and red wine , inevitably caught Provence’s eye and push French entrepreneurs to develop more business opportunities in China. Boom attributed to new urban affluence, nature appreciation and to Chinese fondness of lucky color, together with consideration of healthy aspect in comparison to excessive consumption of rice wines, Chinese appear to have beaten French at one of their favorite pastimes-quaffing red wine. China’s drinkers knocked back 1.8 bn bottles of vin rouge in 2013, an increase of 136% over the past five years, making the country the leading market for red wine.

As the third biggest market for cosmetics in the world, the cosmetics sector on the Chinese mainland has been growing at a fast pace in tandem with the rapid development of the Chinese economy in recent years. Data from Euromonitor reveals that total retail sales of skin care products and make-up products in China reached Rmb131.4 billion and Rmb18.8 billion respectively in 2013, achieving year-on-year growth of 9.1% and 7.3% respectively. People are increasingly aware of the safety issues of cosmetic products. Consumers, manufacturers and regulatory authorities have been alarmed by a series of problems arising from unsafe products. It is believed that the promulgation of the Hygienic Standard for Cosmetics and the Hygienic Standard for Cosmetics Production Enterprises can help regulate the behavior of cosmetics manufacturers and protect the rights of consumers. Although there has been negative news about the quality of cosmetic products from world-renowned brands, mainland consumers are still fond of international brands. They believe that these well-known enterprises have been producing cosmetics for years, and so even though problems have been reportedly spotted in individual products, the overall quality is still reliable. Besides, some young women consider it trendy to use cosmetic products of famous brands.

Business mode of Provence companies in skin care and wine industry

What is interesting for Chinese customers and investors in Provence is skin care and Wine. There are not yet a considerable number of Provence-based companies competing in Chinese market. French cosmetics maker L’Occitane International SA is one of the like, and Pré de Provenc, European Soap LLC is another.

Founded by Oliver Baussan over 25 years ago in the Provence region of France, now it has been expanded up to 1500 stores including business presence in mainland China. All L’Occitane products for bath, body, skin care and home are passionately created to preserve the authentic ingredients and tradition of Mediterranean land and its people. L’Occitane shares the colors, scents and traditions of south of France with the world using only the highest quality natural ingredients, and remains committed to its core values and strives to inspire a lifestyle of natural beauty. L’Occitane was listed in Honkong in 2010 with independent stores in mainland China, intending to use the proceeds of IPO to accelerate its international expansion in high-growth emerging market such as China and Brazil.

As for French wine business, Ravoire & Fils is a typical family-run company established in 1987 in Provence region. They set up a Chinese website page with product profile, news, events and updates about their wine products and local programs they participate in in China to promote and stay relevant in China’s wine business. Most commonly, Provence wine will be exported to China through intermediary trading company, and if possible, to advertise their products through China’s exhibition before entering into local market.