Author | Zheng Qiao. After a series of unsuccessful attempts, Ke Holdings finally succeeded in acquiring land in the land auction market. On July 30th, Xi'an Jiajia Zhihe Real Estate Co., Ltd. won two plots of land in the core sector of the second ring road in Xi'an, with a total transaction price of 0.134 billion yuan. The plot numbers are WY10-9-177-1 and WY10-9-177-2. The controlling shareholder of the company is Beihaojia (Xi'an) Real Estate Development Co., Ltd., a residential development service platform established by Ke Holdings in July 2023.

Editor | Wang Xiaojuan

Another family heir has exited the corporate management team.

Recently, the Estee Lauder family announced that the third-generation heirs Jane Lauder and William Lauder will be stepping down from the group's operation. This marks the first time since Estee Lauder was founded that no family members are involved in daily operations and management.

Current Executive Vice President Stéphane de La Faverie will succeed Fabrizio Freda as CEO, with the appointment taking effect on January 1, 2025.

Behind this change in leadership is Estee Lauder's response to its underperforming results.

Just a few days ago, Estee Lauder announced its financial results for the first quarter of the 2025 fiscal year (July-September 2024). During this fiscal quarter, the group's revenue decreased by 4% to 3.36 billion US dollars, with organic revenue declining by 5%. The performance decline was mainly attributed to the sluggish Chinese market and the overall decrease in demand in Asia, leading to a net loss for the group of 0.156 billion US dollars, compared to a net profit of approximately 36 million US dollars in the same period last year.

This is also the first loss for Estee Lauder in the past five consecutive quarters, even if to give investors an explanation, Estee Lauder must quickly find a "firefighter".

After all, Estee Lauder's stock price has been in a slump for a long time, and the current stock price has even fallen back to the levels of ten years ago.

However, the performance decline encountered by Estee Lauder in China is not an isolated case, international beauty and luxury goods giants are also collectively disappointed in the Chinese market.

In the first half of this year, sales in the North Asia region of L'Oreal fell by 1.7% year-on-year, while sales in Shiseido's China region fell by 7% year-on-year.

Faced with declining performance, international brands are attempting to hedge through "price increases". Since the beginning of this year, brands under the L'Oreal Group such as Armani, YSL, brands under the Estee Lauder Group such as Estee Lauder, La Mer, MAC, and Shiseido have all announced price increases.

However, in a more rational consumer environment, it is even harder to gain consumers' favor after price increases, which also leads to more and more inventory accumulating. Estee Lauder also mentioned in the 2023 fiscal year report that "retailers tightening inventory" has put pressure on performance.

Once upon a time, Estee Lauder and other international big name cosmetics brands almost monopolized half of the high-end cosmetics market in China.

Brands are actively expanding into the Chinese market, aiming to achieve more growth. For example, Estee Lauder continuously improves its channel layout through brand acquisitions and agency, and implements a development strategy across all channels and multiple scenarios, covering general retail, travel retail, and online sales channels.

Prior to this, Fabrizio Freda has always wanted to "seize" the future by attracting young people. The report shows that in early 2019, the average age of active consumers of Estee Lauder's four major brands, MAC, Tom Ford, Estee Lauder, and La Mer, was only about 30 years old. In addition, to cater to the younger group, in 2018, Estee Lauder Group allocated approximately 75% of its advertising expenditure to online channels.

However, in recent years, the layout of brands has also led the market into a slow growth era. According to data released by the National Bureau of Statistics, from January to July, the total retail sales of cosmetics in China reached 241 billion yuan, a slight increase of 0.3% year-on-year.

Furthermore, China is becoming more rational, and the consumer attitude of "buying right, not expensive" has made them no longer continuously pay for high-end beauty products, instead turning to products with high cost performance. Take Estee Lauder as an example, the retail sales in the high-end beauty market in mainland China have further declined from a 10% decrease in the fourth quarter of the 2024 fiscal year to around 15%, with the market demand remaining weak.

With the rise of domestic beauty brands, Chinese consumers are "abandoning" imported cosmetics. Customs data shows that from January to July this year, the total amount of imported cosmetics and personal care products nationwide was 9.659 billion US dollars, a year-on-year decrease of 11.1%. In comparison, domestic beauty giant Proya has achieved revenue and net income growth for 18 consecutive quarters.

In the face of changes in the Chinese consumer market, having a management team member who understands the Chinese market is crucial. Huashang Jianwen learned that in the past year, Stéphane de La Faverie has visited Shanghai four times.

Public information also shows that Stéphane de La Faverie is a veteran member of the Estee Lauder Group. Since joining the group in 2011, he has served as the global president of Origins and Darphin, the global president of Estee Lauder brand, and the executive president of Estee Lauder Group, and so on. Before joining the Estee Lauder Group, he had been a senior executive in the high-end beauty industry, including a 9-year tenure at L'Oréal, during which he held positions such as Vice President of Marketing for Lancôme and General Manager of Armani Beauty in the United States.

Before becoming the Executive President of Estee Lauder Group, Stéphane de La Faverie also helped Estee Lauder's perfume business become another strong growth driver for the company.

Financial reports show that despite a 2% year-on-year decline in net sales for the 2024 fiscal year, perfumes have become the only growing category for the group, with net sales of 2.487 billion US dollars. Especially in the Asia-Pacific region, dominated by China, it has achieved double-digit high growth, with the net sales of the group's high-end perfume brand Le Labo nearly doubling in the Asia-Pacific region.

However, for Estee Lauder, increasing the sales of other core business sectors is the key to winning the future.

Whether Stéphane de La Faverie can lead this struggling beauty giant to regain its former glory remains to be tested by time.