Cosmetics Giants L'Oréal And Estée Lauder Expand In China, Focus On Smaller Cities

Luxury cosmetics companies L'Oréal and Estée Lauder are expanding their operations into China's tiers 2 and 3 cities and smaller urban centers. Expansion into China's secondary cities, where 75 percent of the country's urban population lives and which account for two-thirds of retail sales, helped Estée Lauder grow its retail sales by 28 percent in the second quarter ending December 2012. Consumer companies find China's smaller cities more attractive than their larger counterparts because of their higher average disposable income per head.