'Dual circulation' to boost growth (VI)

A1: Our remarkable performance in China is a decisive factor for L'Oréal's overall performance in 2020. Amid the challenges brought by the COVID-19 epidemic, Chinese mainland recorded 20.8 percent like-for-like at the end of September, significantly outperforming the market, which continued to recover with growth in the third quarter. The speed of recovery varied significantly depending on the distribution channel and category, but the increase in sales in offline stores and in the selective makeup market in China was particularly encouraging.

L'Oréal China outperformed the market and strengthened its position as the e-commerce and selective distribution leader. All divisions gained market share. Besides, the strong performance of L'Oréal China helped our group return to growth in the third quarter and strengthened our confidence in the Chinese market and our overall performance this year.

A2: In the post-epidemic era, the "dual circulation" development pattern is key to economic recovery, boosting domestic demand and upgrading the industrial chain.

We are confident in the prospect of the domestic economic cycle driven by consumption. The better livelihood and stable employment rate in China, as well as Chinese people's increasing income, more willingness and power of spending, and increasing aspiration for a better life, create huge market demands. L'Oréal is dedicated to responding to consumers' upgrading demands for quality products and solutions.

As for "external circulation", L'Oréal has witnessed China's determination to accelerate high-quality opening-up with multiple initiatives. We are fully confident in China's future development and eager to contribute as it becomes the country of "good consumption," an innovation-driven economy with consumers that aspire for higher-quality, more sustainable and safer products, services and experiences.

A3: In the fight against the epidemic, L'Oréal China is deeply impressed by the determination, speed and pragmatism of Chinese government to best contain the epidemic, as well as the discipline, solidarity and heroic spirit of Chinese people, the dedication of experts, medical professionals and even army to fight together.

A4: In the past few years, China has made great efforts to make the Chinese market more stable, transparent and predictable, as well as fairer in terms of competition. It has also been a force of prosperity and stability - from streamlining administration and delegating power to reducing taxes and fees, and from continuous integration with the international community to localization and innovation. As the pace of reform in recent years has sped up, its execution has become more efficient, and China has opened its doors even wider. The more the business environment improves, the more confidence we have in the Chinese market. China is not only set to become the world's largest economy and L'Oréal's biggest market – it is the "laboratory" of the future.

A5: In this "new development stage," supply-side structural reform has long been a top policy objective. The government pledged to also pay attention to demand-side management to further strengthen the new development pattern. Though the global economy continues its downturn and people's daily lives have changed due to the COVID-19 epidemic, people's pursuit of beauty and aspirations for a better life remain the same. Chinese consumers' aspirations for a better life are stronger than ever, all of which leads to the booming trend of "good consumption" – consumers expect to achieve both material and spiritual satisfaction and realize the pursuit of a better life through consumption, and aspire to co-exist harmoniously with nature.

A6: Nothing will change the significant role of China in L'Oréal Group's overall business strategy. The implementation of the "HUGE Project" has also taken L'Oréal China on a broad path toward an even greater vision: to become the No 1 market of the group, to become a future beauty lab for the world, and to become a lighthouse of good consumption for the world.

China's dual-circulation development strategy and continuous efforts in high-quality opening-up will certainly contribute to global development and facilitate globalization, boosting economic growth and vitality. With structural reforms such as foreign investment laws and free trade zones, China is opening-up, increasing interaction and support between domestic and international markets, and creating a high-quality business environment.

A7: We particularly look forward to the government's ambitious plans in innovation-driven development and green development.

If the future looks particularly bright, that's because China is blazing new trails as a global leader in digital and crucial new technologies. By combining large active markets with a dynamic and startup-friendly ecosystem, China is incentivizing innovation and becoming a magnet for pioneering talent. L'Oréal firmly believes that these changes will make China an innovation epicenter of our planet, a laboratory of the future.