Estee Lauder launches exclusive skincare brand for China

According to The New York Times, consumer spending by China’s wealthy elite has generated a whole new market for the world’s luxury personal goods makers. With a population of over 1.3 billion, China is poised to leapfrog Japan and the United States to the $28 billion top spot by 2015.

 Estee Lauder is the latest American-based company to make a deep inroad into the Chinese market with the launch of a new brand, created specifically for the Chinese market. China itself represents the company’s third-biggest market — after the United States and Britain — accounting for about $500 million in annual sales.

In mid-October, Estee Lauder plans to introduce a hybrid East-meets-West beauty line called Osiao (pronounced O-Shao). The brand name begins and ends with the letter “O,” a symmetry intended to convey a sense of harmony and balanced skin. Estee Lauder executives also liked that the word Osiao contained five letters — a lucky number in China, they said.

Developed at a company research institute in Shanghai and manufactured in Japan, the cosmetics line is aimed initially at customers in China and is scheduled to go on sale first in select specialty stores in Hong Kong.

Company researchers in China spent several years extensively studying different types of Asian skin, he said, and the company tested the Osiao products on several thousand women in Hong Kong and mainland China, as well as Japan and Korea.  Osiao’s specialized formulas, for example, contain Chinese plants like ginseng.

Positioned as a luxury brand, Osiao’s skincare products includes facial serums that cost about $211.

With competition from Lancome and Aupres (Shisheido’s skincare line for the Chinese market), we’ll have to wait to see if Estee Lauder’s market research efforts can translate into market success.