With 40-percent of its revenue generated in a shrinking Eurozone, France-based cosmetics company L’Oréal is eyeing fast-growing economies such as Rwanda and Ghana
for expansion, according to a report in SeekingAlpha.
Emerging economies are experiencing stronger buying power and it’s showing up in L’Oréal’s revenue mix.
About 40 percent of L’Oréal’s revenue comes from emerging markets (Eastern Europe, Latin America, Africa, Middle East, and Asia Pacific) — a 62 percent increase since 2005, when just 25 percent of L’Oreal’s revenue came from emerging markets.
While European markets face shrinking revenues as consumers cut back on spending,
L’Oréal could very likely see itself expand into Africa, SeekingAlpha reports.
L’Oréal and Unilever were among 11 companies fined a total of $1.17 billion US by France’s antitrust regulator over allegations of a conspiracy to rig the prices of products including shampoo and toothpaste, Bloomberg reported in December.
The eurozone was officially declared in a state of negative inflation on Jan. 7, with prices depressed by falling energy prices, and no end in sight.
L’Oréal also has three plants in Africa and the Middle East including one in South Africa and another in Kenya, producing about half the products it distributes in Africa, according to its website.