This investment of several million euros by L’Oreal is alongside several companies including Cisco, Nokia and Accenture marks the French giant’s embrace of digital technology which not only caters to beauty products but also educates consumers in the process.
French cosmetics giant L’Oreal has disclosed it is investing in an early stage fund managed by Partech Ventures, a private equity firm.
This marks L’Oreal second biggest investment in digital and technology start-ups in less than a year.
Without disclosing its investment amounts, L’Oreal has stated that it was investing several million euros in the fund along with companies which include Nokia, Cisco and Accenture.
Based out of Paris, France, Partech Ventures has offices in San Francisco and Berlin. It has invested in websites such as made.com, a furniture retailer, and restaurant booking specialist – lafourchette.com.
“These investments in new technology will … enrich our brands and their communication, as well as other aspects such as supply chain, research and innovation,” said Lubomira Rochet, L’Oreal Chief Digital Officer.
In 2012 itself, L’Oreal had set up an internal start-up unit in Silicon Valley. In May 2016, it further invested in Founders Factory, a digital incubator which is co-founded by Brent Hoberman, former CEO and co-founder of lastminute.com.
Through these investments L’Oreal internally developed technologies, which include a skin sensor which monitors the wearer’s exposure to ultraviolet rays. The tech could help consumers educate themselves about sun protection.
The company is increasingly going digital. In 2015 5% of its total sales were made online. While five years ago, its digital team had a headcount of 150 people, now it totals to more than 1,000, with hundreds hired in 2016.
L’Oreal is increasingly embracing the digital world: 25.5% of its advertising budget is spent on digital communications. This percentage is set to expand rapidly in countries around the world, and especially in the Middle East, where consumers are increasingly becoming more tech savvy and are looking for beauty tips and are buying beauty products online.
“Digital has become the heart of the group’s marketing strategy,” said Rochet.
L’Oreal has a significant presence in the e-commerce market in countries such as the United States, Germany, China, and the United Kingdom.
Its e-commerce sales are also rapidly rising in countries such as Indonesia and Russia, said Rochet.