L’Oreal China to cut prices
L’Oreal China became the first international cosmetics brand to confirm a cut in its retail prices in the wake of the mainland government’s confirmation of a tariff cut this week.
The government said it would cut the tariff on imported skin care products from five per cent to two per cent on June 1, along with cutting other tariffs on imported goods by an average of 50 per cent.
“We have decided to actively respond to this decision by lowering the prices of most of our imported products, as we believe it will encourage domestic consumption,” L’Oreal said in a media statement issued on Tuesday.
China’s government announced the cuts in an effort to encourage domestic consumption and reduce the amount of money spent outside the mainland – by travellers purchasing duty free offshore, and by crossborder traders through Hong Kong.
Meanwhile, analysts predict online trader JD.com will benefit from the duty cuts because its business is largely based on the sale of brand name products.