Estee Lauder 2011 Annual Report Download - page 26

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wealth increases, they are becoming more attracted to Western brands, especially luxury brands. We have
been building the necessary infrastructure to develop China as a second home market. An early example of
this was the opening of our new Innovation Center in Shanghai. This exciting new Innovation Center
expands the Company’s existing research capabilities, reinforcing its strong commitment to
local consumers by developing products tailored to the specific needs of Chinese and Asian skin.
While all of the brands that we sell in China are doing well, we are especially pleased with the progress of
the Estée Lauder and La Mer brands. Estée Lauder became the number one prestige brand in its distribu-
tion in China in fiscal 2011, growing faster than total prestige beauty. La Mer gained additional traction by
selectively expanding its distribution via the launch of its Chinese e-commerce site and opening in new
doors. In fact, in fiscal 2011, the La Mer brand increased its sales by 55 percent in China.
In Russia, prestige beauty growth is led by the fragrance category, an area where we have historically been
strong. By honing in on this fact and promoting our fragrance brands, we have been accelerating
growth at
a steady pace above the country’s overall prestige beauty market. We also have been strengthening
our infra-
structure and talent organization so we will be better positioned to take advantage of the growing
opportunities in this market.
24
RIGHT: GoodSkin Labs Exten-10™ Instant Youth Boosting Moisturizer
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