Coty Cuts Deal With Alibaba to Court Chinese Beauty Shoppers

(Bloomberg) -- Coty Inc. wants to get closer to valuable Chinese consumers of cosmetics, hair care and fragrances, and will do so through a partnership with Alibaba Group Holding Ltd.

The beauty company and online giant are teaming up on interactive vending machines in malls of major Chinese cities, as well as on initiatives with beauty and hair salons, and lets Coty tap into Alibaba's data on domestic consumers. Coty will also work with Alibaba's product design division, the Tmall Innovation Center, to develop new items specifically for China.

The Alibaba pact “underpins our commitment to growth in China,” Coty Chief Executive Officer Camillo Pane said. The partnership will let Coty provide “increasingly more personalized experiences both online and offline,” he said.

Many of Coty's products are already sold in Chinese beauty shops, hair salons and convenience stores, and brands including Max Factor, Philosophy and Wella are sold on Tmall's marketplace. Coty's luxury fragrance labels, such as Gucci, Tiffany and Philosophy, are sold in high-end department stores.

About three-quarters of Coty's revenue comes from North America and Europe. The company doesn't break out China sales. Pane said on a conference call with analysts in August that Coty's presence in China remains small, though all three of its divisions -- mass market, luxury and professional beauty -- saw double-digit growth in the region last fiscal year.

The partnership with Alibaba seeks to bridge online capabilities with physical stores. Several of Coty's brands were part of a recent Tmall fashion show, and a pilot program for Coty's Wella Professionals hair-care line used the platform to let shoppers try on and purchase hair looks online, then redeem the service at a hair salon.

Alibaba has been signing numerous deals with international companies seeking a bigger slice of the Chinese market. In August, Seattle-based Starbucks Corp. said it would test a service that delivers drinks and baked goods through Alibaba's Ele.me food site. In October, Swiss luxury company Richemont, which owns brands like Cartier and Vacheron Constantin, announced a venture with Tmall to create new mobile apps and online stores.

To contact the reporter on this story: Kim Bhasin in New York at kbhasin4@bloomberg.net

To contact the editors responsible for this story: Anne Riley Moffat at ariley17@bloomberg.net, Lisa Wolfson

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