For two consecutive days, two Chinese beauty brands have received investment from international beauty giants.
On December 14, the information of the enterprise check showed thatChinese professional base makeup brand Blank Me is half in oneThe parent company "Shanghai Yongxi Information Technology" has undergone a shareholder change, and a new shareholder is LV Kaiteng No. 1 (Chengdu) Equity Investment Partnership (Limited Partnership). This is the first renminbi ** of L Catterton (Chinese: LVMH), a subsidiary of LVMH, the world's largest luxury goods group.
And on December 15, New Incubation Ventures (NIV), an investment company owned by Estee Lauder, announced that it wouldChinese fragrance brand Melt SeasonCarried out strategic investments, with related investment amounts to tens of millions of yuan, with Palm Capital as the exclusive financial advisor. This is also the second time that Estée Lauder Companies NIV has invested in China after the celebrity brand Codemint, and it is also the first investment in a local fragrance brand in China.
Let's start with these two brands.
Blank Me, founded in Shanghai in 2016, is positioned as a professional base makeup brand, committed to developing base makeup products suitable for Chinese.
The brand has established the world's first skin optics laboratory, a Chinese women's skin optical atlas research system based on more than 200,000 priority data from 100 commercially available products in 7 cities across the country, an original R&D system based on skin optical models, and exclusive technology patent innovation based on skin optics.
Thanks to its innovative ability and strong marketing in base makeup, Blank Me has gradually become the head brand in the base makeup category. According to Tmall data, in 2019, Blankme's first base makeup product was launched in half a minute, and the brand has climbed to 15th place by 2020In 2021, Blankme will become the No. 1 base makeup brand in ChinaIn 2022, it will still rank first in the domestic products of Tmall base makeup category.
In comparison, Melt Season is a much younger brand.
In 2021, Melt Season, an oriental perfume brand founded by Ni Lishi, opened pre-sale on the WeChat mini-program, and the brand was officially launched. At the beginning of its establishment, Melt Season received investment from 13 Capital, and in March 2022, it received an angel round investment of more than 10 million yuan from Breeze Capital.
So far, Melt Season has not yet entered e-commerce platforms such as Tmall, JD.com, and Douyin, and the only online sales channel is the brand's official WeChat** mini program. In the two years since its launch, Melt Season has launched two new fragrances, and so far the brand has a total of 10 fragrances from 4 haute couture collections and 6 classic collections.
Although the new product is slow and the channel is single, Melt Season attaches great importance to the cultivation of core consumer groups.
In 2022, Melt Season will open its first brand *** Dustland on Taiyuan Road, Xuhui District, ShanghaiIn May and September this year (2023), it opened its first store in Beijing, Taikoo Li Sanlitun, and Yanyu, a store in Kerry Center in Shanghai. In addition to the three ***melt seasons, it has also opened themed pop-up stores in Shenzhen MixC Tiandi, Hangzhou Tianmuli and Shanghai Qiantan Taikoo Li this year to reach more consumers.
It is worth noting that LV Kateng's half-first investment in BLANKME and NIV's investment in Melt Season are both the second investments made in China in a short period of time.
On September 16 this year, Venture Health, which had been led by Shiseido's Ziyue**, announced the completion of Series B financing, with a financing amount of more than 200 million yuan, jointly led by LVKateng (Chengdu) and CLSA Capital. Similarly, on September 7 this year, Estee Lauder Companies' NIV invested in Comemint, a pure beauty brand founded by celebrities, completing the first investment of the ** in China.
Within three months, the two beauty giants** have completed two investments in Chinese companies in succession, and the speed and passion staged are very special at a time when new consumption is generally cold. Compared with the giants' close research and exploration of China's subdivision through investment, the invested companies may be the party that gains more.
Once upon a time, the cutting-edge beauty brands that relied on the rapid rise of Xiaohongshu and Li Jiaqi were once the "sweet and sweet" in the eyes of capital, and it even took less than three years to complete the brand's establishment to listing. With the gradual fading of traffic and channel dividends, this batch of brands that have grown from capital has also fallen rapidly in the capital market, and a stubble of cutting-edge beauty brands has fallen, and the brands that can survive are still struggling to transform and survive.
After that wave, in fact, the capital circle began to circulate the question of 'does there really exist a consumer brand in China'," the founder of a cutting-edge makeup brand shared to "Fbeauty Future Traces", "so the investment in this area (brand) has also cooled down, and capital is flowing to the upstream end of technology and raw materials, which can enhance its own industrial strength." ”
Against this backdrop, the investment from the "famous" beauty giants is a huge star effect for the cutting-edge brands with individual labels and the hidden upstream "unicorns".
First of all, for emerging brands, investment from the background of large international companies is undoubtedly a good marketing weapon.
From the perspective of Estee Lauder Companies' NIV investment, it has made a total of three investments this year - including the British perfume brand Vyrao invested in March this year, the Chinese pure beauty brand Codemint invested in September, and the Chinese perfume brand Melt Season, which has just officially announced its investment, all three beauty brands were established after 2020, and the brands all have strong personal characteristics of the founder.
For example, Melt Season can also be counted as an influencer brand to a certain extent. In addition to being the founder of Melt Season, Ni Lishi is also a shareholder of Kunyin Entertainment, a Chinese idol star-making company, with a shareholding ratio of 1225%。
The popularity of celebrities, coupled with the endorsement and affirmation of large international companies, is a "publicity wealth" for brands. Regarding NIV's investment in these emerging brands, many industry insiders believe that the return on investment is "uncertain", and the influencer brand itself has its own risks. "Overall, combined with the comprehensive advantages of the Estee Lauder Group in the fragrance category,NIV's investment is far less significant to the group's ecological construction than the advertising effect it brings to the invested brands. ”
For relatively low-key upstream technology companies, getting the investment of giants is tantamount to a booster for breaking the circle and expanding.
Take Neo-Health as an example. In August 2022, Ziyue**, which was exclusively funded by Shiseido China, invested nearly 100 million yuan in the first round of financing of Recombinant Collagen Biomaterials company Venture Health, which instantly pushed Venture Health, a high-tech company established only 7 years ago, into the spotlight.
A year later, another beauty giant, LVMH, once again made a move on Neo-Health, and under the annotation of a pair of industry eyes, Neo-Health Medical's Series B financing of more than 200 million yuan was completed, becoming a sweet spot in the investment field.
Fbeauty Future Traces found that so far in 2023, international beauty groups such as L'Oreal, Unilever, Estee Lauder, and LVMH have completed at least 15 venture investments in brand companies. Among them, there were 7 investments in brands and 8 investments in upstream technology companies. Beauty giants also have a certain preference for CVC investment.
In the first category, Estee Lauder and LVMH pay more attention to emerging brands on the potential track.
NIV, the early-stage investment and incubation arm of The Estée Lauder Companies, was unveiled in March 2021. According to the data, the division tends to work with "forward-thinking founders and entrepreneurs to create, fund and support the world's best emerging beauty brands." This can be seen from the above three investment cases this year.
LVMH has made four investments this year, three in brands and one in a popular track (recombinant collagen).
In the second category, both L'Oréal and Shiseido have set up investment companies in China, especially preferring to invest upstream and establish cooperative relationships outside of investment.
In June this year, L'Oréal made a minority stake in the US biotech company Debut through its venture capital subsidiary**bold, making it the company's exclusive beauty industry investor.
L'Oréal said the move aims to accelerate its entry into the synthetic biology market by partnering with Bakar Labs, a groundbreaking biotechnology incubator at the University of California, Berkeley, to meet the growing demand for breakthrough ingredients for cosmetics, skincare and packaging.
In September this year, L'Oréal made a minority investment in Shenzhen Shanhai, an innovative Chinese biotechnology company, through Shanghai Meici. According to Zhang Jiaheng, founder and CEO of Shanhai Innovation, the two parties have jointly carried out supramolecular development research on a variety of active ingredients in the fields of advanced care, makeup, hair care and hair coloring.
In addition, L'Oréal's investments in Digital Village, a metaverse service platform, and Prinker Korea Inc., a Korean microprinting start-up, have also been accompanied by collaborations with portfolio companies.
In addition, it is worth mentioning that Shiseido, which also invested in NeoHealth, also announced that it has established a cooperative relationship with NeoHealth, and the two parties will jointly carry out R&D and innovation on the medical aesthetic track.
In addition, from the perspective of the brands that have been invested, brands that focus on subdivision tracks and focus on green, natural and sustainable are more favored.
Beauty giants have invested in a total of eight brands, most of which are in natural ingredients, pure and sustainable brands. For example, LVMH**-invested skincare brand Irene Forte Skincare and haircare brand Maria Nila, and Estée Lauder Niv's Vyrao and Comemint Skin, all of which focus on natural ingredients and are pure and sustainable.
In addition, the international beauty CVC also pays attention to the opportunities of the subdivision track, and the brands of professional hair care brands, scalp care, professional base makeup and other subdivisions are also quite popular. For example, in addition to the half-share investment in Blankme by L Catterton, a subsidiary of the LVMH group, Unilever Ventures has made two rounds of investment in the Australian scalp care brand Straand this year, showing strong confidence in the return on investment.
Looking at the investment market in the beauty track, it is one way to expand the business scope by investing in the acquisition of brands to achieve revenue growthBy investing in the upstream and downstream of the industrial chain, exploring their own industrial synergy is becoming another rapidly rising trend. CVC is accelerating the landscape change in the beauty market, and for international companies, a more open and in-depth innovation mechanism is a strategy to adapt to the new cycle**.
Written by Xiang Tingting.
Edited by Xia Shiyuan.
Proofread by Li Lin.