China beauty’s 2025 M&A boom reveals a deeper reset

China’s beauty industry entered 2025 with slower topline growth — and unprecedented deal activity. As mass skincare and color cosmetics mature, capital is no longer chasing virality. It is chasing control, credibility, and category leadership. The result is a decisive shift in mergers and acquisitions toward fragrance, haircare, biotech-led skincare, and globally scalable niche brands. At the center of this recalibration sits fragrance. LVMH’s BDK bet signals a strategic pivot LVMH Luxury Ventures’ minority investment in BDK Parfums was less about a single brand and more about strategic positioning. Founded in 2016, BDK has grown rapidly in Europe and established an early foothold in China through SKP-S, DT51, and Harmay — precisely the taste-making retail ecosystem driving fragrance discovery among high-spending urban consumers. For LVMH, the appeal lies in optionality. A minority stake preserves BDK’s artisanal credibility while securing early exposure to a fast-growing niche segment — before valuations rise further. The bigger message: fragrance is no longer peripheral to luxury strategy. It is becoming a core battleground. Niche fragrance sparks a global land grab BDK is not an isolated case. Over the past 18 months, capital has flooded into high-end fragrance at a pace unmatched by other beauty categories. L’Oréal has taken stakes in Amouage, To Summer, and Seoul-based Borntostandout, while Estée Lauder invested in Mexican luxury fragrance brand Xinú. L’Occitane acquired Italian home-fragrance house Dr. Vranjes, and Chinese retailer-operator Ushopal led a funding round for local niche brand Documents. The message is clear: niche fragrance is no longer niche. It has become the new center of gravity for beauty M&A — prized for its higher margins, emotional premium, and ability to scale culturally before scaling physically. According to industry forecasts, China’s fragrance market is expected to more than double by 2030, growing faster than the overall beauty sector. Young urban consumers are driving the shift, treating scent as affordable self-expression — gravitating toward unisex, non-mainstream profiles that signal individuality rather than logo recognition. L’Oréal doubles down with Kering Beauté acquisition That strategic conviction crystallized further with L’Oréal’s 4 billion euros ($4.6 billion) all-cash acquisition of Kering Beauté, expected to close in early 2026. The deal delivers ownership of Creed and long-term beauty licenses for Gucci, Bottega Veneta, and Balenciaga — instantly strengthening L’Oréal’s grip on haute parfumerie. For Kering, the divestment reflects pragmatism. Despite triple-digit growth in beauty revenues, the division was too small to offset Gucci’s broader slowdown. For L’Oréal, it is a familiar playbook: replicate the success it achieved with YSL Beauty after taking over the license in 2008. In China, the upside is structural. Fragrance is still nascent, distribution remains fragmented, and L’Oréal’s mastery of Tmall, Douyin, and social commerce education offers a powerful engine to turn scent into an experiential category, not just a shelf item. Haircare emerges as beauty’s second M&A hotspot In the first half of 2025, China’s online haircare sales surged 20.7% year-on-year to 34 billion RMB ($4.8 billion), outpacing skincare and color cosmetics. Consumers now treat scalp care like skincare, prioritizing ingredient transparency, clinical positioning, and visible results. Global giants have moved quickly. In June 2025, L’Oréal acquired premium styling brand Color Wow for $1 billion, reinforcing its professional division, which already enjoys double-digit growth in China. A month later, Blackstone led a $592 million bid for South Korea’s Juno Hair Group, underscoring the rising strategic value of salon networks and professional ecosystems. Chinese groups are just as active. Joy Group, parent of Judydoll, took over China operations of René Furterer with Pierre Fabre in January 2024, then acquired Italian haircare brand Foltène later that year. Under Joy Group, René Furterer recorded 72% revenue growth in H2 2024 — proof that localized R&D and distribution matter more than brand origin alone. Capital grows more selective — and more demanding Behind the deal surge is a more cautious investor mindset. In the first half of 2025, 30 of 53 global beauty deals happened in China, but investors are no longer funding growth at any cost. The new checklist is strict: prestige positioning, scientific credibility, and global adaptability. Viral success alone no longer guarantees capital. Brands must demonstrate differentiated hero products, in-house R&D, and the ability to scale profitably across channels. This shift explains why biotech-adjacent players such as Jingbo Bio — known for recombinant collagen — are attracting billion-RMB strategic partnerships, while celebrity-led or purely marketing-driven brands face valuation scrutiny. Celebrity beauty exits move from speculation to execution In 2025, Rhode Beauty was sold for approximately $1 billion, marking one of the largest celebrity beauty exits since Fenty’s early success under LVMH. Founded by Hailey Bieber in 2022, Rhode scaled rapidly on minimalist aesthetics, viral product drops, and a tightly controlled DTC model. Its sale reflects both strong fundamentals — hero products with repeat demand — and structural constraints. Pure-play DTC offers margin protection, but limits retail reach, operational scale, and global expansion, particularly in complex markets such as China. The transaction also sharpens scrutiny on the rest of the celebrity beauty field. While Rare Beauty remains independent, its reported $2 billion valuation underscores rising expectations around durability, not just fandom. Buyers are increasingly focused on what happens after the founder halo fades: supply chain depth, omnichannel readiness, regulatory compliance, and the ability to recruit new consumers beyond core fan bases.

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China beauty’s 2025 M&A boom reveals a deeper reset