LVMH, L’Oréal, Shiseido Eye Stake In Aesop. Can The Clean Beauty Brand Crack China?

    Rising demand and fierce competition for a stake in Aesop signal growing interest in the clean beauty market. How is the brand faring in China?
    Rising demand and fierce competition for a stake in Aesop signal growing interest in the clean beauty market. Photo: Shutterstock.
      Published   in Beauty

    What happened

    Brazil’s Natura & Co., parent company of Australian cruelty-free brand Aesop, is working with Bank of America and Morgan Stanley to explore the sale of a stake in the luxury fragrance and bath brand. Notably, a deal could put a value of 2 billion (13.5 billion RMB) on Aesop, according to Bloomberg.

    The sought-after premium beauty label has attracted the attention of French conglomerates LVMH and L’Oréal, as well as Japanese group Shiseido, all of which have reportedly bid for a stake in the business. A deal has yet to be reached.

    Sao Paulo-based Natura & Co. revealed back in October 2022 that it was assessing options to unlock Aesop’s value, including a potential IPO, or spinoff, to improve company profitability.

    The Jing Take

    When it first entered China in 2018, ​​the B Corp-certified label experienced a bumpy ride. Due to local regulations on animal testing, Aesop could only sell to China through cross-border e-commerce trade via Tmall. Then, in May 2021, China’s government lifted the animal testing requirements for imported beauty products, which enabled the clean beauty brand to expand offline. In November last year, it opened its first mainland brick-and-mortar store — a 308-square-meter space occupying a two-story building in Shanghai's Dongping Road. Another store in Shanghai is on the way.

    Aesop’s rapid expansion is indicative of the vast demand in China for beauty products made from natural ingredients. According to Mintel’s latest study on China’s beauty market, 77 percent of participants believe that healthy or clean products are safer than ordinary versions, and over 60 percent think they are more effective, putting the mainland ahead of other major markets in terms of demand.

    With consumer awareness expanding, the comparatively less crowded clean beauty race looks highly promising from a business perspective. No wonder some of the world’s leading cosmetics giants are jostling to take a stake in Aesop.

    Such a move would likely be beneficial for both parties. In China, being clean and cruelty-free is not enough to compete against local and international rivals and meet domestic consumers’ sophisticated demands — any new entrant would require the support of experienced teams to navigate China’s unique market dynamics.

    The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.

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