What Happened: Yatsen Holding Ltd. (NYSE: YSG), the parent company of the China-based beauty industry unicorn Perfect Diary, announced on March 2 that it is acquiring the prestige skincare brand Eve Lom from Manzanita Capital. In the deal, Manzanita will retain a minority stake in the business and enter into a strategic partnership with Yatsen. Following the news, the Yatsen shares spiked in value. The company owns leading C-beauty brands Perfect Diary, Little Ondine, and Abby’s Choice. And recently, it acquired the French premium skincare brand Galénic. Last November, the company filed for its IPO status in the US and raised over 600 million dollars.
Jing Take: This deal is just the latest in a line of Western brand acquisitions made by Chinese conglomerates. Recently, Sequoia Capital China acquired a controlling stake in AMI, LionRock (Clarks), and Fosun (Lanvin), just to name a few. While Western brands are finding their way into China, local brands have come out by slowly building their brands. Yet few have successfully tapped into luxury.
Wellness and self-care are two of the highest opportunity sectors today, and the global skincare market is predicted to jump to 463.5$ Billion by 2027. With this move, Yatsen’s international ambitions have become clearer (the significant funds raised during its public offering back up this vision.) Meanwhile, Yatsen has revealed that this money will go to its marketing, operations, strategic investments & acquisitions, product & technology development, and physical retail expansion beyond China — which means the company isn’t just eyeing the China market.
However, while C-cosmetics are finding wide popularity among Chinese consumers, skepticism around those skincare products persists. Chinese beauty brands do not have long-established laboratory backgrounds and lack exclusive formulas, making it harder for them to acquire luxury positioning. The acquisition of premium skincare brands from the West does not only help Yatsen secure a global distribution network; it also offers the brand access to top laboratories. As such, this deal is an unmissable chance for Yatsen to expand its product offerings around the world.
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.