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S’Young International, a new Chinese cosmetic giant?

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In the past, S’Young Group was more driven by the dual business of operating self-owned brands and helping foreign brands to better distribute in China”, says Juliette Duveau, the co-founder of consulting company The Chinese language Pulse. However the group based in 2018 is now not content material with its function of distribution accomplice in China. Final 12 months, S’Younger bought French manufacturers Pier Augé and EviDenS de Beauté.

“We can foresee that S’Young will integrate the international channels and R&D techniques of these two French brands, paving the way to the international market for its other self-owned brands in the future”, she provides.

These fairness acquisitions of overseas manufacturers additionally contribute to upgrading the group’s picture, from Center-Low finish to extra high-end. S’Younger’s personal manufacturers – corresponding to Yunifang (御泥坊), which has over 10M followers on Tmall – primarily goal the Chinese language mass market with an enormous buyer base, particularly in decrease tier cities. By means of the acquisition of overseas manufacturers, the Group may attain extra prosperous prospects in increased tier cities and would possibly develop higher-end merchandise to go world.

Delicate skins and area of interest manufacturers

Final 12 months, S’Younger additionally acquired the Chinese language model Dermdoc (戴摩道克) specialised in pores and skin restore from the group Hangzhou Songyang. Analysts famous it made S’Younger enter the territory of Winona (薇诺娜), Chinese language group Bethany’s model positioned on delicate pores and skin remedy, which ranked within the High 10 of nationwide manufacturers on the current June purchasing pageant on a number of e-commerce platforms.

Since 2017, the growth rate of China’s sensitive skincare market has been higher than the overall skincare market’s, and it has strengthened, especially after the epidemic”, observes Juliette Duveau.

In response to the 2022 Chinese language Delicate Pores and skin Market Development report, issued by Taobao and T-mall, round 45% of the Chinese language inhabitants have a delicate pores and skin, and most of them are girls of their twenties residing in tier 2 and tier 3 cities. On this subject, shoppers primarily count on merchandise targeted on pores and skin barrier enhancement, pores and skin redness restore, and anti-inflammation.

S’Younger additionally introduces itself because the pioneer of the “CP (Chinese Partner) model”, which consists in serving to world manufacturers develop and adapt to the Chinese language market, by offering a complete resolution for the model, product adaptation, gross sales, and distribution networks (on-line and offline).

This method is totally different from the “Tmall partner model” provided by the Chinese language platform to world manufacturers used to cross-border commerce with China. “While the Tmall partner model only focuses on the digital ecosystem of its own group, S’Young can provide diversified online and offline sales channels (shopping malls, select shops)”, explains Juliette Duveau. Final 12 months, the group really opened a bodily retailer known as Shuiyangtang (水羊堂, “the temple of S’Young”) in Changsha, to supply all its manufacturers and its companions’ on a 300-m2 space.

Given the manufacturers that belief S’Younger with the CP mannequin (Kiko Milano, Fenty Magnificence, Liérac…), the group has positioned itself on a somewhat premium area of interest section. “Niche brands hold a relatively small share of the market and have a relatively low awareness compared to established brands. Competition on China’s beauty market is very fierce. But as Chinese consumers become more sophisticated and pursue personality expression, niche brands with sharp brand identities and values ushered in their opportunities. The continued popularity of niche brands challenges the established or mainstream beauty brands who tend to re-examine their brand image to better meet the needs of the young generation.

Nonetheless, S’Younger’s many initiatives have not acquired a lot reward from the Chinese language monetary press, which factors on the group’s declining profitability (it’s listed on the Shenzhen Inventory Alternate) and the necessity to discover progress drivers on the now extremely aggressive Chinese language market. “For now, the group will remain focused on the Chinese market”, says Juliette Duveau. “There is still a long way to go before it actually goes global”.

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