Sequoia Capital Touted Local Cosmetics Brand "Foreign Brand" Growth Slowed Down

From the latest financial data released by L'OREAL, Unilever and Procter & Gamble, we can see that the domestic cosmetics market " Foreign brands The growth rate slowed down collectively. With the growth of daily chemical giants, a number of local daily chemical enterprises have sprung up, and have been frequently touted by the capital market.

A cosmetics company executive in Southern China said to the first Financial Daily reporters that the support for domestic products is getting louder and louder, and the daily development of foreign capital in China is facing more and more challenges and other factors, making the local cosmetic brand favored by the capital market.

Venture capital enters frequently

In 2007, today's capital investment is suitable for 80 million yuan of Materia Medica, and the proportion is 35.07%.

In July 2013, LVMH The group's private equity fund L Capital Asia has reached a strategic cooperation agreement with the local cosmetics company, Guangdong beauty beauty biotechnology Limited by Share Ltd (hereinafter referred to as "pill beauty"), and the two sides have reached cooperation in eight aspects of product development, investment and mergers and acquisitions. According to Sun Huaiqing CEO, L Capital Asia has an investment amount of 9 figures, and is the second largest shareholder of pill beauty.

In the same year, Sequoia Capital took the lead in capital injection in Yunnan. Cosmetics brand WINONA (Winona), this is the first time that Sequoia Capital Invested in the local daily chemical brand.

In September 2014, Jun Lian capital of Lenovo invested hundreds of millions of yuan into Guangzhou Wei Mei Zi personal care products Co., Ltd. (hereinafter referred to as "Wei Mei Zi").

Feng Jianjun, a senior expert in the daily chemical industry, told the first financial daily that the four main points for venture capital to choose cosmetic enterprises are: enterprise scale, operating profit, growth space and management team. It can be seen that venture capital frequently matches the local cosmetic brand, which indirectly indicates the recognition of the current operation status of local cosmetics companies and the good prospects for the future.

In November 28, 2014, ten Changsheng Group Holdings Limited held a formal signing ceremony with Sequoia Capital.

"We introduced venture capital to bring Korea into a more internationalized and more standardized way." Ten Xiao Rongshen, director and vice president of Changsheng Group (Holdings) Limited, said that Sequoia Capital has the advantage of Korea's value, for example, financial and human resources are very standard, which can promote more rapid development of South Korea.

Insiders said that the structure of many cosmetics companies in China is not standard enough, and the entry of capital is needed to help standardize. After entering capital, the development of Korea will be more clear in the future, so that the team will be more confident, and it will be beneficial to attracting talents and retaining talents.

The rise of local brands

Shen Napeng, founder and executive partner of Sequoia Capital China fund, said that in the next 5~10 years, local cosmetics brands in the domestic cosmetics market are expected to gradually replace foreign brands, and there are plenty of opportunities for local cosmetic brands to develop. This is one of the important reasons for Sequoia Capital's investment in Korea.

Wang Cen, managing director of Sequoia Capital China fund, stressed that if the development trend is good, next year and the year after next will open a new round of capital injection to South Korea.

Ten Wang Guoan, chairman of Changsheng Group (Holdings) Co., Ltd. also believes that the next 3~5 years will be the period when the local cosmetics brands are rising in a collective way. There will be Haier, GREE style large local cosmetics brands. There will also be enterprises with a single brand of 3 billion ~40 billion yuan, and the local cosmetics enterprises will develop the enterprises that have many comprehensive brands like Procter & Gamble.

Feng Jianjun told the first Financial Daily reporters that the local brands of skin care and makeup industry have the possibility of more than foreign brands, while the possibility of washing and daily necessities is unlikely. "Apart from 100 stores, the brand of local skin care in other channels may exceed foreign brands."

Compared with local brands, AVON, Procter & Gamble, Unilever and other foreign chemical companies are suffering from a series of problems, such as declining performance and global layoffs.

In the first half of this year, L'OREAL reported sales revenue of 11 billion 170 million euros, down 1.5% from the same period last year, including net profit of 17.4 billion euros and net profit growth of 0.05%. The Asia Pacific market revenue in the first half of this year decreased by 0.8%; P & G announced the fourth quarter June 30, 2014 financial results showed that its net sales decreased by 1% to 20 billion 160 million US dollars; while the other giant Unilever's performance in the third quarter of this year "obviously" slowed down, while the sales growth in the quarter was only 2.1%, and the market failed to meet the market expectations. In addition, this year, foreign cosmetics brand Garnier and Revlon made the decision to withdraw from the mainland market.

Many cosmetics industry practitioners told this newspaper that compared with foreign brands, local cosmetics companies know more about China's mass cosmetics market. And when these venture capital enters, it can make up for the shortcomings of local cosmetic brands in R & D, brand management and so on.