In the past month, the C-beauty (Chinese beauty brands) sector has witnessed a flurry of financing activities:
COLORKEY's parent company Meishang Corporation completed nearly 200 million yuan ($28.6 million) - A round financing
Perfect Diary raised $100 million in a new round of funding;
House of cards obtained 20 million yuan ($2.86 million) - pre-A round financing.
Who are they?
| Brands | Founded | Product portfolio | Performance |
| COLORKEY | 2018 | Makeup (eye shadow, lipstick...) | Became one of the Top5 domestic makeup brands half a year after its opening in Tmall; Winning the No.1 in the lip glaze category in 2019 on Tmall during the 11/11 Singles' Day Shopping Festival. |
| Perfect Diary | 2017 | Makeup (eye shadow, lipstick...) | The first domestic brand to clinch the NO.1 in the makeup category on Tmall uring the 11/11 Singles' Day Shopping Festival. |
| House of cards | 2019 | Makeup (eye shadow, lipstick...) | Obtaining financing within less than a month of the launch of its products. |
Perfect Diary is regarded as the flag bearer for C-beauty. The brand is only three years old and has just completed financing last September. Its value doubled to $2 billion [1].
Perfect Diary Financing Trajectory
| No. | Date of disclosure | Transaction amount | Financing rounds | Estimated value | Investors |
| 1 | 2020-04-02 | $100 million | Strategic financing | $2 billion | Tiger Global Management HOPU Boyu Capital |
| 2 | 2019-09-11 | Undisclosed | Strategic financing | $1 billion | Hillhouse Capital Sequoia Capital CMC Capital |
| 3 | 2018-05-10 | Undisclosed | A round | $100 million | Gaorong Capital |
| 4 | 2016-12-30 | Undisclosed | Angle round | - | ZhenFund HONY CAPITAL |
Source: TianYanCha.com
Last week, Perfect Diary introduced its brand new logo on the occasion of its third anniversary. It also revealed its bigger vision to build itself into an internationally influential C-beauty brand.
What have they done in the last month?
Perfect Diary launched its co-branded DOG-themed eye shadow palette using the image of the pet dog of China’s top makeup KOL Li Jiaqi. The product has monthly sales exceeding 150,000 units on Perfect Diary’s Tmall flagship store.
COLORKEY launched Mulan-themed limited makeup collection, including lip glaze, eye shadow, and makeup fixer spray, etc. Among them, the airy lip series has sold more than 600,000 pieces in its Tmall flagship store.
House of cards launched “thirteen orphans makeup collections," including more than 20 SKUs spanning from lipstick and eye shadow to solid perfume. All products are designed with elements of chicken feet or dice, which are inspired by Chinese mahjong.
C-beauty is on the rise
C-beauty has been trying to shake association with cheap, generic and low-quality products. Over the last three years, we have seen consumers increasingly gravitate towards domestic brands. In May 2019, Tencent released the "Insight on Domestic Beauty & Makeup Products," which showed that C-beauty brands occupy a 56% market share in China's beauty industry. 42% of consumers are willing to choose Chinese domestic beauty makeup brands, and 90% of consumers said that they would buy C-beauty products again in the future.
There are many reasons for the increasing popularity of C-beauty among consumers. The most important reason is the hyperlocalized marketing and retail strategies adopted by Chinese enterprises. As the “China Chic” concept gains traction across the country, domestic brands are integrating Chinese traditional cultural genes with fashionable trends to create differentiated product portfolios. Meanwhile, Chinese consumers have a newfound sense of pride and identity in their Chinese culture. Chinese-style elements are driving the booming C-beauty industry. At present, more than 70% of online cosmetics consumption is driven by millennials and generation Z is becoming the emerging force of the beauty makeup consumption [2]. With shorter product development and launch cycles, and a better understanding of Chinese consumers, emerging C-beauty brands may become the biggest rivals of major multinationals operating in China.
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