Recently, CHAILEEDO learned that there has been a change in the business information of Shanghai Forest Cabin Biotechnology Co., Ltd. (referred to as “Forest Cabin Company”), with the addition of shareholder Youngor (Shanghai) Technology Co., Ltd. (referred to as “Youngor”).
It is worth mentioning that this is not Youngor’s first investment in the beauty industry. As early as 2020, Youngor invested in the US beauty stock through its wholly-owned subsidiary, Youngor Investment Co., Ltd.
As a leader in the Chinese apparel industry, Youngor’s companies have invested in top Chinese beauty enterprises twice in recent years, demonstrating their confidence in the growth of Chinese beauty brands. This also reflects that the thriving Chinese beauty industry is attracting more and more cross-border players to enter the market.
Following the investment in CHICMAX, Youngor invests in Forest Cabin
According to the National Enterprise Credit Information Publicity System, Forest Cabin Company underwent a change in business information on August 6 this year, with the addition of Youngor as a shareholder.
As disclosed in public information on QiChaCha, Youngor obtained a 4.491% stake in Forest Cabin Company by subscribing to a capital injection of 1.12 million yuan. Simultaneously, the shareholding percentage of A-round investor Hai Na Hua (Shanghai) Equity Investment Fund Partnership Enterprise (Limited Partnership) (referred to as “Hai Na Hua”) decreased by 4.491%, and the subscribed capital changed from the previous 1.25 million yuan to 118,500 yuan.
It is worth noting that CHAILEEDO discovered through the National Enterprise Credit Information Publicity System that the subscribed capital payment date for the aforementioned 1.12 million yuan from Youngor is listed as December 21, 2021. So, what’s the story behind this?
In response to this, Shen Meng, Executive Director of Xiang Song Capital, told CHAILEEDO that according to the operating rules of the business registration system, the system only records the initial information of the company. Unless the company submits a change request, the business department will not proactively update subsequent change information.
He further pointed out, “Through the business information change, it can be seen that Youngor’s registered capital has not changed during the same period, and in the changes in the equity ratio between Youngor and Hai Na Hua, the increased and decreased values of their shares correspond, indicating that Hai Na Hua has transferred its 4.491% stake in Forest Cabin Company to Youngor.”
Regarding the news of Youngor’s investment, CHAILEEDO immediately contacted Forest Cabin Company for verification, but as of the time of publication, no response has been received.
In fact, this is not Youngor’s first foray into the beauty industry. As early as November 2020, Youngor, through its wholly-owned subsidiary Youngor Investment Co., Ltd., jointly invested 500 million yuan with Xuri Zijin, Baiyin Investment, and other investors to acquire shares in US Beauty. Two years later, on December 22, 2022, US Beauty successfully listed on the Hong Kong Stock Exchange, proving Youngor’s keen investment vision.
Youngor itself has a significant background. It is understood that Youngor, a fashion technology company, was established with an investment of 2.8 billion yuan by its parent company, the A-share clothing listed company, Youngor Co., Ltd., in 2021. The company’s main business direction is to invest in the fashion industry ecosystem, with a wide range of investments including skiing, sailing, golf, cycling, and other fashion and sports leisure fields.
When it comes to Youngor, although clothing is its main business, in reality, Youngor’s recent gains in investment business have far exceeded its clothing business. According to public reports, in recent years, Youngor’s profits from investments have reached as high as 40 billion yuan, earning it the nickname “Buffett of the clothing industry.”
Youngor bets on the high-end skincare track of “Oil Skincare”?
So, why did Youngor once again invest in the Chinese beauty industry and choose Forest Cabin Company?
First of all, as a leader in the Chinese high-end skincare brand market, Forest Cabin has opened up a new track with its camellia oil essence. It is understood that as early as 2003, the founder of Forest Cabin, Sun Laichun, established the Forest Cabin brand, which is a pioneer in the Chinese domestic high-end skincare brand field of “oil skincare”, using camellia as the core ingredient and creating the brand’s classic work – the Camellia Repair Essence Oil. Reports claim that Forest Cabin’s camellia oil essence has developed to the fourth generation, with a cumulative production and sales exceeding 20 million bottles to date.
In February of this year, the Forest Cabin brand was awarded the “National Sales Champion of Essence Oil for Ten Consecutive Years” certification by the well-known authoritative consulting firm CIC Insight. Furthermore, on June 25th this year, Frost & Sullivan awarded Forest Cabin the status of “Pioneer of Facial Essence Oil in China” based on their research into the Chinese facial essence oil market. This undoubtedly reflects the strong influence of the Forest Cabin brand in this niche market.
On the other hand, despite the overall soft performance of the cosmetics retail market, Forest Cabin has still delivered a good performance. According to public reports, in the first quarter of this year, Forest Cabin’s overall channel performance increased by over 50% year-on-year. In the online channel, it is noted that Forest Cabin’s official flagship store on Tmall currently has a high number of followers, with 7.45 million followers, offering 179 products ranging in price from 54 to 2260 yuan, including masks, creams, hand creams, facial cleansers, and essence oils. Among these, the best-selling set is the essence oil and multi-peptide face cream priced at 99 yuan, with over 60,000 sold.
In addition to the Tmall platform, the Forest Cabin brand has also achieved impressive results on the Douyin platform. As of the time of writing, Forest Cabin’s Douyin flagship store has 595,000 followers, with total sales reaching 1.607 million. The highest-selling product is the essence oil gift box priced at 799 yuan, with sales of 211,000 units, while the Red Camellia Set priced at 547 yuan also has decent sales, selling 40,000 units. Additionally, the Forest Cabin brand places high importance on expanding its offline presence. After 15 years of operating its own stores, in 2023, Forest Cabin began offering franchise opportunities, adopting a strategy of “direct operation + cooperation + franchise”. According to public reports, the total number of physical stores under the Forest Cabin brand has now reached close to 500.
From this, it is evident that Forest Cabin Company’s ability to attract investment from Youngor is not accidental. By investing in the Forest Cabin brand to explore the growth potential of the Chinese essence oil care market, it is clear that this can play a complementary role in Youngor’s own beauty industry layout. With the support of a powerhouse like Youngor, it not only proves the comprehensive strength and market value of the Forest Cabin brand but also lays a solid foundation for its future growth and expansion.
Niche, distinctive brands are becoming “hot cakes”
In recent years, with the rapid development of the Chinese cosmetics industry, many domestic Chinese beauty brands have gradually emerged, especially niche and distinctive brands in various subfields that have attracted the attention of the capital market, becoming hotspots for investment.
According to incomplete statistics from CHAILEEDO, in the first half of this year, there were a total of 24 financings in the cosmetics industry involving brands, raw materials, retail, and testing, representing a 41% increase compared to the first half of 2023 which had 17 cases. Among these, brand financing accounted for 14 cases, particularly favored by investors.
Among the brands that received funding, skincare brands had the largest share. For example, earlier this year, the tech skincare brand KEY iN obtained tens of millions of yuan in funding from brand management company Ruoyuchen, who had previously invested millions in it.
Regarding the cooperation with KEY iN, Ruoyuchen’s Strategic Investment Manager Luo Yu told the media that KEY iN’s uniqueness lies in its pioneering concept in skincare base layer research and development. Based on human-sourced collagen, they break through the ingredient penetration ceiling with supramolecular technology, continuously iterating consumer insights in research, product, and brand aspects. Its product strength and technological barriers are rare in the market, and it is expected to become a rising star.
Additionally, in February of this year, BPCXTRA, which focuses on the “bionic medical beauty” skincare concept, completed its angel round of financing with investment from Midu Capital. Public information shows that BPCXTRA, established in 2021, is a medical beauty product research and production company dedicated to helping Chinese women retain their youthful appearance. The products are categorized into Wish Series, Youth Series, Beauty Salon Line, and Functional Beverages, offering exclusive bionic medical beauty products for Chinese women.
Apart from skincare brands, investment interest in niche perfume brands remains high. For instance, L’Oréal Group announced a minority equity investment in the Chinese local perfume brand To Summer, marking L’Oréal Group’s first investment in China in 2024. This is also the first time in over 60 years since its listing in 1963 that L’Oréal Group publicly announced a minority equity investment event in its annual report. L’Oréal Group’s Chief Global Growth Officer Fabrice Megarbané stated, “The investment in To Summer is one of the most important investments for L’Oréal Group in the North Asian market in 2023.”
Moreover, this year, the local perfume brand DOCUMENTS also completed a new round of financing, with luxury beauty brand group USHOPAL leading the investment, marking the latter’s first equity investment in a Chinese local brand. USHOPAL believes that this move aims to reaffirm the important position of Chinese brands in USHOPAL’s business layout and demonstrates the significant strategic deployment of Chinese beauty brands in USHOPAL’s future investments.
Overall, emerging Chinese brands that accurately capture the demands of niche markets in China have become favored by the capital market. With the capital intervention of foreign top-tier companies in China, Chinese beauty brands will usher in a new development period and enter a broader and more mature stage of market competition.
