On December 20th, L Catterton, the world’s largest consumer-focused private equity firm under LVMH, announced the completion of an exclusive Series A+ investment in the Chinese baby skincare brand Hi!papa. This marks the third investment in the Chinese beauty industry by the private equity firm backed by French luxury conglomerate LVMH, within a year, and notably, its first investment in a baby skincare brand. China’s baby skincare market has seen rapid growth this year, with companies like Runben Biotech successfully going public. Recently, even Dior has launched a baby skincare line and baby perfumes. What are the similarities and differences between the baby skincare markets in China and those in Europe and the United States?
Recognizing the growth potential of the baby skincare market in China
Hi!papa is a well-known baby skincare brand established in 2019. Specializing in researching plant-based skincare effects for school-age children, the brand continuously innovates to create several industry-leading baby skincare products. It has won numerous industry awards both domestically and internationally, consistently ranking as the top brand across multiple categories on platforms such as Tmall and Douyin, earning recognition within the industry and trust among consumers. Hi!papa adheres to the brand philosophy of ‘Love Nature, Scientific Care,’ persistently utilizing technology as an engine to systematically build a comprehensive range of skincare products for children of all ages. It stands as a leading domestic baby skincare brand, offering a complete product matrix to fulfill the skincare needs of children across different age groups and pioneering in the category of domestic sunscreen lotions and facial cleansers.
Since its inception, Hi!papa has created a series of highly popular products, including ‘Little Snow Mountain Sunscreen Lotion,’ ‘Little Blue Jar Cream,’ and ‘Snowy Grass Facial Foam,’ which set it apart from traditional infant skincare brands. The brand has also developed a mature model for new product development and iterations. Leveraging profound consumer insights, Hi!papa strategically develops its products, gaining high recognition from parents due to its leading product efficacy and accumulating strong brand loyalty.
Moreover, Hi!papa has successfully transitioned from new products to bestsellers, from individual items to product categories, and from leading categories to leading the way in niche segments. The brand has expressed its commitment to continue utilizing technology as the driving force, expanding its product line comprehensively in the field of children’s anti-light damage, guided by its new strategy. This move aims to establish a strong foothold in the field of children’s photoprotection.
Founder Xu Yujiangsheng of Hi!papa mentioned that this round of funding will be allocated toward research and development, brand building, product enhancement, and channel expansion.
Chen Yue, Managing Partner of L Catterton Asia Fund, stated, “Through our in-depth consumer insights in the personal care sector, we see enormous growth potential in the domestic baby skincare market. Since its inception, Hi!papa has methodically focused on developing resonating products with consumers. Its strong product capabilities, efficacy, and high quality have established long-term customer loyalty.”
“Over the past year, the company has achieved significant growth in revenue and profits, and its diversified channel layout has secured a leading market share in untapped markets. We eagerly anticipate further collaboration with the company, providing global empowerment across products, channels, and brand marketing,” added Chen Yue.
Founder Xu Yujiangsheng of Hi!papa expressed, “We are not only favored by investors but also trusted by the industry and acknowledged by customers, which greatly encourages us. Hi!papa’s next focus will leverage its research strength to contribute to the industry and advance the process of Chinese baby skincare brands going global.”
Investing in Hi!papa marks L Catterton’s third investment in the Chinese beauty industry this year. The first investment was in the collagen recombinant material supplier Chuangjian Medical, followed by the investment in the base makeup brand Blankme. Investing in Hi!papa marks its first investment in a baby skincare brand.
New trends in baby skincare in China: emphasis on natural Ingredients
In 2022, the market size of infant and child care in China reached 36 billion yuan, projected to increase to 52.1 billion yuan by 2026. The category itself exhibits resilience and represents a relatively untapped market. Benefitting from trends such as increased penetration rates, age-specific product segmentation, and precise functional scenarios, the outlook for the children’s skincare market is expansive.
Amid the sustained fervor in the infant and child care sector, leading beauty enterprises in China are actively venturing into the children’s cosmetics business. This includes Shanghai Jahwa, which introduced the infant and childcare brand, “Giving” as early as 2013. Shanghai Jahwa has expressed that Giving is China’s first personal care brand nurturing newborns with the natural energy of newborns themselves.
Apart from Shanghai Jahwa, domestic sensitive skincare leader BTN has also actively entered the infant and child care sector, launching WINONA Baby. BTN mentions that WINONA Baby inherits the genetic essence of its parent brand “WINONA” based on children’s dermatology science and leveraging botanical extracts from the rich resources of Yunnan. It is dedicated to crafting professional skincare products of dermatological grade to protect the health of infants’ delicate skin.
Furthermore, another domestic beauty company, Chicmax, which debuted on the Hong Kong Stock Exchange at the end of last year, introduced the Baby Elephant infant and child care brand back in 2015. Besides the Baby elephant, in May 2022, Chicmax also unveiled a new skincare line called “Newpage,” focusing on addressing sensitive skin issues in children.
China’s leading hyaluronic acid enterprise, Bloomage Biotech, launched the BLOOMCARE brand of mother and baby hyaluronic acid functional care products. The brand upholds the philosophy of “caring for baby skin, starting from the pregnancy period,” dedicated to tailoring care solutions for expectant mothers and the skin health of infants and toddlers.
With the rise of emerging brands and the strategic expansion of major Chinese beauty brands, the Chinese infant and childcare market exhibits two predominant trends.
Firstly, there’s a greater emphasis on using natural, organic, and active ingredients in raw materials, prioritizing product safety.
For instance, Shanghai Jahwa’s infant and child care brand Giving prioritizes the innovative fusion of natural plant ingredients and skincare technology. Its core concept revolves around “extracted from nature, nurturing life’s inception.”
Giving’s emphasis lies in plant extraction technology as its central focus. The latest Babycare Collection, titled “New Essence of Naturals,” employs a unique “live ∙ burgeon extraction technique” to effectively preserve the innate vitality of primary plants. Within the Newborn Soothing Relief Collection, they utilize the Innovative NaturalSafe + Technology to support the maintenance of a healthy skin barrier, strengthening the baby’s skin resilience and durability. The Newborn Extra-safe Collection specifically curates pure and uncontaminated plant burgeons as its highlighted ingredients.
BTN’s WINONA Baby leverages botanical extracts from Yunnan’s rich resources. Its primary ingredients include extracts from blue spurge, purslane, and avocado.
Additionally, Chicmax’s core product in the Baby Elephant range is the Reassuring and Simple Care series, particularly the 90 Reassuring Cream. The core formula uses naturally organic-certified red myrrh alcohol from Brazil. Bloomage Biotech’s infant and child care brand, BLOOMCARE incorporates active biological ingredients such as probiotic VB families, patented hyaluronic acid, and Ectoin, ensuring the safety of its products.
Domestic children’s care products in China strongly emphasize natural plant-derived ingredients, avoiding direct competition on ingredient selling points with other international functional skincare brands.
The second trend in infant and childcare products in China involves a more refined segmentation of product scenes and functions.
With economic development and an increase in education levels, the child-rearing perspectives of the new generation of young parents are evolving. They prioritize meticulous parenting practices and are embracing the concept of “staged care” in products. The popularity of this concept has led to a more detailed segmentation of product scenes and functions, catering to the specific needs of infants and toddlers at various stages.
Emerging brands are particularly sensitive to this trend towards segmentation in categories and functionalities. For instance, the Baby Elephant brand focuses on providing special care for newborns and babies with sensitive skin, considering differentiation in product design. They even refine products based on multiple dimensions such as seasons and ages to meet the needs of infants at different stages and with specific requirements.
The Hi!papa brand segments the skincare products according to the pain points and skincare scenarios for users of all age groups. Especially in the sunscreen category, they’ve achieved refined product efficacy segmentation. Hi!papa offers several series of products catering to different skin types and special needs, including the photosensitive skin series, the red-sensitive skin series, the oil-sensitive skin series, the sensitive skin series, and the fun dry-sensitive skin series.
Among the listed beauty enterprises, Giving under Shanghai Jahwa, though focusing on infants and toddlers aged 0-3, divides its brand into eight categories, including body wash, special care creams, moisturizing lotions, and creams. WINONA Baby’s products are categorized into professional, infant, and child lines, catering to different consumer needs.
As consumers continuously elevate their demands for product usage and scenarios, major infant and childcare brands are actively conducting in-depth category segmentation, transitioning from individual products to broader categories. They are dedicated to achieving precision and diversity in categories to meet the diverse needs of consumers.
The trend of baby perfumes is emerging in the European and American markets
