The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
The up-and-coming Beijing-based beauty retailer has secured $200 million in recent Series C and D rounds of funding, led by QY Capital and General Allantic, BoF has learned.
Harmay started life almost a decade ago as a well-curated online beauty store on Alibaba’s Taobao platform, but it has grown to become a rival to Sephora in the China market in recent years due to its unique aesthetic approach and niche brand offering.
It currently has nine physical stores in its network and plans to expand to Wuhan, Shenzhen and Guangzhou this year. Harmay also acquired American makeup brand Kevyn Aucoin from Manzanita Capital last November.
According to data from market research provider Euromonitor International, China’s beauty market (the combined value of its colour cosmetics and skincare markets) was worth $51 billion in 2020, with a constant annual growth rate (CAGR) of 11.18 percent expected through to 2025, when its total value will reach $86.7 billion.
Multibrand offline beauty retailing has become an intense battlefield in recent years, and investment has poured into the sector. KK Group, the parent company of Harmay’s primary peer and rival, Colorist, raised approximately $1.8 billion in 2021, while another player, Wow Colour, raised 500 million yuan ($78.81 million) over the same period.
Learn more:
Sephora’s China Rivals Ready for Battle
After 16 years in Mainland China, LVMH’s Sephora faces serious competition as local multi-brand players jostle for a larger slice of the country’s $51 billion beauty market.
Beijing’s Covid-19 policy shift will give the sector a boost in 2023 but a surge in infections and sluggish economic growth could dampen the recovery after an uplift from Chinese New Year.
This week, China rolled back some strict zero-Covid measures, opening a road to recovery for luxury and retail. But the journey is likely to be long and bumpy, experts warn.
Despite disappointing Singles Day sales results, harsh Zero Covid restrictions and supply chain woes, international beauty conglomerates continue to see China as a growth engine.
Disappointing sales were only part of the story, as brands increasingly used the world’s biggest online shopping festival as a marketing moment.