May beat Sephora, just around the corner?

Reporter | Zhou Fangying

Edit | Lou Shuqin

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According to the news of Gao Hu Capital, beauty new retail brand HARMAY Jiemei recently announced that it has completed nearly $200 million in Series C and Series D financing.

Among them, the D round of financing was led by QY Capital, General Atlantic (Transatlantic Investment Group), Zhong Ding Capital, Wuyue Capital, Ocean Link Ouling Investment and investment; the C round of financing was led by General Atlantic, Hillhouse Capital, Ocean Link Ouling Investment, Wuyue Capital, Zhong Ding Capital, Black Ant Capital, and Gao Hu Capital served as the exclusive financial advisor for two consecutive rounds of financing.

According to tianyancha information, since Hillhouse Capital led the A round of financing in 2019, Jiemei has completed four rounds of financing so far.

The first to start from the online Taobao store, Jiemei opened its first offline store in Anfu Road, Shanghai in 2017, and has since expanded with its iconic warehousing style stores. Up to now, Nemei has opened nine stores in Shanghai, Beijing, Chengdu, Hangzhou and other first-tier and new first-tier cities. Among them, Shanghai and Beijing have two stores and offices respectively.

From the emphasis on artistic beauty in decoration style, to the inclusion of beauty brands at home and abroad, as well as the business model without beauty shopping guides, Yuemei has become a "city landmark" to a certain extent. This also sets this apart from traditional sales-oriented beauty collection stores.

The 2022 beauty category innovation research report "Beauty New Product Opportunities Driven by The Mental Changes of Generation Z" released by Rees Strategic Positioning Consulting also pointed out that offline beauty collection stores currently present a binary pattern, and the market share of beauty collection stores occupied by the veteran head brands Watsons and Sephora reached 81.3%.

However, compared with the traditional brands of "big and complete" products such as Watsons and Sephora, new collection stores such as latecomers THE COLORIST colorist and WOW COLOR have further differentiated the market by focusing more on makeup and overseas niche brands.

Rees believes that in China's 500 billion-dollar beauty market, the problem of low specialization of traditional "grocery store" beauty collection stores is increasingly exposed, such as over-promotion and unclear product introduction. As a result, new beauty collection stores with a more focused product line are easy to establish more professional and clear brand recognition on the consumer side, and this is also an opportunity for new brands.

Since the beginning of 2020, many new beauty collection stores have entered the public eye through the news of financing, and further expanded with the help of the power of capital, such as HAYDON black hole, H.E.A.T. and so on.

It is worth noting that these new brands have similarities in both decoration style and operation model, that is, trying to attract the attention of local consumers through the "net red punch card" store atmosphere and the diversion of big brands. However, this freshness will undoubtedly decline as the number of competitors with homogeneous styles increases and the expansion of its own stores.

It can be seen that at this stage, Meimei is trying to form differentiated characteristics by expanding new formats. For example, The new flagship store on Wukang Road also sells coffee and lemon tea, and there is an open rest area on the first floor for passing residents and tourists to rest their feet. In addition to the hand-played lemon tea shop, Yumei will also launch a bakery brand in the future.

Image source: HARMAY

Zhong Taipeng, co-founder and chief operating officer of Yuemei, also said in an interview with Interface Fashion that the selection strategy is one of its core advantages that distinguish it from competitors.

At present, 50% of the SKUs in Theme offline stores are overseas niche beauty brands. Nemei has introduced a series of overseas niche brands through exclusive agency and capital operation, aiming to enhance brand differentiation and improve store repurchase rate.

Recently, Baum, a high-end skincare brand under the Shiseido Group, also chose Yuemei as the first channel for the Chinese market. According to 36Kr, in the past year, Renmei has also reached cooperation with a number of new brands under L'Oréal, becoming one of the officially authorized sales channels. This also paves the way for the cooperation between ZME and L'Oréal's main brand.

In addition, in addition to the identity of the channel provider, The Mei has also begun to invest in niche brands. Interface Fashion has reported that at the end of 2021, Jiemei acquired kevyn Aucoin, the eponymous brand founded by professional makeup artists in Hollywood, USA. Previously, Yuemei also invested in the French natural plant skin care brand Vine de Pastel, and the domestic skin care brand PMPM.

Compared with THE COLORIST colorist and WOW COLOR, whose number of stores has reached hundreds, Yuemei is obviously more inclined to cultivate and pay attention to the investment layout of the brand in the store opening model. However, when there are no head brands like Watsons and Sephora in the new beauty collection stores, it is still unknown whether the unhurried Andme can establish brand recognition through the layout of a small number of urban flagship stores and outperform similar brands.