HARMAY Talkings Raised $200 Million! Under the beauty economy, can the beauty track surrounded by capital give birth to the next "retail giant"?

Per reporter: Yao Yanan Tang Ruyu Per reporter: Xiao Ruidong

Recently, beauty new retail brand "HARMAY Talking Plum" announced the completion of nearly 200 million US dollars of Series C and D financing, with a luxurious lineup of investors, including General Atlantic (Transatlantic Investment Group), Hillhouse Capital, Black Ant Capital, Wuyue Capital and other institutions.

The new beauty collection store has gradually become a new consumption and social place for young people by creating a paradise-style shopping scene; following the "Perfect Diary" and "HuaXizi", the track has also become a new beauty highland for capital to chase, and there are many head institutions such as Jingwei China, Hillhouse Capital, IDG Capital, Tencent, and Shenzhen Venture Capital.

In this regard, some investors analyzed that for emerging beauty brands, when online traffic is gradually saturated, it is inevitable to go offline, and offline is also an important part of occupying the user's mind. So, in this track surrounded by giants, can the next "retail giant" be born?

The warehouse-type integrated beauty that has become popular under the "beauty economy"

It is reported that HARMAY has completed nearly 200 million US dollars of Series C and D financing, of which the D round of financing is led by QY Capital, Zhong Ding Capital, General Atlantic (Transatlantic Investment Group), Wuyue Capital, Ocean Link and the C round is led by General Atlantic, Zhong Ding Capital, Hillhouse Capital, Ocean Link, Wuyue Capital, and Black Ant Capital.

According to public information, HARMAY was founded in 2013 as a beauty retail integration brand, which first started online. In 2017, it landed its first offline store on Anfu Road in Shanghai, and then "went out of the circle" with its rich brand, product integration and immersive shopping scene, and was sought after by the current young consumer group. After receiving Hillhouse's investment in 2019, it began a rapid pace of expansion - stores have successively appeared in the core business districts of Beijing, Shenzhen, Hangzhou, Wuhan and other places.

It is reported that there are more than 400 makeup and skin care brands sold in the Jiemei store, and more than 9,000 SKUs, including various large-name boutiques and overseas niche brands. According to DAMIEN, founder of HARMAY, its single-month sales in Sanlitun reached 15 million at its peak.

In recent years, under the "beauty economy" and "lipstick economy", more and more investment institutions have begun to focus on the beauty track; after witnessing the success of "Perfect Diary" and "Huaxizi", capital has set its sights on the field of integrated retail, hoping to bring out the next retail giant here.

The "Daily Economic News" reporter noted that in the past two years, beauty retail integration companies that have received financing are not a minority. In addition to HARMAY, brands such as THE COLORIST Colorist, WOW COLOUR, AND HEAT Xiyan have also been financed, and most of them are Hillhouse, Shenzhen Venture Capital, Matrix Partners China, Tencent Investment and other institutions.

For the current popularity of integrated beauty stores, an investor in Beijing who has long been concerned about consumption told reporters that retail brands such as HARMAY and THE COLORIST colorists can become popular, mainly because they provide consumers with an "immersive experience in paradise". "There are hundreds of beauty brands and thousands of goods in a store at the same time, it can be said that consumers want all the brands, which has never been done before, and some people go in together for a few hours, it can be said that this is a space for consumption plus entertainment and social interaction, so the value of the scene is greater than the traditional retail model."

Long-term profitability is concerned, and the chain of offline shopping malls may run out of large companies

At the same time, behind the popularity of integrated beauty stores is the optimism of enterprises and capital in China's cosmetics market. According to iResearch data, the overall market size of cosmetics is expected to maintain a stable growth rate of about 10% after the epidemic is repaired, and it is expected to reach 600 billion yuan in 2023. With the transition of the new beauty collection store industry from the embryonic period to the stable development period, its market share is expected to increase to 15.8% in 2023, and the market size is expected to reach 13 billion yuan.

In fact, the rapid development of the current beauty collection store also benefits from the background of the revival of offline formats. Since 2021, many investors and entrepreneurs have expressed to reporters the changes they feel: online dividends are gradually decaying, traffic competition is becoming increasingly fierce and expensive, and offline formats are beginning to receive more attention.

Qian Kun, a partner at Wuyue Capital, who has invested in KK Group and HARMAY, has previously made a judgment in an interview with the media: the chain of offline shopping malls will produce large companies, while online is difficult. "Because online traffic is naturally concentrated and easily controlled by channels, channel controllers want to disperse traffic to more brands, so there is a clear ceiling for selling goods online." However, offline traffic, especially shopping center traffic, is relatively stable, unless the shopping mall is closed for decoration, the store at the door is always the best traffic, even if there is a problem in a single field, there are many fields to disperse the risk. As long as a certain scale is achieved, it will enter a virtuous circle, and the overall anti-risk ability will be strong. ”

Every reporter noted that at the same time of large-scale expansion, the long-term profitability of the new beauty collection store has also caused market discussions, with a personalized decoration style, novel shopping experience, beauty collection store can attract many consumers to punch in, but how to attract them to spend more, rather than visiting here? For another example, HARMAY Is most attractive to small sample goods, but the channels of small samples in the market are limited and the supply is unstable, and there is also uncertainty about how the subsequent collection stores can increase their overall gross profit margin through the combination of high and low gross profit products.

"For the collection store, there is nothing at the beginning, the product is the supplier's, the consumer is the shopping center, this is a multi-party game relationship, from which side to break through is what the enterprise needs to think." Qian Kun believes that first get the supplier, combine the good products, consumers buy a lot, and then go to the mall, after getting the mall, the sales scale of a large number of stores will rise sharply, and then win better business conditions from the supplier, which is a positive cycle process.

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