It's an interesting time for the beauty market in China: As digital research firm L2 recently reported, international beauty juggernauts are having trouble growing in China due to increasing competition from local brands.
Revlon recently pulled out of the country entirely, shortly after its competitor, L'Oreal, pulled its skin care and beauty brand Garnier out of the market, choosing instead to just focus on mass market makeup brands Maybelline and L'Oreal Paris. Little did we know, L'Oreal was making a Chinese beauty investment elsewhere.
The company announced Tuesday that it had acquired Magic Holdings, a Chinese company that focuses on facial masks (those wet paper ones that you leave on and then peel off). Jean-Paul Agon, chairman and CEO of L'Oreal, called the deal "the most important acquisition for L’Oréal since the acquisition of Yves Saint Laurent Beauté in 2008," and said it "marks the acceleration of our conquest of new consumers in China."
Apparently, these facial masks are one the fastest-growing categories in China's beauty market and Magic Holdings's MG Brand is a top brand for them.
We guess it's sort of an "If you can't beat 'em, join 'em" move on the part of L'Oreal, and we wonder if other international beauty brands won't follow suit by investing in brands that are already successful in this market that they're having trouble breaking into themselves.