China Beauty Brand Agency Lalami Submits a Prospectus to the Shenzhen Stock Exchange

Consumer Staples Author: Yifei Liu Editor: Hu Bi Jul 07, 2022 02:35 PM (GMT+8)

The niche beauty brand agency operator may become the industry's mainstream.

Cosmetics

Beauty brand operator Lalami officially submitted a prospectus to the Shenzhen Stock Exchange to raise CNY 578 million (USD 86.2 million) on July 7. Among the proceeds, CNY 380 million will be invested in brand incubation and operation promotion projects.

According to the prospectus, Lalami's total revenue was CNY 840 million in 2021, up 7.25% year-on-year, of which the revenue for the top five brands reached CNY 755 million, accounting for 89.84%.

Lalami's brand matrix is still expanding, with the number of partner brands expanding to 28 in 2021, and the company is working with brands worldwide, including Japan, Spain, France, the United States, etc. 

Between 2019 and 2021, Vipshop (Chinese: 唯品会) was Lalami's number one customer. The company's sales revenue to Vipshop in 2021 reached CNY 104 million, representing 12.34%.

Lalami's main profit point is focused on overseas niche brands. From the beauty market pattern perspective, the main market is occupied by the major international brands. Thus the space for overseas niche brands is restricted, directly affecting the agents serving them.

The 618 event shows that although the cosmetic industry has seen negative growth since this year, the competition among beauty brands is still intensifying. Lalami needs to break through the market restrictions and enhance its competitiveness, and it is inevitable to go to the capital market for help at this time.

According to the scale of business, Lalami is currently a medium-sized business in the industry, and its competitors include Kaytune (Chinese: 凯淳股份, 301001:SZ) and Qing Mu (Chinese: 青木股份, 301110:SZ).