GoLong, ‘China’s Next Estée Lauder,’ Nabs Tens of Millions of Dollars
After receiving significant money in its Series B round of funding, the Hangzhou-based company has found itself well-armed to compete against global cosmetics giants in the Chinese market and beyond.
Beauty brand asset management company, GoLong (高浪), completed a Series B financing led by C Ventures (C资本) in recent days, raising tens of millions of dollars. Langchao capital served as the exclusive financial consultant of the deal.
In 2018, GoLong received RMB 200 million in its Series A financing, led by Midas Capital (琢石资本). The funds raised this time will apparently be used to expand the global beauty market. Adrian Cheng (郑志刚), the founder of C Ventures, said the primary reason to invest in the firm is that both parties have the same objective of focusing on brands that target Generation Y and of concentrating on developing online sales.
With its Series B funding, C Capital will support GoLong in accelerating its online market share and acquiring more overseas brands to bring more choices to the younger generation of consumers. Through its strong market channels, C Capital will also help the company in perfecting its brand matrix so that it can truly develop into an Asian leader in the international beauty industry.
Established in 2012, GoLong is a business incubator that focuses on introducing new overseas brands with great potential to the Chinese market. Now it has four major segments: brand incubation, market planning, global channel management and asset optimization. Through content marketing and omnichannel sales channels, the firm helps brands to get started and to reach their full potential.
Beauty e-commerce has witnessed rapid development in recent years. Nowadays, beauty product consumers are acquiring a wide variety of relevant information on a daily basis, and the marketing system is becoming more fragmented at the same time. Users have more diversified options when making their consumption decisions.
Besides, with the popularity of skincare knowledge, they started to form deeper insights into the practical value of products, a benefit which may gradually exceed the added value of the brand.
“The current marketing relationship has become complicated. The brand and its users are being deeply associated and combined,” said Gao Lang (高浪), the founder and CEO of the company, in an interview (in Chinese) with Jumeili.cn (聚美丽).
Gao Lang further explained that brands will be more differentiated in the future – one type being more high-end, and the other targeting practical side that focus on building a tight relationship with users.
The former must survive their life cycle to allow the cognitive generation of a certain group of users, which requires a lot of resources and time to achieve. The latter, meanwhile, pays more attention to value-for-money practices and user relationship construction. This kind of brand develops their products based on customer's demands, then grab market share rapidly by distribution through a user network.
The above logic has strictly shaped GoLong’s brand asset management strategy: to find fast-growing brands with certain historical endorsements, capabilities in research and development and supply chain management, and to integrate them into their multi-brand matrix and their user networks.
At present, GoLong is co-operating with more than 50 brands, most of which come from Europe and North America.
Among these, the South Korean brand SNP, which was incubated by the company, has already become one of the top three in China’s imported beauty facial skincare market, and completed an IPO. Introduced in 2017, the Spanish brand Sesderma and the Japanese brand Bb laboratories are now having an annual Gross Merchandise Volume (GMV) that exceeds hundreds of millions of yuan.
China’s cosmetics industry is now occupied with both opportunities and challenges. According to CICC’s report, people from low-tier cities, especially females, have started to care more about their personal appearance, which contributes to huge margins and expanding potential in the market.
The rise in conscientious consumers who assess the efficacy and safety of cosmetics ingredients is bringing more value to the aesthetic medicine brands that GoLong introduced to the market.
However, the fact that the Chinese local brands are continuously increasing their recognition among customers and taking more and more of the market share poses a considerable challenge that GoLong will have to face along the way.