Guangzhou-based cosmetics brand Perfect Diary has completed a new fundraising round for an undisclosed amount of capital from investors including Warburg Pincus, Carlyle Group, and Loyal Valley Capital, Chinese media outlet IPOZaozhidao reported on Monday, citing people close to the deal. It would value the company at USD 4 billion, twice as much as after a USD 100 million round closed in March.
The deal comes as China’s cosmetics retail market is quickly rebounding from the COVID-19 pandemic. In the first quarter, sales of cosmetics fell 13.2% year-on-year (YoY) to RMB 63.6 billion (USD 9.4 billion), but advanced again to reach RMB 147.7 billion (USD 21.9 billion) for the first half of the year, down merely 0.2% YoY, according to China’s National Bureau of Statistics. In July and August, the sector reported a YoY-growth of 9.2% and 19% respectively, according to the bureau.
Perfect Diary, which is one of few Chinese domestic cosmetics brands that are competing with international players such as L’Oreal and Shiseido, has planned to kick off its initial public offering in the US before the end of this year, with Goldman Sachs and Morgan Stanley as underwriters, according to IPOZaozhidao.
When contacted by KrASIA on Monday, Perfect Dairy declined to comment on the fundraising or the IPO plan.
Perfect Diary, which was established in 2016, gained its first fans for products such as lipsticks via China’s social commerce platform Xiao Hong Shu, also known as Red, and WeChat. In 2019, the brand was the top-seller for cosmetics on Alibaba’s B2C e-commerce platform Tmall during all of Tmall’s promotional events, including June 18, November 11, and December 12, according to a 36Kr report.
The company has opened a hundred brick-and-mortar stores in cities including Guangzhou, Shanghai, Hangzhou, and Suzhou by June 24, and plans to expand to 600 stores nationwide by 2022.