Key Takeaways:
French perfumer Yuri Gutsatz joined the selective club of niche fragrance creators when he founded Le Jardin Retrouvé in 1975. From the beginning, the family-owned business set its sights beyond its home market, striking early overseas partnerships with department stores such as Barneys New York, which later helped it take the brand to Japan in the 1990s.
Relaunched a decade ago to capitalize on the rise of niche fragrance under the leadership of CEO Michel Gutsatz, Le Jardin Retrouvé is now pursuing its next phase of growth by targeting China. This ambition has proved far more challenging than expected since the onset of Covid-19. The brand is part of a widening cohort of smaller Western beauty labels seeking cross-border partnerships with Chinese conglomerates or investment funds to scale in the largest beauty market.
As Chinese companies like Proya Cosmetics and its consumer base mature, opportunities remain for European brands with a differentiated brand heritage, but the window is narrowing.
“I don’t know anyone who has had a truly smooth path into China,” Michel Gutsatz told BeautyMatter from the brand’s Paris boutique, moments after welcoming two Korean clients who entered the store already knowing what they were looking for, thanks to platforms like Chinese product review app Redbook.
The company is actively seeking foreign investors, with China among the most compelling options. Turning that interest into completed deals, however, has become harder as local brands gain momentum and push upmarket.
Eight to ten years ago, Chinese groups were eager to back early-stage European beauty brands, often prioritizing growth potential over execution risk. The lessons from those investments have since reshaped their M&A playbook, leaving active buyers such as Proya Cosmetics or investment funds like Being Capital far more selective.
That efficiency in approaching deals comes with greater discipline. Still, European skincare brands generating $20 million to $50 million in annual sales remain firmly on the radar of Chinese firms, particularly when backed by a strong and credible founding team, according to Mengyuan Jiao, investment banker at Ohana & Co.
The upside of a more rigorous M&A environment is speed: once a Chinese company or fund identifies the right brand and strategic alignment is clear, deals can close in as little as three months.
“Chinese buyers have improved dramatically in deal execution,” said Ariel Ohana, Managing Partner and investment banker at Ohana & Co. “Many of the Chinese companies we’ve discussed deals with can now follow the pace of a Western sell-side process, at a similar level to L’Oréal or Coty.”
Ohana & Co was an early mover in the Asia-Pacific deal market, building a cross-border operation well before Asian transactions became central to the global beauty industry.
Across the region, the firm has advised Japan’s Kosé Holdings Corporation on its acquisition of Tarte Cosmetics, as well as South Korea’s Amorepacific on the purchase of Annick Goutal. In China, Ohana has worked on both sides of the table, advising domestic beauty groups pursuing acquisitions in the West and Western brands exploring a sale. S’Young Group, for example, turned directly to the boutique investment firm as it began hunting for Western targets, ultimately acquiring French skincare brand Evidens de Beauté in 2022 and US label RéVive Skincare in 2024.
Chinese beauty conglomerates’ push into Western acquisitions coincided with a softening market at home, Ohana said. “For the first time, many groups began to question whether China alone was sufficient, and concluded it was time to pursue global growth.”
Being Capital and Ushopal: When Europe and China Come Together
Chinese investment firm Being Capital is evaluating both Chinese and European consumer brands for global opportunities, with haircare and supplements emerging among its top priorities as the skincare category grows increasingly saturated in China.
“The haircare category still offers room for innovation and premiumization,” the firm’s Executive Director Horace Zheng said, pointing to L’Oréal-owned Kérastase as one of the few global brands that has successfully scaled at the high end.
That focus is reflected in how Being Capital sources European opportunities.
The fund tracks bestsellers at Sephora, taps word-of-mouth from industry contacts across Europe, and scans social media platforms such as TikTok, Instagram, and Redbook for signs of consumer interest and business potential in China.
When it comes to Chinese assets, Being Capital’s portfolio includes fragrance label To Summer, in which it holds a larger stake than L’Oréal, as well as makeup brand Mao Geping, founded in 2000 by its namesake makeup artist and listed in Hong Kong at the end of 2024, when it raised about $300 million.
Like their Chinese counterparts, Western firms are reassessing how they invest in the C-beauty industry after earlier missteps. Capital is increasingly flowing toward the most established brands, including Mao Geping, which recently received backing from L Catterton to support its global expansion through the creation of an equity investment fund. But in doing so, these investors are also overlooking a cohort of midsized, privately owned players with significant upside, Zheng said.
He estimates there are five to 10 such local beauty companies with annual sales of $300 million to $500 million, many of which could scale into $1 billion businesses. Names with the strongest growth potential include Florasis, which in 2024 opened its first European counter in Paris at La Samaritaine, as well as Grain Rain, One Leaf, Pechoin, and Chando, a skincare brand that recently reached unicorn status with a valuation of around 7.14 billion RMB ($1 billion).
At the same time, hybrid ownership models are gaining ground in global beauty as money flows between Europe and China.
One example is Ushopal, a Shanghai-based luxury beauty group backed by France’s Cathay Capital that operates somewhere between a beauty conglomerate like Coty and a private equity firm like Manzanita Capital.
Since its establishment in 2017, Ushopal has built a portfolio of European brands: France’s Juliette Has a Gun, Payot, and Bonpoint Beauté, and the UK’s ARgENTUM. And while it has some China exposure, including a 2024 funding round in fragrance label Documents, its core focus remains investing in European brands, said partner William Lau.
Cross-border dealmaking is rarely seamless at the outset, as many beauty brands arrive with legacy issues and inefficient ways of working. Acquisitions tend to work, however, when founders and operators remain open to new ideas, Lau said.
He added that Ushopal plans to pursue one or two acquisitions a year as the M&A market moves beyond the “crazy valuations” seen around 2023, citing Kering’s €3.8 billion ($4.1 billion) purchase of Creed.
The Hong Kong IPO Consumer Boom
Chinese beauty companies’ global ambitions are increasingly being channeled through the recent uptick in IPOs in Hong Kong, which has become a preferred offshore gateway to finance overseas expansion.
Consumer-facing listings have surged since 2025, with China’s third-largest beauty group Chando Global Holdings following the path set by Proya Cosmetics, which is preparing a secondary listing in Hong Kong to fund its international expansion and cross-border M&A.
The shift towards Hong Kong isn’t casual. “Many companies’ purpose of going public in Hong Kong is to expand their business in Europe and South Asia,” Zheng said, adding that he expects the consumer IPO boom in Hong Kong to last at least through the end of 2026.
Over the past year, European investors, particularly from France and Germany, have emerged as some of the most active backers of Chinese consumer companies, especially in cosmetics and branded consumer staples. Typical investment sizes start at around $30 million, but can go as high as $100 million.
What stands out to Zheng is the growing role of European institutions as cornerstone investors in Hong Kong listings, a structure that requires shares to be held for at least six months post-IPO. The model signals longer-term conviction rather than short-term trading and has helped reinforce Hong Kong’s appeal as a stable capital-raising venue for Chinese brands with global ambitions.
In 2025, Hong Kong hosted 119 initial public offerings, a 68% increase from the previous year, raising HK$285.8 billion ($36.6 billion) and more than tripling 2024’s total, according to data from consulting firm PricewaterhouseCoopers. IPO activity was led by retail, consumer goods and services, accounting for 28% of listings, followed by information technology and telecommunications services at 26%, and healthcare and pharmaceuticals at 25%.
“Despite uncertainties in the global geopolitical landscape, the demand for international financing by Chinese enterprises and investors’ interest in high-quality Chinese companies remain strong,” said Eddie Wong, Capital Markets Leader at PwC Hong Kong.
PwC forecasts that Hong Kong will host about 150 listings this year, a 26% jump from 2025, driving fundraising of between HK$320 billion ($40.93 billion) and HK$350 billion ($44.77 billion). The mega-deal pipeline holds firm, with more than 10 offerings expected to raise over HK$5 billion ($640 million) each.
China’s Evolving Role in Global Dealmaking
The global push among Chinese beauty companies is accelerating as investor sentiment toward China improves, with Trump-era trade policies weighing on transatlantic relations and unsettling Europe.
“Two things are happening,” said Laura Grünberg, a Senior Consultant specializing in cross-border strategic advice at Kekst CNC. “First, Chinese capital is shifting away from the US toward Europe and other regions as the US has become more complicated. Second, opinion polls show that greater exposure to Chinese consumer goods, combined with declining confidence in the US, has led to rising trust in China.”
The change in the perception of China is already visible in dealmaking.
Chinese buyers are increasingly treated as credible, bankable counterparties by European sellers, reflected in a string of high-profile consumer transactions in the past few months.
These deals include Kering’s sale of its stake in Puma to China’s Anta Sports Products, LVMH’s divestment of DFS Group’s China travel retail business to China Tourism Group Duty Free, and JD.com’s acquisition of a majority stake in German electronics retailer MediaMarktSaturn. The latter deal, if approved by the European Commission, could help set a precedent for future Chinese-led M&A in Europe, Grünberg said, signaling a green light for similar transactions within the beauty sector.
What’s Next as Chinese Beauty Brands Look to Rise Beyond the Mass Market
The rise of domestic Chinese brands is unlikely to displace beauty labels rooted in French or British heritage or Swiss excellence, but local players are moving decisively beyond the mass market and up the value chain, increasing pressure on both established Western groups and independent brands.
For Le Jardin Retrouvé, the next few years will be pivotal. The founder-led fragrance house generates about 25% of its sales through e-commerce in an increasingly digital-first industry and lacks a next-generation family successor willing to take the reins, making scale a strategic priority as it explores a sale.
“There are only a few brands entering China now—those that identify a real opportunity and take the risk—but it is much more difficult,” said Shanghai-based consumer consultant Emmanuel Hemmerle.
That shift toward local brands and their premiumization has raised the bar for smaller beauty brands and largely closed the golden era for Western conglomerates aside from exceptions such as L’Oréal, which continues to gain ground in China.
“That era no longer exists and will not come back,” Hemmerle said.
