L’Oréal has just acquired a minority stake in Shinehigh Innovation, a Chinese biotechnology company dedicated to innovation. The aim of this partnership is to co-develop innovative and sustainable beauty solutions.
Founded in 2017 by professor and scientist Jiaheng Zhang, Shinehigh Innovation is a Chinese start-up specialising in supramolecular chemistry. In other words, it is developing a technology for the intelligent self-assembly of molecules that enables previously impossible combinations of ingredients to be made.
This is the very first open innovation investment made by L’Oréal in China via Shanghai Meicifang Investment, its fund set up in May 2022 to support innovative Chinese brands, which already invested a year ago in the Chinese perfume house Documents. This investment, the amount of which was not disclosed, is also backed by Bold, L’Oréal’s venture capital fund for strategic innovation.
L’Oréal also points out that this is the first investment in connection with the Big Bang Beauty Tech Innovation Challenge. Launched in China four years ago, this platform dedicated to innovation challenges aims to create solutions alongside start-ups to improve the personalisation of products, services and consumer experiences. Since its launch, it has attracted more than 1,500 Chinese start-ups and nearly 20 French start-ups to China, with a total of 30 award winners and more than 50 pilots launched.
“We are very confident about the long-term future of the Chinese market. After 25 years of development, China has become our source of inspiration for the future of innovation. Firmly convinced of the potential of co-creation, we launched Big Bang 4 years ago and founded Meicifang, L’Oréal China’s investment company, last year. I’m delighted to see that all our efforts have paid off today: investing in Shinehigh Innovation, winner of the 2022 edition of Big Bang. Today, Big Bang extends to the North Asia region and we are looking forward to inventing the future of beauty on the North Asian and global markets with many other partners”, explains Fabrice Megarbane, general manager of the North Asia and L’Oréal China region, who will shortly be taking over as head of market development for the group.
L’Oréal, which saw its sales jump by 12% to 20.57 billion euros in the first half of its 2023 financial year, first entered the Chinese market in 1997. Headquartered in Shanghai, L’Oréal China currently has 31 brands and a research and innovation centre, as well as two factories in Suzhou and Yichang, employing over 14,000 people.
With average annual growth of 12.3%, the Chinese beauty market, driven by a generation of young, discerning consumers, is expected to reach €49 billion by 2024.
The American cosmetics group Estée Lauder, via its New Incubation Ventures fund, recently announced an investment in the Chinese skincare and make-up brand Code Mint.
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