Caixin media alerts on October 14th (Reporter Luo Yichen) : While most beauty peers are exploring overseas markets, Syoung Group (300740.SZ) has taken a different path. In the research notes released today, the company revealed that it had just completed the signing of an acquisition contract for a US beauty brand, expecting to complete the delivery in the next two weeks.

According to the plan of Syoung Group, previously through the acquisitions of the French brands EDB and PA, it had already opened up the offline high-end distribution channels in the European market. This acquisition of an American brand will fill the distribution gap in the USA market, establishing a global distribution system that will benefit all its brands.

While global expansion is promising, the company's performance also faces real pressure. After launching operations to acquire overseas high-end brands, the company's performance significantly improved in 2023. However, in the first two quarters of this year, it once again entered a downward range. Overall, the domestic business of the company's high-end brands is still in a period of channel and brand development investment.

For this acquisition, Syoung Group did not disclose the name of the target brand or the scale of the acquisition, only revealing information such as the brand being 'founded by plastic surgeons', 'having nearly thirty years of history', and 'positioned as luxury, with mainstream product prices around $300'.

It is known that beauty brands founded by dermatologists and plastic surgeons have always been popular acquisition targets. The American brand Dr. Dennis Gross Skincare was acquired by Shiseido Company, Limited Sponsored ADR at the end of last year. Before that, brands like OBAGI and SkinCeuticals had also changed ownership. Some opinions point out that dermatology is breaking the boundaries of beauty, bringing greater imagination to business growth, becoming a definite 'trend' in this extremely uncertain era.

From the existing information, there are many highlights to this acquisition. In terms of track expansion, Syoung Group started with mass skincare products, entered the high-end skincare track by acquiring the two French brands EDB and PA, and with this acquisition, will enter the dermatology and beauty track, securing its position in the field. In terms of market expansion, the companies previously acquired EDB and PA, with their markets focused in Europe. With this acquisition of an American brand, Syoung Group's business will expand into the USA market.

Syoung Group's overseas business relies more on offline channels. Caixin media reporters noticed that in recent years, a series of acquisitions by the company have been aimed at offline channel resources. The announcement shows that the company's management mentioned during institutional research that the acquired American brand has entered almost all core ultra-high-end channels in the USA, while the existing brand EDB's channels are still missing this part of the map in the USA.

Valuing offline channel resources so much may be related to the development history of syoung group. Starting from an e-commerce platform, syoung group's domestic brand development was once limited by the lack of offline channel presence, although the company did make efforts in offline layout. However, in the domestic market where beauty consumer is shifting rapidly online, the actual effect was not significant.