ClearVue’s cross-border cosmetic play

"We adopt a research-driven approach to find leading companies in three pillars - food and beverage, lifestyle and consumer technology," says Harry Hui, managing partner at ClearVue. "Cosmetics and skincare sector has a great upside given Chinese consumers are becoming more selective in choosing beauty products that could meet international safety standards."

The GP completed its first deal in the space in 2012, leading a $20 million Series B round for Chinese nutritional beauty products manufacturer Lumi. A second deal came last week with an undisclosed commitment to Europe-based Intercos. This is also the third cross-border transaction from ClearVue's debut fund, which closed at $262 million in early 2014

The Intercos round was led by Catterton, a US-based PE firm that also focuses on the consumer space. Three months earlier, the Italy-headquartered company abandoned plans to list on the Milan bourse due to adverse conditions and high volatility. Hui says the firm now plans to concentrate on growing its business with a view to reactivating the IPO plan in a few years. China is a key target market and ClearVue will serve as Intercos' local partner, driving the expansion initiative.

Intercos is described as the world's leading original design manufacturer (ODM) and original equipment manufacturer (OEM) for international cosmetics brands. It produces eye shadows and lipsticks throughout the value chain, from mass market to high-end segments.

The company has over 2,800 employees, seven research centers, 12 production sites and 11 marketing offices across four continents. In China, it already has a production site in Suzhou. This base will not only be used to manufacture cosmetic products for international brands exporting into the US and Europe, but also help Chinese brands develop local products.

At present the China contribution to overall group revenue is small, but ClearVue will use its network to help Intercos forge partnerships with local cosmetic and skincare brands. The market is highly fragments, with the largest players having no more than a 5% share, which makes it difficult for outsiders to penetrate.

"We can help local brands develop different product lines to sell either in personal health and beauty stores or convenience stores. Those companies will invest large amounts in promoting their new products, which will drive Intercos' inventory supply."

Intercos also plans to supply e-commerce operators. Sales of cosmetic products through online channels account for less than 1% of total sales, but Hui thinks this share could expand to 15%. "In today's market, many cosmetic vertical e-commerce platforms have developed their own brands."

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• Topics
• Greater China
• Europe
• Consumer
• Expansion
• ClearVue Partners
• China
• Growth capital
• Europe
• Consumer