Will Florasis create a new Chinese legend after being capitalized?
According to a LatePost report, Florasis, an emerging Chinese cosmetic brand, is seeking series A funding from Hillhouse and Sequoia. The source added that the company is recruiting a CFO, and the listing of its parent company: Yige Enterprise Management Group Co., Ltd. might have been placed on the agenda.Florasis quickly denied the news, officially responding through caijing.com.cn that the company has no immediate plan to seek funding and listing."However, a cosmetic insider familiar with Florasis told CBO that the company started to seek funding from late 2020.
Florasis is an emerging Chinese cosmetic brand established in 2017. Within less than 5 years, it quickly became a force that cannot be underestimated in the cosmetic industry through building the image of "Oriental beauty", promotion by KOLs like Li Jiaqi, and viral recommendations via social platforms.
Florasis's online sales were only 43.19 million yuan in 2018, but soared to 1.13 billion yuan in 2019, up 25 times, and are expected to be close to 3 billion yuan in 2020.
Since the second half of 2020 Florasis has outshone Perfect Diary in Gross Merchandise Value (GMV), sales, and sales volume growth on Taobao related platforms. According to Tao data cited, Florasis's online GMV washigher than Perfect Diary's from May to July 2020. In terms of year over year GMV growth ,Florasis overwhelmed Perfect Diary by three-digit or near three-digit growth.A source said Florasis aimed to achieve a GMV of 5 billion yuan in 2021.Wu Chenglong (nicknamed "Huamantian"), founder of Florasis, wrote in his blog "The success or failure of a brand is often determined by its DNA –brand positioning.".Wu, former Director of Operations of Pechoin, showed his persistence in Chinese style when he was working at Pechoin. He and his team increased the daily sales of Pechoin Tmall Flagship Store from 4,000 yuan to 600,000 yuan, raising its ranking among Tmall cosmetic stores from outside of the top 300 to the top 1.On the other hand, the regimented marketing of Chinese style made it extremely difficult to achieve a breakthrough in brand image. Compared with its unavoidable opponent Perfect Diary, which has never ceased acquisitions and launches new products rapidly, Florasis is inferior in the number of brands and SKUs.Many insiders question if Florasis is overly relying on top KOLs like Li Jiaqi. According to research data released by Doris Ke, founder of Digipont, one livestream session by Li Jiaqi can contribute 20 percent of revenues to Florasis compared to other influencers that can contribute 10 percent only."It is no surprise that Florasis will seek funding. Capital investors need Florasisto continue to represent emerging Chinese cosmetic brand, and Florasis also needs new capital to help it grow." an insider said.
