业绩承诺落空 贝泰妮接手Za和泊美“翻车”了吗？

This article breaks down the recent earn-out clause triggered by unmet performance commitments from the two acquired beauty brands Za and PURE & MILD, which were purchased by Betainey, parent company of popular Chinese skincare brand Winona. Key takeaways are as follows:

1. Background: Za and PURE & MILD are long-established beauty brands originally founded by Shiseido Group. Shiseido sold the brands to Yuejiang Investment in 2022, and in October 2023, Betainey acquired a 51% stake in Yuejiang Investment to fill the gap in its product portfolio, which had no makeup offering. The deal included a three-year performance commitment requiring cumulative net profit of no less than RMB 235 million, with compensation due if the target is missed.

2. Current operating performance: As of 2025, both brands posted year-over-year revenue declines. Za reported revenue of RMB 452 million, down 3.24% YoY, while PURE & MILD generated revenue of RMB 47 million, down 9.61% YoY. However, both brands improved gross margins: Za’s gross margin rose from 58.89% to 63.27%, and PURE & MILD’s rose from 50.00% to 51.06%.

3. Outcome of the earn-out agreement: Betainey will receive an 18.28% stake in Yuejiang Investment for free as compensation, increasing its total holding to 69.28%.

This case of unmet performance targets following Betainey’s acquisition of legacy beauty brands offers practical insights for beauty industry practitioners on multi-brand portfolio building and legacy brand revitalization. Key takeaways are as follows:

1. Insights for legacy brand revitalization: PURE & MILD had already undertaken a youth-focused transformation, updating offline counters, refreshing product packaging, signing top influencer celebrities, and shifting from an offline-first to an omnichannel online-focused model. Even these efforts failed to reverse the brand’s aging trajectory. This demonstrates that revitalizing legacy brands is inherently difficult, and standalone marketing overhauls rarely deliver results. Brand owners should conduct thorough due diligence before adding legacy brands to their portfolio.

2. Insights for M&A risk mitigation: The acquisition included clear performance commitments and an equity compensation mechanism, which allowed Betainey to reduce its losses by acquiring additional equity for free when targets were missed. This structure is a useful reference for brand owners pursuing acquisitions and can effectively reduce investment risk associated with M&A.

3. Insights for multi-brand portfolio strategy: Betainey filled a gap in its makeup category through this acquisition. Furthermore, while both brands saw revenue declines, they improved gross margins, proving that legacy brands still hold untapped profit potential. This approach to building a diversified multi-category product matrix offers a useful framework for brand owners.

This case offers lessons for beauty sellers on legacy brand operations and M&A partnerships. Key takeaways are as follows:

1. Risk reminder: Even legacy beauty brands with established early user bases and well-known hit products face significant brand aging risk, and resource-intensive youth transformation efforts do not guarantee success. Sellers must conduct a full assessment of brand value and operational complexity before taking on a legacy brand project.

2. Opportunity outlook: Za’s iconic隔离霜 (base cream) still holds strong positions on Douyin and Tmall bestseller lists, and both brands improved gross margins after operational adjustments. This shows that legacy brands can still boost profitability through cost-cutting and refined operations, creating valuable opportunities for teams with experience in reviving legacy products.

3. Partnership reference: The performance-based earn-out and compensation structure that bound the original founding team in this acquisition sets a clear template for sellers engaged in M&A partnerships. Structured earn-out agreements effectively reduce acquirers’ investment risk and allow for loss recovery through compensation when targets are missed.

This case offers启示 for beauty manufacturing factories regarding market demand, business opportunities and digital transformation. Key takeaways are as follows:

1. Reference for product design and development: Za rose to popularity with its efficacy-focused隔离霜 (base cream), while PURE & MILD carved out market share with its all-plant skincare positioning. Both align with long-term consumer demand for basic efficacious products with natural ingredients. When legacy brands undergo overhauls, demand for high-quality, affordable basic efficacy products remains stable, and factories can develop tailored products to meet this need.

2. New business opportunities: A growing number of legacy Chinese beauty brands are going through ownership transfers and operational overhauls, with brand owners prioritizing cost structure optimization to lift gross margins. This creates supply chain cooperation opportunities for cost-competitive factories, which can proactively pursue capacity demand from legacy brand revitalization projects.

3. Insights for transformation: Most legacy beauty brands have fully shifted to online operations, leading to higher demand for multi-SKU, small-batch production. Factories can accelerate digital production upgrades to improve flexible delivery capabilities, meet the needs of online-first operations, and boost their overall competitiveness.

This case reveals pain points and trends in the legacy beauty brand revitalization space, offering guidance on business direction for relevant service providers. Key takeaways are as follows:

1. Client pain points: A large number of legacy beauty brands face brand aging. In this case, PURE & MILD tried all common revitalization tactics — packaging updates, celebrity endorsements, and an online shift — yet still failed to reverse its decline. This confirms that brand owners have an urgent unmet need for truly effective legacy brand revitalization and legacy product overhaul solutions, leaving a clear gap in the market.

2. Industry opportunities: Leading domestic beauty companies are now building out multi-brand, multi-category portfolios, and acquiring legacy brands previously owned by foreign firms has become a common strategy to fill product gaps. These acquired legacy brands all require operational upgrades, creating a large pool of potential clients for brand operations, marketing, and supply chain service providers.

3. Targeted business direction: Both brands in this case improved their gross margins, proving that cost reduction and efficiency improvement are the core priorities for legacy brands going through adjustment. Service providers can develop targeted service offerings focused on refined operations and supply chain optimization to match this client demand.

This case offers guidance on merchant recruitment and platform operations for beauty e-commerce platforms. Key takeaways are as follows:

1. Recruitment priority: Hit products from legacy beauty brands like Za still hold strong ranking positions on bestseller lists for platforms including Douyin and Tmall, proving these brands still retain solid consumer recognition. Platforms can proactively onboarding adjusted legacy brands to enrich their brand matrix and meet the needs of different consumer segments.

2. Operational guidance: Most legacy brands transforming are shifting from offline to fully online operations. Platforms can launch targeted support programs for legacy brand revitalization to help these brands adapt to online operations and unlock their existing traffic and transaction value.

3. Risk reminder: Most legacy brands face systemic challenges of brand aging and sluggish growth. When onboarding legacy brands and allocating traffic support, platforms should fully assess growth potential to avoid wasted investment, and prioritize legacy brand projects that have made active adjustments post-acquisition and delivered clear gross margin improvements.

The triggered earn-out clause following Betainey’s acquisition of these two legacy beauty brands provides a representative case study for beauty industry research, reflecting new trends in China’s domestic beauty sector. Key insights are as follows:

1. New industry trends: As domestic Chinese beauty brands rise, leading local players are pursuing multi-category, multi-brand expansion. Many are quickly filling product gaps by acquiring legacy brands that foreign companies are exiting, with Betainey’s acquisition of Za to add makeup offerings serving as a textbook example. This new expansion model merits in-depth research.

2. Unresolved industry challenges: Foreign-owned legacy brands that have operated in China for decades still struggle to resolve brand aging, even after repeated youth-focused transformation efforts. The failure of all standard revitalization tactics in this case confirms that legacy brand revitalization remains an unsolved industry-wide challenge. Additionally, the risk of unmet performance commitments under earn-out-based M&A structures is an important area for further research.

3. Research value: This case publicly discloses granular post-acquisition data including revenue and gross margin for the legacy brands, reflecting profit changes during the adjustment process. It provides a real-world case sample for research on the business models and profitability of legacy brand revitalization.