7.79亿！杭州百亿巨头吞下“少女风顶流” 冲击港股IPO

This article centers on a landmark M&A deal in the Chinese beauty industry, with key takeaways as follows:

1. Core deal details: Proya, a leading domestic Chinese beauty company, acquired an additional 12.55% stake in Flower Knows (Huaxiaozhi) for RMB 351 million. This brings Proya’s total holding to 51%, making it the largest shareholder of the少女风 (girlish-style) color cosmetics brand. With annual revenue exceeding RMB 1.7 billion, Flower Knows becomes Proya’s second billion-dollar sub-brand, and the deal strengthens Proya’s position ahead of its planned secondary listing in Hong Kong.

2. Underlying rationale: Proya’s flagship brand has hit a growth ceiling, and the company has struggled to incubate a new color cosmetics brand rooted in subculture aesthetics. Flower Knows fills this gap by helping Proya reach younger niche consumer groups, while Flower Knows lacks resources for global expansion and supply chain upgrading. The two sides have highly complementary needs.

3. Shared risks: Proya faces challenges including high integration difficulty and the risk of diluting Flower Knows’ original brand identity. If Flower Knows’ overseas expansion fails to meet growth expectations, the high valuation premium of this deal will become a drag on Proya’s consolidated financial statements.

This M&A is a landmark deal marking the consolidation phase of China’s domestic beauty industry, offering multi-dimensional insights for brand practitioners:

1. Consumer trend: The Z世代 subculture aesthetic track has clear growth potential. Flower Knows’ girlish positioning resonates strongly with consumers aged 15 to 25, and posted 2025 revenue of RMB 1.726 billion with a net margin of 16.2% — proving that niche, segmented tracks can deliver strong profitability.

2. Brand strategy: Chinese domestic beauty has now entered the phase of consolidation led by top players. Building a multi-brand portfolio to cover the full user lifecycle across different segments has become an inevitable strategy for leading brands. Following L’Oréal’s multi-brand matrix model, Proya adopted a flexible "invest first, add stake later" approach, retaining the acquired brand’s founding team and operational autonomy. This experience is valuable for industry peers to learn from.

3. Risk warning: Post-acquisition brand integration is extremely challenging. After L’Oréal acquired MG (Meiji) and Xiaohushi, both brands were gradually marginalized as their unique positioning was watered down. Brands need to proactively guard against the risk of homogenizing and diluting core brand identity.

This M&A signals the latest shifts in China’s domestic beauty track, with key takeaways for beauty sellers of all sizes:

1. Overall industry change: China’s total omnichannel beauty transaction volume exceeded RMB 1.1 trillion in 2025, and domestic brands’ market share rose to 57.37%. However, 26,900 beauty brands exited the market the same year, indicating intensifying industry consolidation and a clear trend of market concentration toward top players. Small and medium-sized sellers must find clear differentiated positioning to survive.

2. Market opportunity: Amid the current downturn in beauty industry investment and financing, capital is increasingly focused on upstream technology. Differentiated mid-tier brands with strong market recognition and independent profitability are extremely scarce. Sellers that accurately target niche consumer groups are far more likely to attract attention from capital and leading industry groups.

3. Partnership and risk: For emerging brands with clear competitive advantages, strategic partnerships with leading beauty groups can unlock access to supply chain, channel and global expansion resources to break through growth bottlenecks. However, emerging brands must prioritize retaining their brand independence to avoid user attrition caused by diluted brand identity.

This M&A reveals shifting product-side demand and new opportunities in the beauty industry, offering insights for beauty manufacturers:

1. Product design and manufacturing demand: Beauty consumption is increasingly stratified today. In addition to standardized functional skincare targeted at ingredient-focused consumers, a large cohort of Z世代 consumers now pursue aesthetic-driven color cosmetics rooted in subculture. Flower Knows has codified its girlish aesthetic into a replicable product language, proving that products aligned with niche group aesthetics have stable long-term growth room. Manufacturers need to adapt to meet these differentiated design and production requirements.

2. Business opportunity: Leading industry players are now rolling out group-style multi-brand portfolios, which will drive sustained growth in demand for manufacturing services. Factories with flexible production capabilities that can accommodate small-batch, diversified production for brands of different positioning will secure more stable long-term cooperation opportunities.

3. Transformation insight: As industry traffic fades, manufacturers must adjust their production direction in line with shifting end-consumer aesthetics to win more orders. Factories can leverage the digital capabilities of leading brand groups to optimize production efficiency and better meet the demand of multi-brand portfolios.

This M&A reflects broader beauty industry trends and core pain points of different industry players, with key takeaways for beauty service providers:

1. Industry trend: Chinese domestic beauty has entered a phase of group-style consolidation led by top players, with industry concentration continuing to rise. Leading players are transitioning from single-hit-product companies to multi-brand group enterprises. Overall industry investment and financing is cooling: brand-side financing accounts for only around 20% of total sector investment, and capital is gradually concentrating on leading brands and upstream technology.

2. Core customer pain points: Most leading beauty groups face slowing growth for their flagship brands, as their existing organizational structures lack the capacity to innovate around subculture aesthetics, so they need acquisitions to fill gaps in their brand portfolios. Meanwhile, differentiated emerging brands, despite their growth potential, lack supply chain, channel and global expansion resources to break through their growth ceilings.

3. Business opportunity: Service providers can develop targeted new service lines to match these needs: for example, offering post-merger brand integration consulting for leading groups to reduce integration risk; providing matching services to connect emerging brands with leading groups and capital; and offering offshore operation services for brands expanding overseas to solve the problem of insufficient global expansion resources for new brands.

This beauty M&A reveals shifting brand-side demand for platforms and new industry trends, with key takeaways for beauty marketplace operators:

1. Brand-side demand: Differentiated positioned emerging brands are extremely scarce today. Data shows that Flower Knows’ search volume on Tmall already outpaces that of luxury international brand Chanel, proving that these niche, youth-aligned brands generate organic traffic. Onboarding such brands allows platforms to enrich their category matrix and attract more young users.

2. Operation optimization: Platforms can build dedicated matching channels to connect interested leading groups and emerging brands. This helps platforms retain high-quality brands, support emerging brands with access to resources, and lift the overall quality of the platform’s brand pool.

3. Risk mitigation: As industry consolidation intensifies, large numbers of brands exit the market every year. Platforms need to optimize their merchant screening and onboarding mechanisms, prioritize onboarding brands with independent profitability and differentiated positioning to reduce the rate of vacant storefronts. They should also proactively track brand changes stemming from leading brand M&A integration, adjust resource allocations in advance, and mitigate the risk of platform traffic volatility caused by failed integrations.

Proya’s controlling acquisition of Flower Knows is a landmark event in the consolidation phase of China’s domestic beauty industry, revealing new trends and new questions for industry development:

1. New industry trends: Domestic Chinese brands now hold over 50% market share, rising to 57.37%, and the industry has entered a phase of deep consolidation and restructuring. The overall market is expanding but the number of active players is shrinking. Competition among top brands has shifted from competing on individual hit products to competing on group-style multi-brand matrices. Leading companies are transitioning from selling hit products to building risk-resistant ecosystem, and M&A has become a core path for leading brands to expand their competitive moats.

2. Innovative business model: Instead of copying L’Oréal’s model of outright acquisition of mature established brands, Proya innovated a "initial investment, gradual stake increase to gain control" model, which retains the acquired brand’s founding team and operational independence. This approach cuts acquisition costs and avoids diluting the acquired brand’s core identity, making this flexible, pragmatic M&A model highly valuable for research.

3. New industry questions: This acquisition also exposes new industry issues: the growth slowdown of leading brands’ core flagship lines, the long-term risk of brand identity dilution in M&A integration, and the uncertainty of betting on future growth with high valuation premiums. These create new research agendas for industrial research.