Beauty Brand Third Partner Larami Formally Submitted the Prospectus

Naris, Byphasse, Ziaja, Gifrer, Casmara and other overseas cosmetics brands, including beauty brand third partner Larami, has formally submitted the prospectus.

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According to CHAILEEDO, beauty brand third partner Guangzhou Lalami Information Technology Co., Ltd (hereinafter referred to as "Lalami ") formally submitted the prospectus yesterday (July 7, China Standard Time) for listing on the main board of Shenzhen Stock Exchange, adding one more member to the rank of beauty brand third partners.

According to the prospectus, in 2021, Lalami's total revenue was 840 million yuan, up by 7.25% year-on-year, with revenues of the top five brands accounting for 89.84%. Compared with Lily&Beauty, Winchance and other companies, Lalami stands in the mid-level of the industry.

According to the prospectus, Lalami was formerly the Guangzhou Changqin Trading Co., Ltd with its inception in 2012. Then it was renamed Guangzhou Lalami Information Technology Co., Ltd. in 2015. As a comprehensive e-commerce service provider for overseas cosmetics, its main business covers Internet retail service and offline distribution, offering services like sales planning, store operation, promotion and so on.

At the moment, Lalami has successfully bred Naris, Byphasse, Ziaja, Gifrer, Casmara and other overseas cosmetics brands in the Chinese market. As of 2021, the total number of cooperative brands reached 28, including those of facial care, body care, mother and baby products, sunscreen, cosmetics and other categories.

The prospectus shows that the revenue of Lalami from 2019 to 2021 was 761 million yuan, 784 million yuan and 840 million yuan respectively, with the net profit being 64 million yuan, 58 million yuan and 60 million yuan respectively. Overall, Lalami's performance is on a steady rise.

From the business composition, its main part of revenue comes from the Internet retail service. Among them, the income of the distribution business of Lalami e-commerce was 372 million yuan, 370 million yuan and 441 million yuan respectively from 2019 to 2021, accounting for 48.90%, 47.27% and 52.52% respectively; Offline distribution also increased from 7.24% in 2019 to 11.76% in 2021.

However, the share of e-commerce retail business has declined from 43.58% in 2019 to 35.31% in 2021. In 2021, the company's e-commerce retail revenue fell 10.67%, mainly due to the fierce competition in some make-up removers such as Byphasse and the decline in related product revenue, Lalami explained in the prospectus.

According to the prospectus, the total income of the top five brands of the company from 2019-2012 was 658 million yuan, 711 million yuan and 755 million yuan respectively, accounting for 86.44%, 90.80% and 89.84% respectively, and the concentration of brand sales was relatively high.The top five brands are Naris, Byphasse, Avene, Gifrer, and Ziaja, securing these places for the past 3 years already, but with different rankings each year.

Among them, the sunscreen brand Naris has become an important engine to drive performance. From 2019-2021, its sales proceeds reached 189 million yuan, 272 million yuan and 352 million yuan respectively, accounting for 24.83%, 34.73% and 41.86%, being undoubtedly Lalami's "Trump card" for two consecutive years.

To report, the IPO of Lalami is proposed to raise 578 million yuan, of which 380 million yuan will be invested in the brand incubation and operation & promotion construction project with the aim to introduce and develop four non-local cosmetics brands in the four years to come. And this will mean a further increase in the promotion investment in the company's existing cooperative brands such as Naris, Byphasse, Ziaja, Gifrer and Casmara.

In recent years, with the establishment of flagship stores entering China's major e-commerce platforms, the value-added services of Chinese e-commerce integrated service providers have been well-received by the market. It is expected that going forward, the number of Chinese cosmetics E-commerce service enterprises will increase further, the market competition will intensify in a gradual manner, and the service types targeted will be more segmented; At the same time, leading enterprises in the industry will continue to expand their competitive edges with market concentration redoubled and leading effect more prominent.

With the popular "good-looking-oriented economy" and the consumption upgrading, consumer demand for cosmetics take up a more refined and specialized trend, and the segmentation of consumption demand directly impacts corresponding cosmetic products. Whether Lalami can break away from market and category restrictions, and escape the growth curve presents both challenges and opportunities ahead.