China's Baby Skin Care Leader Yumeijing with 90% Market Coverage Will Be Purchased

Recently, the Anti-monopoly Bureau of the State Administration for Market Regulation Of China released the news that Tianjin Pharmaceuticals intends to purchase the equity of Yumeijing Group to obtain 87.7671% of the equity, and the acquisition right of 1.1% of the equity held by relevant shareholders, and become the controlling shareholder of Yumeijing.

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Yumeijing Group was established in 2000, but the history of its brand can be traced back to the 1990s. According to Yumeijing's official information, Tianjin Second Daily Chemical Factory, the predecessor of Yumeijing Group, was born in 1979. And in the second year, Yumeijing children's cream was independently developed, which was China's first children's cream, with sales of $473,600 in 1981. The production and sales of Yumeijing children's cream once ranked the first of similar products in China, and its products even covered more than 90% of the Chinese market, with sales revenue of nearly 30 million US dollars in 2003.

According to the public notice, Tianjin Pharmaceuticals intends to acquire Tianjin Haisheng Yumei Investment Partnership (limited partnership) held 87.7671% Yumeijing equity, and at the same time to obtain the right to purchase 1.1% Yumei Yu Held by Haisheng yumei equity. After the completion of the transaction, Tianjin Pharmaceutical will hold 87.7671% of Yumei Jing's equity, and enjoy the acquisition right of 1.1% of the target company's equity held by relevant shareholders, and become the controlling shareholder of Yumeijing.

So why has the takeover plan attracted the attention of China's anti-monopoly authorities?

It is understood that in addition to pharmaceuticals, Tianjin Pharmaceuticals is also engaged in a small amount of adult skin care products production and sales business, in line with the relevant requirements of China, "In the same relevant market, the sum of the market share of all operators involved in the concentration should be less than 15%". In the adult skincare market, the net market share of Tianjin Pharmaceuticals and Yumeijing is 0-5%; In the baby skin care products and baby bath products market, Yumeijing net market share is also 0-5%.

According to oIBP, the market size of China's mom and child skin care products reached $4.203 billion in 2020, with a year-on-year growth of 10% and a compound growth rate of 13.61% in the recent five years. It is expected to reach $7.4 billion in 2025.

At this present stage, China's mom-and-child skin personal care market as a whole is divided by Chinese brands and international brands with still relatively fierce overall market competition. French sensitive skincare brand Avene has listed children's care products in China, and Botanee Group, the parent company of Chinese brand Winona, has also launched the efficacy care brand "Winona Baby", which focuses on infant skin care. In the past decade, although traditional top brands are still in the forefront, their market share is declining year by year. With the help of new channels, new brands rise and develop rapidly, occupying some market share of old brands, and the whole market share tends to be decentralized.

Moreover, with the official release of The Regulations on Supervision and Administration of Children's Cosmetics, China's first regulatory document for children's cosmetics: It is not allowed to declare "food grade" or "edible", mark children's cosmetics. Also, the three principles of "safety first, efficacy necessary, and formula minimalist" should be followed in formula design. More importantly, detailed provisions on safety assessment and necessary toxicological tests will also further promote the standardized development of China's infant and child care industry, raising the entry threshold and accelerating the reshuffle of the industry.

In the future, when China's infant and child care market gradually tends to be professional, refined, and high-end, it will undoubtedly bring more difficulties to traditional brands like Yumeijing .