이 기사는 2021년 09월 09일 08:08 thebell 에 표출된 기사입니다.

South Korean original development manufacturer (ODM) Cosmax has formed a strategic alliance with China’s top two online cosmetic brands, Florasis and Yatsen.

Cosmax’s Chinese subsidiary Cosmax China has established a joint venture (JV) specialized in R&D, in partnership with Florasis last month, industry sources said on Wednesday. The JV is 60% owned by Florasis and 40% owned by Cosmax China.

The JV has been formed one year after Cosmax Guangzhou created Yatsen Biotechnology, a 51:49 joint venture it formed with Yatsen, which owns Perfect Diary, in 2020.

Cosmax seemingly aims to secure Florasis as its client through the latest alliance. Florasis overtook Perfect Diary as the top online cosmetic brand last year. Revenue of Florasis increased 200% to 3 billion yuan ($464.4 million) in 2021 from 1.01 billion yuan in 2019. Perfect Diary’s revenue increased from 3.5 billion yuan to 5.2 billion yuan during the same period.

Florasis is expected to cement its position this year. The company recorded revenue of 850 million yuan through Alibaba in the first quarter of this year while Perfect Diary recorded 690 million yuan. Florasis plans to create a JV with Unilever to launch a high-end cosmetic brand.

In response to the trend, Cosmax has formed a solid relationship with the two Chinese firms by forming a JV with Perfect Diary through Cosmax Guangzhou last year and creating another JV with Florasis through Cosmax China in August of this year.

Cosmax has Cosmax East as its holding company in China and has two production units, Cosmax Guangzhou and Cosmax China. The two production units have a combined production capacity of 720 million units, the largest among all cosmetic manufacturers in China. Based on the new partnerships, Cosmax plans to manufacture around 500 million cosmetic products in China this year.

“Nothing has been finalized regarding a joint venture with Florasis,” said an official at Cosmax.

Yatsen Biotechnology received 16 billion won ($13.7 million) from its two parent companies through two rounds of rights offering this year. The proceeds are expected to be used to construct a production plant, which is likely to be completed around 2023. (Reporting by Hyo-jeom Jun)