Key Takeaways:
At a time when most global beauty conglomerates are looking to slim down their portfolios, one Chinese competitor is taking the opposite approach.
Proya Cosmetics, the Shanghai-listed beauty company, has set its sights on breaking into the world’s top ten cosmetics groups over the next decade through acquisitions of Western brands as it positions itself as a Chinese champion ready to compete on a global stage. Last week, it announced plans to issue its shares in Hong Kong to accelerate and fund its internationalization strategy after logging a significant slowdown in revenue growth in the first half of 2025. The move comes as it seeks to scale growth and reach revenue of at least 50 billion yuan ($7 billion) under a new generation of leadership headed by Hou Yameng, son of co-founder and Chairman Hou Jungcheng. Proya reported revenue of 10.78 billion yuan ($1.5 billion) for 2024, up 21% from the previous year, becoming the first Chinese beauty brand to cross the 10 billion yuan mark ($1.4 billion), though still far from its global ambitions.
The company, which introduced its namesake skincare brand in 2003, has since expanded into skincare, makeup, and body and hair through its own brand launches and acquisitions, including Chinese makeup brand Timage and Japan’s skincare and haircare line Off & Relax. While the vast majority of its sales come from online platforms such as Tmall, TikTok, Taobao, and Jingdong, Proya is working to strengthen its offline footprint, particularly in department stores and other physical retail sites. In 2024, it opened a Paris branch anchored by an R&D laboratory led by Lieve Declercq, Estée Lauder’s former Vice President of Science Research for Europe and Asia–a hub for its global M&A push and part of a broader ambition to become “The Estée Lauder Companies of tomorrow,” according to analysts.
“Potential M&A targets for Proya could include foreign companies with strong offerings in the categories of fragrances, men’s skincare, and baby and children’s products,” said Melinda Hu, Senior Research Analyst at Bernstein.
She added that Shiseido’s fragrance division, home to Issey Miyake and Narciso Rodriguez, could be contenders given their established reputation, though smaller niche European brands might also appeal to diversify its portfolio.
“Europe’s beauty market is especially rich with independent brands, particularly in France and the UK, making it fertile ground for Proya’s expansion,” Hu said, noting that other Chinese competitors operating in the skincare and color cosmetics market have already taken a similar path.
Yatsen, the publicly traded parent company of popular Chinese makeup brand Perfect Diary, has also built a more traditional portfolio, but added European names such as French premium skincare brand Galénic in 2020 and UK-based luxury skincare name Eve Lom in 2021.
Other Chinese players combine acquisitions with distribution agreements with foreign brands. S’Young Group, which distributes brands such as Kiko Milano and Jo Loves in the Asian giant, calls itself a technology-driven enterprise focused on R&D-enabled brands and digital empowerment for organizations. It bought France’s luxury skincare house EviDenS de Beauté in 2022 before acquiring US luxury skincare line RéVive in 2024.
Similarly, Ushopal—which distributes Anastasia Beverly Hills, Bulk Homme, and other international labels, describes itself as “the leading luxury beauty group originating from China.” It expanded its portfolio with British luxury skincare brand Argentum Apothecary in 2022 and French skincare house Payot earlier this year.
Still, at this stage it’s unclear whether Proya will target independent brands or pursue acquisitions from larger conglomerates like L’Oréal or Estée Lauder. “The decision may hinge on factors like brand scalability, market fit in China, and acquisition costs,” Hu said.
European brands that could be up for sale include Unilever’s REN Clean Skincare—known for its sustainable and sensitive-skin-friendly products but slated to shut down by the end of the third quarter of 2025—and L’Occitane, which has a strong foothold in both fragrances and skincare, Hu said.
Across the Atlantic, New York-listed Estée Lauder may be considering divesting its haircare unit and exploring sales in other areas, such as color cosmetics, according to Citi retail analyst Filippo Falorni. At the same time, Coty—listed in both New York and Paris—has been struggling across its mass and prestige divisions, and could also be mulling divestitures, Falorni added.
Proya’s ambitions come as large beauty conglomerates face activist investor pressure and mounting scrutiny from Wall Street to deliver change, said Frank Petraglia, National Deal Advisory and Strategy Leader on consumer and retail at KPMG.
“Investors want transparency, so instead of waiting until they have something big to announce, companies now communicate openly that they’re reviewing their portfolios to signal they’re proactive, not complacent,” Petraglia said.
Estée Lauder Chief Executive Stéphane de la Faverie recently told investors that the company had hired an external adviser as part of its portfolio review, while also outlining an expanded turnaround plan that is set to cut up to 7,000 jobs. “We recently engaged an external adviser as we consider evolving the portfolio to best align with the strategic vision of Beauty Reimagined and focus on our highest-return opportunities,” he said.
Earlier in August, Kenvue’s interim CEO Kirk Perry said the Neutrogena owner is “actively focused on improving execution and performance, while advancing the comprehensive strategic alternatives review,” after reporting a 4% drop in sales for the June quarter. Perry, who took over from ousted CEO Thibaut Mongon amid activist investor pressure, said the aim is to ensure Kenvue has “the right talent, brand portfolio, and operational foundation to accelerate profitable growth.”
Coty struck a similar tone, with CEO Sue Nabi stressing that the group is concentrating resources on its strongest businesses. “We are going to be very, very careful in making the full resources available behind what is our strength, what is our uniqueness, and what is our growing business today, and most profitable business,” she said after Coty’s quarterly earnings.
Estée Lauder and Coty reported a 12% and 8% decline in June quarter sales, respectively.
Deals involving Chinese buyers often face heightened scrutiny in the US and Europe, requiring companies to prepare for potential delays and conditions, Petraglia said. “However, if U.S. Steel can attract foreign bidders like Nippon Steel and get through a review, I don’t see why beauty deals couldn’t be approved.”
Overall, conglomerates’ desire to reshape portfolios will drive an increasing level of mergers and acquisitions activity in the back half of 2025 and 2026, Petraglia said.
Proya, Estée Lauder, Coty, and Shiseido declined to comment.
Proya’s growth push also comes at a favorable moment. There are more willing sellers than buyers in the market, Citi’s Falorni said. “There’s a lot of speculation on potential deals right now.”
Proya could be among the most active global buyers, as Chinese conglomerates seek acquisitions abroad to offset a maturing home market, according to a representative from Kantar. The market research firm expects the Asia-Pacific players to be leading bidders for prestige European and US assets over the next 12 to 24 months.
“Proya Cosmetics can act as a classic example of a Chinese beauty champion ready to play on the global stage,” Kantar’s representative said. “Having built scale and credibility at home, it now faces the reality of slower domestic consumption and rising competition. That makes this a smart moment to look West. Acquiring established brands gives instant access to heritage, premium positioning, and new categories that are harder to build organically.”
“If executed carefully and with sensitivity to brand DNA, this can be a powerful way to accelerate global growth,” Kantar’s representative added.
