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Beijing Liyuan will divest its 35% stake in a Chinese joint venture established with a Japanese cosmetics company to produce perfumes, beauty products, and other personal care items. The sale will be at a base price of approximately CNY199.5 million ($29.3 million), according to equity transaction information from the China Beijing Equity Exchange. A representative from the Japanese company’s Chinese operations confirmed this development.
Founded in 1991, the joint venture was initially co-owned by the Japanese firm, holding a 65% stake, with Beijing Liyuan holding the remainder. Its most well-known brand within the country is Aupres. In its early years, Aupres gained traction by distributing in major department stores across China, targeting a mid- to high-end market segment, an industry insider close to the company shared. However, as e-commerce grew and local brands gained popularity, the brand’s appeal has waned considerably in recent years.
Additionally, missteps during a promotional season on online sales platforms, including excessively generous discounts, adversely affected in-store sales of Aupres, the insider noted.
Financial reports show that the joint venture suffered a net loss of around CNY53.4 million ($7.9 million) over the first five months of this year, on revenue of CNY234 million. Its performance has deteriorated from last year’s net loss of CNY41.3 million, although revenue was higher at CNY869 million, according to data from the China Beijing Equity Exchange.
The decline in performance mirrors the struggles of other Japanese cosmetics brands in China in recent years, largely due to diminished consumer interest, according to industry analyst Bai Yunhu. The Japanese company has also scaled back its presence in China by deregistering its wholly owned South China subsidiary, closing its flagship store for the MaQuillAGE brand on Alibaba’s Tmall, and shuttering its overseas flagship store on Douyin, TikTok’s sister app, earlier this year.
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