Expanding its footprint in China’s beauty sector, Estée Lauder has taken a minority stake in the Chinese fragrance brand, Melt Season, signaling a strategic move to tap into China’s burgeoning perfume industry. This recent investment, facilitated through Estée Lauder’s investment arm, New Incubation Ventures, follows the company’s earlier venture into the Chinese skincare and makeup realm with Code Mint.
While specific financial details remain undisclosed, Estée Lauder’s entry into the Chinese fragrance market is notable, considering China’s projected ascent as the world’s second-largest fine fragrance market, expected to trail only behind the United States in the near future. In a parallel move, L’Oréal China also ventured into this sector by investing in a Chinese fragrance brand called Documents back in 2022.
Melt Season, established in 2020 by Lishi Ni, specializes in premium personal scents and has received funding from notable investors such as One Capital in 2020 and Breeze Capital in 2022. Estée Lauder’s decision to invest in Melt Season comes amidst financial challenges for the company. In the first quarter of fiscal year 2024, Estée Lauder reported a 10% decline in revenue, amounting to $3.52 billion. This downturn is attributed to anticipated difficulties in travel retail activities across Asia and a slower-than-expected recovery in China’s luxury product market.
The move to invest in Melt Season underscores Estée Lauder’s commitment to diversifying its portfolio within the rapidly evolving Chinese beauty industry landscape, aiming to leverage the growing consumer interest in fragrances and further establish its presence in this market segment.
