nt security have dampened consumer spending in China – posing new challenges to their continued growth. Proya Cosmetics’ founder, Hou Juncheng, said last month that the company’s 10-year plan aims to position the firm among the top ten globally, a goal that would require an annual revenue of at least 50 billion yuan ($7 billion). To do so, the Hangzhou-based Proya plans “to acquire some European brands with history and technology”, local media reports cited Hou as telling shareholders at a meeting. Proya, which specializes in science-backed skincare at mass market price points, became the first Chinese beauty player to surpass 10 billion yuan in annual revenue last year. In comparison, Japan’s Shiseido, currently ranked tenth globally, raked in $6.9 billion and market leader L’Oreal generated over $45 billion in revenue last year. S’Young and Ushopal, two prominent Chinese beauty groups, have already made strides in international acquisitions. S’Young owns French skincare brand Evidens de Beaute and US brand Revive, while Ushopal added French brand Payot to a portfolio that includes British skincare label Argentum and French fragrance Juliette Has A Gun. William Lau, a partner at Ushopal, said the company plans to acquire one to two new brands annually. Analysts say buying foreign brands can help Chinese beauty firms diversify revenue streams and reduce reliance on the domestic market, but they also note that some similar efforts by Chinese fashion groups had missed expectations in the past. The beauty and personal care market is projected to generate a revenue of $677.19 billion globally this year, versus $41.78 billion in China, German data provider Statista estimates. Chinese brands are likely to target premium-positioned European skincare, fragrance or haircare brands with valuations under $500 million, said Gregoire Grandchamp, co-founder of Next Beauty China, who has advised Chinese groups on global deals. “In coming years, there will be a big Chinese company that will be the Chinese L’Oreal, Estée Lauder, Shiseido, or Amorepacific,” Grandchamp predicted. Global M&A ‘very difficult’ Acquisitions have long been a growth strategy for beauty giants. L’Oreal’s $2.5 billion purchase of Australian brand Aesop in 2023 added a premium, natural cosmetics brand to its portfolio, while Estee Lauder’s $2.8 billion acquisition of Tom Ford in 2022 helped boost its array of high-end perfumes. Chinese beauty brands aim to borrow from this M&A playbook, but there are concerns about their ability to operate brands outside their home turf. In the fashion space, state-owned textile giant Ruyi once made headlines for snapping up foreign brands and touting its ambition to become “China’s LVMH” only to see those international deals unwound by creditors in a few short years.  But Ushopal’s Lau says these challenges are not unique to Chinese groups, citing examples like Shiseido’s buyout of Drunk Elephant to L’Oreal’s purchase of some Chinese brands that struggled to meet expectations.      “Global acquisitions are very difficult” in general and part of the problem is that companies often try to localize brands too quickly after a deal, he said. “One of the reasons you buy a brand is because it’s an amazing brand, so if you then redo the entire DNA of the brand, what’s the point of buying it?” he added. Mark Tanner, founder and managing director of Shanghai-based marketing and research agency China Skinny, said: “Opening doors to the Chinese market and capital injections, rather than a wholesale management takeover” are more likely to succeed. Reporting by Casey Hall and Sophie Yu; Editing by Himani Sarkar.