Post-Acquisition, RéVive Charts Expansion In China As The Country’s Beauty Sales Cool

Following its sale to Chinese beauty conglomerate S’Young Group from Tengram Capital Partners in October last year, RéVive is gearing up for significant growth this year by magnifying its presence in China through livestreaming and e-commerce.

The nearly 30-year-old biotechnology-fueled luxury skincare brand’s China ambitions build on earlier efforts to boost sales through cross-border trade, a practice of international brands selling into China via e-commerce platforms like Tmall Global and bypassing product registration. With the heft of its new parent company behind it, RéVive CEO Elana Drell-Szyfer is confident in its ability to dial up its Chinese business despite economic shakiness in China, declining beauty sales in the country and the departures of other beauty brands.

She says, “Our assumption is there’s an existing level of awareness in the market already for RéVive, when that gets unlocked with investment and the capabilities of a big company, we think that growth will become explosive.”

Launched in 1997 by plastic surgeon Gregory Bays Brown, RéVive’s assortment includes bestsellers $195 Moisturizing Renewal Cream, $295 Rescue Elixir Anti-Aging Oil and $225 Sensitif Repairing Night Cream. It’s stocked at Neiman Marcus, Saks Fifth Avenue, Cos Bar, Bluemercury, Bergdorf Goodman, Bloomingdale’s and Dermstore in the United States.

Drell-Szyfer, who previously held executive posts at Ahava, Laura Geller, Estée Lauder and Lancôme, was brought in as CEO of RéVive after Tengram bought the brand from Shiseido in 2017. Per information in the publication Women’s Wear Daily, ReVive’s sales totaled about $30 million in 2022. S’Young, which is publicly traded on the Shenzhen Stock Exchange, owns French beauty brands Evidens de Beauté and Pier Augé and is a distributor for many Western beauty brands, generated roughly $640.5 million in 2023 sales.

Beauty Independent spoke with Drell-Szyfer about RéVive’s goals, what attracted S’Young to the brand, whether more Chinese strategics will pick up American beauty assets in the future and the causes of beauty’s M&A challenges last year.

What are RéVive’s objectives for this year? 

One of our big initiatives for the year is transitioning to new ownership and working to elevate the Chinese market. We first entered China in late 2018, but we’ve only been sold via cross-border. Our products had not been registered. Prior to the acquisition, we had already started to work on registration, though.

Even cross-border, China had become our priority for the past several years. It was one of our strategic initiatives under Tengram to do a proof of concept for the brand in one key place internationally. We understood early on that there was great affinity for the brand with the Chinese consumer and the traveling consumer around the world. Part of this year will be working with the team in China to launch into the domestic market there and into some new channels, one of which is livestreaming.

There was a huge event in Shanghai last month to officially launch the brand under S’Young’s ownership. Dr. Brown and I presented to the press and influencer community along with some local people, including an influencer whose known as CTT on RedNote. One of the things you do in China when you launch a brand is have brand people speak, but also brand fans speak. CTT has been a brand user for many years. She did a livestreaming event for us recently that was six continuous hours.

Doing livestreaming is something very new for us as a company. Even though it’s being executed first in China, we still have to work with the person and educate them. So, on top of company integration, total global brand marketing integration is another big initiative.

How many countries is RéVive available in?

Twelve. U.S. is still the biggest market by far and will be this year. When I say U.S., it also includes our own e-commerce, which has become a very important part of our business. Owned e-commerce has had a growth rate of probably three times faster than total brand growth. It really came from almost nowhere, and it’s been a big focus for us. The objective is to continue to grow brand awareness and revenue in the U.S. to build out China so we can launch a suite of products that are registered for the domestic market over there.

Will China become RéVive biggest market? 

For the next three to five years, it’ll be the No. 2 market. We’ve only had the cross-border consumer so far, but, in terms of end customer, they’re the same. But there are limits on how much Chinese consumers can purchase annually via cross-border.

There’s a year of finishing product registration, raising brand awareness, investing online and offline. Even if you are a general trade brand, which means your products are registered, your business is still pretty much done online in China, like 70% of it. You have stores and department stores there, and those will develop over time. S’Young are e-commerce experts, so that is really where the brand is going to focus.

Elana Drell-Szyfer, CEO of RéVive

China’s economy grew 5% last year, according to the National Bureau of Statistics, meeting the government’s target, but the country continues to face a raft of challenges. Has RéVive been affected? 

Given RéVive’s scale today in China versus more established brands, and with the dedicated focus on a major presence via S’Young in the market, there is still a significant growth opportunity.

What about RéVive’s retail presence?

We want to continue to focus on our flagship doors like Harrods and Bergdorf Goodman, etc. It’s not that we aren’t going to see growth across all channels. We are in both Saks and Neiman Marcus. They’ve both been very important to us as retail wholesale partners. Obviously, there’s been a merger, and we don’t know what is going to happen. So, it’s not that they don’t remain important, but where we’re really focusing on growth this year is our own e-commerce domestically.

But, that being said, we do also have a focus on the boutique channel domestically. We are fairly underpenetrated in boutiques, and we know it is a place that our customers are shopping.

Across all our channels, meaning offline channels as well, our focus is on events for people who are back in store. We want to elevate events, focusing on both the quick-fix facial in an open-sell type of environment and facial events on a very regular basis in department store environments.

What attracted S’Young to RéVive?

I want to lay that out S’Young capabilities first. They are an 18-year-old company that was started by a founder who is still their founder. They operate 10 brands in China, one of them having 100 million customers. That’s one-third the population of the United States. They have in-house manufacturing, R&D and livestreaming. Every single brand has its own livestreaming studio that runs 18 hours a day in three shifts.

A second part of their business is international distribution. They distribute for 70 international brands in all categories from skincare to makeup and fragrance, mostly in prestige and luxury. Now, they’ve also started to acquire brands. RéVive is their third acquisition.

Strategically, they were looking to diversify their portfolio and acquire brands that were very high quality that already had some awareness with the Chinese consumer and blow them out in China. Obviously, they are a platform that can provide back-office efficiencies for us. They’re a company of 4,000 people, and we were a team of 50. The thesis is that the growth in China can also help fuel investments in other key markets like U.S.

What was eye-opening about RéVive’s sale process?

Obviously, a great deal of the process is confidential since S’Young is a public company. This is not my first sale process. The thing that always seemed really interesting to me is, everybody gets the same materials and sees the same numbers, but deals are relationships. What it means in terms of potential is different with every single process, though.

If I use a relationship analogy to describe it, there are many different suitors out there and each one’s approaching the relationship differently. If this was the RéVive dating app, we’d say we were looking for a partner to help us with cost efficiency, scaling and building globally with a focus on China because we knew that was the opportunity long before we met S’Young.

For them, they were looking for a partner with the opportunity to grow. It’s a long-term game, not a short-term one. That was the match. Every banker says to you that there are Chinese strategics and funds that are all looking to acquire. But if you ask people how many deals they’ve done with Chinese acquirers, it’s very few. That’s because there’s a lot that’s different about the process culturally like the length of time expected in dealing with principles as opposed to dealing through advisors.

To the credit of my team, the S’Young team and our financial advisors, the fact that we did this deal in the middle of a year where everyone was like, “There’s a deal drought,” speaks to both sides learning a lot along the way about each other.

Do you think we’ll see more Chinese strategics swooping acquiring American beauty companies?

Private equity, Chinese strategics and domestic global companies like L’Oréal and Estée Lauder are all looking at how they grow in China now. There are a few things happening in China. One is the rise of domestic Chinese power brands that are going to go global like Documents or Florasis, for example. There’s also a Chinese makeup artist brand called Mao Geping Cosmetics that has a $3 billion valuation. Nobody in the U.S. knows about it.

All companies, whether they’re China-based or global that have big businesses in China, will be trying to figure out, how do we do China next? Do I take a small brand and blow it out if Chinese customers love it? Is the whole indie thing coming to China?

The other thing that was very interesting to the Chinese about RéVive is the doctor story. They love performance, but they also love luxury. So, it’s not only La Mer or La Prairie. There’s American doctor performance claims and the products really work. All of those things come together that are important in the Chinese market.

Gregory Bays Brown, the doctor founder of RéVive, during a press event in China last year after the nearly 30-year-old luxury skincare brand was acquired by beauty conglomerate S’Young Group.

Do Chinese strategic buyers value different things in acquisition targets than European or American strategic buyers?

No. Everyone asks themselves: Do I think the brand has longevity? Can it be profitable? Is it accretive to the rest of my portfolio?

Throughout the rest of world, people will say, OK, if the market’s growing at six and we can grow at 20, that would be great. But there’s a different expectation on growth with China because it’s so e-commerce focused. I think people are like, I could grow 40% next year. Domestic e-commerce in China now is also difficult though for very developed brands as well as expensive and promotional.

I also think that the power of social selling and virality with an audience of 1.6 billion people is different than with an audience of 350 million. It’s four times more viral.

When you’re a luxury brand in the U.S., you’re very focused on marketing and targeting a consumer who believes in the power of science, who is willing to pay more to take care of their skin. But there are a lot of Americans who believe the mass market is just as good.

That mindset doesn’t really exist in China. They don’t have this mix of mass and class from a consumer perspective. It’s much more divided, which in a way allows for more marketing efficiency. You’re not trying to take on everyone. You’re very focused on your segment and your channel.

M&A didn’t have the blockbuster 2024 that was predicted. Why has it become harder for founders to achieve the exits they want?

There are two things happening. One, with all due respect, there’s too much beauty news media. The reason why I say that is I think there’s a real CNN effect of what good looks like. People only write about there’s this brand that had a billion-dollar valuation, and this deal happened, and everyone thinks that’s what is supposed to happen.

I think there have been bloated times in the beauty transaction market just like there have been bloated times in the stock market. We went through a few of those years already. There have been huge exits for brands who excelled at being early adopters in learning new consumers trends and ways to do business. While it may have been a different way to evaluate the business, people don’t even recognize the value of what was or could have been learned from those businesses.

But what I think now is you have to look at the history of those businesses that sold and see if they ended up paying off for their acquirers. That’s where the right-sizing is coming from. There are as many companies with high valuations being written off corporately or closing as there are succeeding.

Tula was the hottest brand. Is it on anyone’s radar screen today? Rodin Olio Lusso was so cheeky, but after Estée Lauder bought it, it closed. There are as many success stories like The Ordinary as there are failures, but the media doesn’t write about them as often. Then, everybody thinks everything’s a gold ring at the end of the rainbow.

How has the timeline for acquisitions changed?

The horizon is longer. There’s money and there’s brands. They may not be in exactly in the same place and neither may the expectations, but private equity has plenty of money, and they want to put it to use.

There are more brands than ever, which raises the expectations. But the acquisition game is not just once, though. There may be a private equity investment and then a second private equity investment before you get to strategic level. We all look at the success story of a K18 or a Briogeo and think, start to finish, it’s five years from conception to ending with a strategic. That’s the exception more than the rule. I mean, this is RéVive’s third transaction.

RéVive predicts its direct-to-consumer business in the United States and e-commerce in China will be its fastest-growing distribution channels this year.

What are RéVive’s product initiatives this year?

We are focusing on brand heroes. In the U.S., our first launch of the year is Rescue Bomb. It’s a very rich overnight hydration mask that’s also focused on reinforcing and protecting skin barrier strengths, neutralizing antioxidants and protecting against environmental aggressors. From a brand story perspective, the first product we launched at RéVive was a moisturizing renewal cream that focused on how the skin repairs at night. So, Rescue Bomb reinforces that overnight story but also reinforces the rescue story.

In the seven years that I’ve been here, it is by far our fastest-growing launch. It also supports a category within the brand that is our top seller in China, which is our Rescue Elixir. It’s an oil-based product that you can wear alone as a moisturizer, you can add it to a moisturizer, or you can use it as a serum under a moisturizer. It’s among the first six products we registered in China.

What do you think is drawing interest in the skincare category? 

Innovation in product, service events and activations are what is interesting to consumers. People are looking for things that are different and exciting.

The continued merging of health, wellness and beauty will drive elements of the skincare category, especially in the luxury segment. Living longer and better, i.e. longevity care, is an area of interest for RéVive, as is the field of climate change and its effect on the skin and aging.

_{Images are for reference only.Images and contents gathered automatic from google or 3rd party sources.All rights on the images and contents are with their legal original owners.}