Venture Life moves into China's skin care market with 30 year deal

By Michelle Yeomans

- Last updated on GMT

Venture Life moves into China's skin care market with 30 year deal

Related tags Skin care Hong kong

Healthcare brand, 'Venture Life' has signed a 30-year distribution deal with Shanghai based REC Cosmetics; the owner of 1,000 skin care retail chains across mainland China.

The supplement supplier signed the agreement with the subsidiary of Gialen Group, a privately owned business with a team of 10,000 staff that caters to over 300,000 customers on a daily basis.

The deal will initially consist of 15 skin care products in China, Macau, Hong Kong and Taiwan, and will include some anti-ageing products from Venture's existing portfolio.

For the launch, contractual annual minimum purchase obligations (MPO) have been agreed, which are worth approximately RMB 52.8m (£5.7m) in sales for Venture Life over the first five years after product registration, including RMB 8.5m (£0.9m) during the first year after registration.

Over the full term of the agreement, the total MPOs are reported to be worth approximately RMB 371m (£40m) in sales for the supplement supplier.

Venture also has foothold as the exclusive manufacturer and supplier to REC for all current and any future products as part of the agreement.

Venture: Deal represents 'a strong appetite for our products in China'

According to chief executive Jerry Randall; the deal is 'significant' and its' partner is ideal in that it shares Venture's philosophy, ethos and ambition to grow in China.

"The agreement demonstrates that there is a strong appetite for our products in China and the other territories, where the demand for high quality Western products, particularly in skin care, remains strong," ​he says.

Subject to registration approval, the first range will be introduced to Gialen Group's stores in China in the second half of the year.

State of China's skin care market

China became the world's third largest cosmetics market following the US and Japan back in 2012, which analysts attribute to a direct relationship with the number, income and consumption concepts of China's young females.

L’Oréal is currently the leading cosmetics player with a market capitalization of about $98 billion and has been particularly aggressive in expanding its market share in Asia. 

In China alone, the brand reported sales of over $2 billion in 2013, which accounts for 9% of the the overall Chinese cosmetics market.

However, the company has faced intense pressure of late from domestic players within the mass-market cosmetics space and has bowed out of the Chinese hair care market by pulling its Garnier brand. 

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