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Shiseido Fund Invests in Chinese Biomaterials Maker

The Shiseido Beauty Innovations Fund is pouring about 100 million renminbi into Trautec.

PARIS — The Shiseido Beauty Innovations Fund has unveiled its first investment — into a Chinese maker of recombinant collagen-based biomaterials.

The China-focused fund, with Shiseido as its lead investor, is pouring close to 100 million renminbi, or $14.5 million, into Jiangsu Trautec Medical Technology Co. Ltd. It is a company that produces materials primarily for use in the medical and cosmetics industries.

The Japanese beauty giant said it also will partner with Trautec to work on product research-and-development, raw material supply and sales channels to speed up research into new areas of functional skin care — which is related to sensitive skin, aging care and clean beauty.

The beauty industry is increasingly focused on and investing in biomaterials, as the greening of the business and functional skin care are in increasing high demand.

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“The market of functional skin care, which offers specific functions to skin, is growing significantly, as more Chinese consumers are looking for effective solutions to their skin problems,” Shiseido said in a statement. “The needs for recombinant collagen are expanding because of its stability and effectiveness, as well as wide application to medical, health care and cosmetics fields.”

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Trautec, which was established in 2015, operates everything from R&D to manufacturing and distribution. It holds numerous intellectual property rights in the development of recombinant collagen and owns a production facility in Changzhou, in Jiangsu Province, China.

In August 2021, Shiseido revealed the launch of the Shiseido Beauty Innovations Fund with Boyu Capital to explore investment opportunities in China’s emerging cosmetics and wellness brands, and in related technology, such as e-commerce.

China is a prime focus for all major beauty companies today, as the country’s emerging middle class has a keen appetite for skin care, makeup and — more recently — fragrance.

In 2020, China became the second-largest beauty and personal care market worldwide for the first time, according to Statista. Japan took third place that year.

Shiseido began trading in China in 1981 by importing and selling its products in Beijing. That led to the group expanding its business in the country to include R&D, production and distribution. China is now home to Shiseido’s second headquarters.