Chinese online discount retailer VIPShop (NYSE: VIPs) announced on February 14th that it has acquired 75% stake in Lefeng.com —aka LAFASO, an online beauty and fashion retailer, for USD 132.5 million.
Since VIPShop has been centered on clothing/shoes/bags while Lefeng’s focus is cosmetics, the two companies are complementary. Lefeng was established in 2008 as a subsidiary of Ovation Entertainment Ltd. – The TV show production company was founded in 2000 by Li Jing, a Chinese TV producer and host. Starting from cosmetics retailing, Lefeng later introduced group-buying, discount sales, and fashion clothing.
Not only average cosmetics and fashion brands, Lefeng also sells goods of the founder’s own cosmetics brand and fashion brands by her celebrity friends, actors/actresses, cosmetics professionals, etc. ; it is estimated that those personal brands may be more profitable than third-party cosmetics goods. Jumei is the direct competitor of Lefeng. And Sequoia Capital is the mutual investor of Lefeng, Jumei and VIPshop.