(Yicai) June 19 -- Joy Group has acquired skincare brand Biophyto Genesis, the Chinese cosmetics maker said. Industry insiders anticipate further mergers and buyouts in the sector.

Shanghai-based Joy, whose portfolio includes the affordable makeup brand Judydoll, is optimistic about the long-term growth potential of the skincare business, President and Chief Executive Liu Hui said on the company’s official WeChat account yesterday.

Founded in 2012, Biophyto Genesis develops products for people with sensitive skin. Co-founder Li Yuanhong has over 20 years of clinical experience in public hospitals and runs the firm’s research and development unit.

Li will remain as chief product officer after the buyout, Joy said, and will lead the process from R&D to design, clinical validation, and product launch. Sun Hui, co-founder and CEO, will serve as honorary lifelong advisor.

A new wave of mergers and acquisitions may be in the offing for China’s beauty market, according to industry insiders. The sector is undergoing “extreme polarization,” with leading businesses having secured clear competitive advantages, while small and mid-sized players are under intense pressure, they said.

“In terms of the strategic development of leading enterprises, M&As have proven to be a viable path,” Bai Yunhu, a veteran cosmetics industry analyst, told Yicai.

Some sources in the industry have speculated that Joy’s acquisition of new businesses over the past two years may herald an initial public offering of shares by the company.

Joy’s revenue climbed 36 percent to CNY3.5 billion (USD487 million) last year. Judydoll, its main brand, accounted for more than CNY2 billion of that, and now has the largest share of the domestic makeup market, the company said.

Editor: Tom Litting