(Yicai Global) May 9 -- L'Oreal Group has set up its first investment vehicle in China in a move that may be a sign of a strategic shift by the French cosmetics giant, which has been in the Chinese market for 25 years, from acquisitions to investments, according to industry insiders.

Shanghai Meicifang Investment was registered with CNY100 million (USD15 million) of capital on May 5, according to data platform Qichacha. Its business scope encompasses asset management services, investment management and investment in start-ups.

The new company, based in Fengxian district, is the first investment firm set up in Shanghai by a Fortune Global 500 multinational during the resumption of production in the Covid-hit city, Fabrice Megarbane, president of L'Oreal North Asia and chief executive for China, said yesterday.

It is supported by BOLD, or Business Opportunities for L'Oreal Development, a venture capital fund L'Oreal uses to invest in innovative tech firms with high potential in digital services, marketing, data, supply chains and packaging.

Three types of cosmetic start-ups will be key targets for Meicifang Investment, namely start-up brands, technology projects, and enterprises with potential in new cosmetic technology services, L’Oréal said.

L'Oreal China had double-digit growth in the first quarter, above the average level in the domestic cosmetics market, thanks to activities during the Chinese Spring Festival holiday and Women’s Day, Megarbane said.

The company believes Shanghai has partially overcome the recent outbreak of Covid-19 in the city, and it expects normal production to resume soon.

Editor: Tom Litting