Amazon to invest in Japanese beauty retailer Istyle
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Amazon.com will invest in istyle, the company behind the @cosme review and retail site, gaining access to the Japanese beauty product vendor’s trove of user reviews.
Under the agreement announced Monday, istyle will issue 2.5 billion yen ($18.7 million) in convertible bonds as well as 11.5 billion yen in warrants to Amazon on Sept. 6. If these convertible bonds and warrants are turned into stock, Amazon would become the top shareholder with a 36.95% stake.
Amazon will open a dedicated page, tentatively named @cosme Shopping, on its site, where istyle will provide the latest on beauty products to the e-retailer’s members and sell cosmetics from a wide range of brands.
Istyle has been pushing to merge online and offline sales, setting up a brick-and-mortar store in Tokyo’s Harajusku district. Going forward, Amazon and istyle could collaborate in operating stores using digital tech. The partnership could boost Amazon’s presence in the cosmetic market, where drugs stores and department stores are also formidable players.
Istyle will also issue convertible bonds to investors including leading trading house Mitsui & Co.
Mitsui plans to position the cosmetics business as one of its key growth fields and wants “to broaden access to istyle’s customers and manufacturers,” according to a spokesperson. It intends to leverage its sales network to offer Japanese-made cosmetics in overseas markets.
Questions & Answers
Q.What is the primary benefit Amazon expects to gain from this investment?
What is the primary benefit Amazon expects to gain from this investment?
Amazon will gain access to istyle’s extensive collection of user reviews for beauty products. This resource will enhance its understanding of the Japanese cosmetic market and consumer preferences, strengthening its position in this sector.
Q.How will Amazon and istyle integrate their retail operations following the agreement?
How will Amazon and istyle integrate their retail operations following the agreement?
Istyle will create a dedicated page, tentatively named @cosme Shopping, on Amazon’s site. There, istyle will provide beauty product information and sell cosmetics to Amazon members, merging their online retail offerings.
Q.What is Mitsui & Co.'s strategic interest in this deal?
What is Mitsui & Co.'s strategic interest in this deal?
Mitsui & Co. Aims to position the cosmetics business as a key growth area. They plan to broaden access to istyle's customers and manufacturers, using their sales network to offer Japanese cosmetics in overseas markets.
Q.What proportion of istyle would Amazon own if all bonds and warrants are converted?
What proportion of istyle would Amazon own if all bonds and warrants are converted?
If all convertible bonds and warrants are converted into stock, Amazon would become the largest shareholder in istyle. This would give them a 36.95% stake in the Japanese beauty retailer.
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