British-Dutch consumer giant Unilever has signed an agreement to buy Japanese skincare company Tatcha, for an undisclosed sum.

Tatcha will join Unilever’s stable of niche beauty brands that include: REN, Kate Somerville, Living Proof, Murad and Hourglass.

What Tatcha acquisition says about Unilever

Tatcha was founded a decade ago in San Francisco by Vicky Tsai. According to a report by Bloomberg, investment bank Bryan, Garnier & Co estimates Tatcha’s 2018 sales to be $70 million.

Earlier this year Unilever added French niche brand Garancia to its portfolio, and in 2016, it acquired men’s grooming brand Dollar Shave Club.

What these acquisitions suggest is that Unilever is targeting younger, more engaged consumers who are willing to spend more and focus on specific products and ingredients.

According to GlobalData’s 2018 consumer survey, 65% of consumers who are 25-34 years of age are willing to pay more for better quality and almost 71% of consumers in this age group consider, ‘how well the products tailored to their needs and personality’ as having the greatest influence on their product choice.

Personal care market

This acquisition may be small but it marks a positive step in strengthening Unilever’s place in the global personal care market.

As consumers are willing to pay more for natural and environmental-friendly products, Unilever’s acquisition of Tatcha may mark a significant step in capitalising on this trend that may prove beneficial for both companies.