Founded in 2017, Chinese cosmetics brand Perfect Diary has just obtained USD 150 million from a pool mainly composed of American investors. With this new fundraising, the brand, which emerged from the Chinese digital ecosystem, is valued at USD 4 billion. Has China finally found its first global beauty brand?
Few Chinese cosmetics brands can boast catching the Western press’s attention as much as Perfect Diary (完美日记). The young brand actually achieved an outstanding performance in China: on November 11, 2018 Singles’ Day, a little over a year after it was launched, Perfect Diary got ranked first among Chinese makeup brands. In 2019, the sales on that special day dedicated to singles reached RMB100 million in 13 minutes on Tmall, overtaking global brands like L’Oréal and Maybelline.
Perfect Diary mainly targets Generation Z young women aged 18-28, who are more interested in national brands than previous generations. The brand quickly managed to stand out with an innovative online marketing strategy.
According to China-based consulting agency Daxue Consulting, beyond promoting the brand on general social platforms Weibo and WeChat, Perfect Diary also takes advantage of the Xiaohongshu community, where 50% of users are less than 30, and of Bilibili: 80% of its users were born in the 1990s. In addition, they partnered with celebs and KOLs in line with the brand, as could be seen with Li Jiaqi, the “Chinese king of lipstick”.
In parallel, Perfect Diary created a KOC virtual character, Xiaowanzi (小完子), who shares characteristics with the brand’s target consumers and plays different roles: beauty advisor, friend, promotional information supplier, and customer service in real time. This virtual KOC helps the brand build closer relationships with customers and convert public traffic into private, less expensive traffic.
“The Perfect Diary strategy is a textbook case to learn how to get rid of marketplaces,” says Daxue Consulting. “They take advantage of the KOL strategy and create brand recognition on social media platforms to boost the purchase desire. Then, they integrate these external resources to their private traffic pool on WeChat, which encourages customers to re-purchase their products and become loyal.”
And yet, in an interview in the Forbes magazine, Vincent Chen, co-founder of Yatsen Global, Perfect Diary’s parent company based in Guangzhou, insists upon defining the brand’s basics: “You don’t build up a reputation thanks to marketing, but by maintaining consistency between word-of-mouth and product quality. The ‘product power’ drives the development and growth of Perfect Diary.”
The brand’s manufacturing partners are mentioned on the website: Italian company Intercos and Korean company Cosmax. According to Reuters, Perfect Diary will open their own manufacturing site in Guangdong by late 2021.
Available for affordable prices, Perfect Diary makeup products are well-adapted to social media sharing. Riding the wave of young Chinese people’s taste for cultural consumer goods, Perfect Diary signed collaborations with the London British Museum and the Metropolitan Museum of Art in NYC. These agreements led in particular to a limited edition of eight lipsticks showcased in packaging which evoked playing cards depicting royal portraits belonging to museum collections, including Louis XIV, Queen Victoria, and Napoleon.
In the same playful, photogenic spirit, Perfect Diary contacted the Discovery and National Geographic China channels to create eyeshadow palettes inspired from the savannah fauna and Chinese landscapes.
According to co-founder Vincent Chen, Perfect Diary’s online/offline model was one of its main advantages when dealing with the effects of the COVID-19 pandemic. When physical stores had to close, shop assistants turned into live streaming hosts. “Last February, the number of Perfect Diary live streaming sessions hosted on Alibaba’s Taobao platform rose by 28% compared to January, and sales increased by about 170%,” he explains in his interview to Forbes.
Currently present in the largest Chinese cities, Perfect Diary aims to open 600 stores across China over the next three years to cover all city categories. “This year, our programme to launch 200 stores will be focused on mid-sized cities,” Vincent Chen announces. Yet, he acknowledges that “e-commerce still accounts for most of our sales”. However, he believes that “physical stores will become a key segment for Yatsen Global and will experience the fastest growth in the years to come.”
In June 2020, the group announced they were about to launch a new, skincare-oriented brand called Abby’s Choice. They also confirmed their global ambitions. According to the Chinese press, the new USD140-million fundraising is a prerequisite to soon become listed on the New York Stock Exchange. Will Perfect Diary make up for the lack of Chinese beauty, fashion, and lifestyle brands on the international level, when this is so beneficial to soft power and to seducing a country? This lack is all the more significant given the success of Japanese and Korean brands.