Nimble Chinese beauty start-up Perfect Diary woos consumers with low prices and a strong social media presence
- Helped by its presence on Douyin – the Chinese TikTok – and influencers such as ‘Lipstick King’ Li Jiaqi, Perfect Diary has become China’s No 3 cosmetics brand
- A start-up launched just four years ago, it has won over patriotic Gen-Z consumers with its low prices, responsiveness to their needs, and basic product range
Through chat groups, video streams and low prices, China’s Perfect Diary emerged from nowhere four years ago to become a cosmetics giant for the digital age. It trails only L’Oreal and LVMH in the world’s No. 2 market for make-up.
She converted to Perfect Diary after a roommate’s tip. “The foreign brands have a large variety of foundations that often confuses me and I can’t tell which one is best on me … the Chinese brand knows what is good for local consumers.”
The research firm estimates the overall market more than doubled to nearly US$8 billion from 2015 to 2019 – and that it will grow to almost US$15 billion in 2024 as China’s middle class expands.
Yelling his catchphrase “All girls, buy it!”, Li has given Perfect Diary products rave reviews in popular live-streams on giant e-commerce retailer Alibaba’s Taobao platform. Alibaba owns the South China Morning Post.
Analysts said Perfect Diary’s rise has been boosted by the willingness of younger, Generation Z consumers to embrace home-grown products.
“Gen Z is growing up in a prosperous China,” said Mei Xin, analyst at Huatai Securities. “Unlike the older generation, they don’t believe the moon in the West is rounder than in China.”
A spokesman for L’Oreal in China didn’t immediately respond to a request for comment on the growth of home-grown brands, but said L’Oreal typically welcomes healthy competition.
Founded by entrepreneur Huang Jinfeng’s Yatsen E-Commerce firm in 2017 as an online, China-focused operation, the company now has more than 150 stores in China – with a target of 200 this year – as well as international aspirations.
“Yatsen E-Commerce has always had a vision of creating a domestic beauty brand with true international influence,” Huang said.
Perfect Diary currently uses contract manufacturers including Italy-headquartered Intercos, which has a factory in China that supplies L’Oreal and others. Since March, it been building its own plant in Guangdong, due on line by the end of 2021.
Perfect Diary doesn’t disclose financial performance or liabilities, nor say whether it’s profitable. Yatsen is currently raising a pre-IPO round of financing that values it at around US$4 billion, according to two people with direct knowledge of the matter.
One person said the IPO valuation could likely reach US$5 billion – big, yet dwarfed by L’Oreal’s more-than-US$180 billion market value. The people declined to be named because the information was not public. Perfect Diary declined to comment on IPO plans.
Meanwhile, student Wen continues to add lipsticks and foundations to her Perfect Diary make-up kit.
“I don’t care much about the originality of a brand,” she said. “I didn’t know Perfect Diary was a Chinese brand the first time I bought it. But now I know, I have a natural good feeling about using a domestic brand.”