THE WHAT? Yatsen Group is pausing further brand acquisitions to concentrate investment on its existing skincare portfolio, which now accounts for more than 70 percent of the Chinese cosmetics group’s revenue.
THE DETAILS Quarterly skincare sales reached RMB 816 million (US$122 million), compared with skincare representing just 12 percent of group revenue when Yatsen listed in 2020. The company has transformed its portfolio through acquisitions including Galénic and Eve Lom and the mainland China rights to Dr Wu, while investing more than RMB 700 million in R&D since 2020. Yatsen now plans to direct capital towards product formulation and organic brand growth rather than further acquisitions. However, profitability remains under pressure, with second-quarter net losses widening to RMB 90.8 million as sales and marketing expenditure increased 11.8 percent to RMB 807.6 million, while colour cosmetics revenue declined more than 35 percent.
THE WHY? The strategy marks a shift from acquisition-led portfolio building towards organic growth, R&D and greater integration between Yatsen’s skincare and colour cosmetics businesses, including plans to bring skincare ingredients and technologies into Perfect Diary make-up products.
Source: Retail News Asia
