I’ve often heard Perfect Diary referenced as a China success case. I decided to look into things further, and what I found was a bit shocking.
Sure, they have had a 70% increase in revenue… BUT with a loss of nearly 2.7 Billion RMB do they REALLY deserve to be called a success case?
Where the H*LL is all the money being spent?
- Aggressive acquisition: Over the past several months, the company has acquired several skin care and beauty brands.
- Excessive marketing expenses: From 2018 to 2020, total marketing expenses increased from RMB 700M to RMB 3.38 B, and RMB 7.23 B respectively. As of September 2020, Yatsen Global has actively partnered with more than 15K KOLs, of which 800+ have 1M+ fans each.
And unfortunately, all of this money spent seems to be funneling low quality products into the market. Customer reviews on products AND service have been less than stellar.
My question is this… Why spend so much money to buy traffic while delivering low quality products? Can this still be seen as “healthy growth”?
Not exactly what I’d call a “success case.” What do you think?