The Chinese company is a leading player in the Chinese cosmetics market and owns several brands including Perfect Diary, Pink Bear, DR.WU and Eve Lom.
The company, which had previously broken records on Tmall, observed a drop in sales on the Chinese e-commerce platform, which accounted for 40% of the company’s sales.
Conversely, Yatsen is seeing an increase on Douyin, the short-form video-sharing app known and sister of Tiktok.
“Douyin, at the moment, is becoming a very important factor for the growth of the brand”,said Huang Jinfeng, founder, chairman and CEO of Yatsen Holdings.
“We see that the percentage is going down [on Tmall] and our percentage of live broadcast, especially in Douyin, is increasing. Looking ahead, we believe this trend will continue as well. “
For about three months, the company has taken the opportunity to optimize its sales in Douyin.
“If you look at the recent development of the Perfect Diary ranking in Douyin, the Perfect Diary ranking is increasing very quickly. If I remember correctly, Perfect Diary ranks around number 3 or number 4 in Douyin color cosmetics ”, Huang said.
Douyin has also been instrumental in helping its new skin care brands gain traction in the market.
“We see that the first step in Douyin sales comes mainly from discounts. If you look at some of the skin care brands, Douyin’s first stage benefit of live broadcast development is a very big discount for their skin care products ”, Huang said.
He added that the company is committed to investing more in the chain.
Meanwhile, the competition for Tmall has intensified, especially on Singles Day, the mega shopping festival that takes place on November 11.
This year, the company faced competition from aggressive promotional and discount activities from global brands.
“We have seen that many prestigious foreign color cosmetics brands have offered significant discounts, very significant discounts for their products.” said CFO Yang Donghao.
For example, he explained that a certain global brand in the masstige space had “buy one, get one free” offers to generate sales.
Additionally, these brands have also partnered with Chinese live streaming influencers such as Li Jiaqi and Viya, both of whom are known to be very effective sellers.
During this year’s Singles Day pre-sale live broadcast session on October 20, the couple collectively sold around 19 billion RMB (US $ 3 billion) in merchandise in the first 12 time.
Huang said the combination of aggressive discounts and the use of key influencers “significantly impacted ” company sales.
Perfect Diary, which was ranked 11ein the top 20 charts for Tmall’s Singles Day last year, eventually found himself completely off the charts this year.
However, Huang added that international brands could not expect to benefit from this approach in the long term.
“I think this will not be a sustainable tactic on the part of global brands, as it will significantly damage their premium brand image.”
He also noted that this company has been striving to gain more shares since Singles Day, as sales of global brands started to return to normal levels.