Warm congratulations to Yatsen Holding, parent company of Perfect Diary, on its successful NYSE listing | Gaorong Ventures News

On November 19, Beijing time, Yatsen Holding, parent company of Perfect Diary, officially listed on the New York Stock Exchange under the ticker "YSG," becoming the first Chinese beauty group to go public on a US exchange. The IPO priced at $10.50 per ADS, with a total of 58.75 million American Depositary Shares issued, giving the company a pre-market valuation of approximately $7 billion.

Founded in 2016, Yatsen Holding currently owns four high-growth color cosmetics and skincare brands: Perfect Diary, Little Ondine, Abby's Choice, and the French heritage premium beauty brand Galénic. Its official accounts across all platforms have amassed over 48 million followers.

Gaorong Ventures Led Early Round and Stood Firm — Witnessing the Rise of an Infrastructure-Level Company

Gaorong Ventures led Yatsen Holding's funding round in early 2018 and continued to invest in multiple subsequent rounds. Rui Han, partner at Gaorong Ventures, said: "Warm congratulations to Yatsen Holding on its successful NYSE listing! In just four short years, Yatsen has successfully launched and now owns four rapidly growing new beauty brands. In fact, when we participated in the company's early-stage investment, they already articulated a vision to become an infrastructure-level company in the industry and to build a brand group. We are deeply honored to have been part of the critical milestones in their journey, witnessing them turn their original aspirations and vision into reality."

Jinfeng Huang, founder and CEO of Yatsen Holding, said in his listing ceremony remarks: "Going forward, Yatsen Holding will forge ahead with determination, continuously creating greater value for our users. With the mission of 'creating an exciting new journey of beauty discovery for consumers in China and around the world,' Yatsen Holding is advancing toward its strategic goal of becoming a 'new-era beauty brand incubation platform.'"

Notably, the bell-ringing ceremony that evening was not performed by the company's senior management, but rather by co-creators of the Yatsen ecosystem — representatives of loyal users, KOLs, investors, supplier partners, and employees. Huang said they best embody Yatsen Holding's entrepreneurial original intention and business ecosystem. Through this special ceremony, Yatsen Holding wished to express its sincere gratitude to them, while once again practicing its core philosophy of "creating value for users, partners, and employees."

"The most important quality of the Yatsen team is their steadfast commitment to values," Han said. "When we invested in Yatsen, the brand was still on the eve of its breakout. Beyond observing differences in key metrics, we saw a fundamentally different kind of team — one that 'can see the summit clearly, find the right allies, tread the correct path, and resist temptation,' with exceptional ability to iterate. David, Vincent, and John (Jinfeng Huang and co-founders Yuwen Chen and Jianhua Lü) possess a well-developed sense of temporal and spatial perspective, a holistic view, and a culture of candid, transparent communication. They never compromise between consumer interests and the company's long-term development. We are grateful to Yatsen for giving us the opportunity to continue this journey together."

DTC + Data-Driven, Building a Beauty Brand Incubation Platform

Over the past few years, Yatsen Holding has continuously built out its beauty brand portfolio. Born in 2017, Perfect Diary was Yatsen's first color cosmetics brand. With the brand philosophy of "Beauty Without Limits, Within Reach," Perfect Diary is dedicated to developing a range of high-quality, thoughtfully designed, easy-to-use makeup products for the new generation of women, rapidly growing into a leading emerging domestic color cosmetics brand. In 2020, Perfect Diary's cumulative Double 11 sales exceeded 600 million yuan, maintaining its top position in Tmall's color cosmetics category.

At the same time, Yatsen Holding has accelerated the integration of online and offline channels. As of September 30, 2020, Yatsen had established over 200 Perfect Diary offline experience stores across more than 90 cities in China.

In June 2019, Yatsen acquired the trendy color cosmetics brand Little Ondine. Within eight months of its relaunch, Little Ondine reached the sales level that Perfect Diary had achieved in its twelfth month. The strategic new brand Abby's Choice, launched this past June, shortened that timeline further to just three months.

Additionally, on October 30 this year, the company signed an agreement with Pierre Fabre, one of Europe's largest dermocosmetics and pharmaceutical companies, to acquire its premium beauty brand Galénic, while establishing a long-term strategic partnership with Pierre Fabre in product R&D and manufacturing.

Financially, Yatsen Holding's total sales in 2019 reached 3.5 billion yuan, a year-over-year increase of 363.7% from 758 million yuan in 2018 — roughly 30 times the growth rate of China's overall beauty market during the same period. In the first three quarters of 2020, total sales were 3.8 billion yuan, up 70.2% year-over-year. Gross margins were 63.5%, 63.6%, and 63.1% for 2018, 2019, and the first three quarters of 2020 respectively.

In its prospectus, Yatsen Holding attributed these results to its DTC (Direct-to-Customer) and data-driven (Digitally Native) business model, as well as its deep insights into the beauty needs of Gen Z and millennial consumers. With this model, Yatsen can complete the process from concept to development to launch for new products within six months, far below the 7 to 18 months typically required by international brands. In 2019 and the first three quarters of 2020, Yatsen launched approximately over 1,500 new SKUs across eye makeup, lip makeup, base makeup, tools, gift sets, and skincare categories.

Embarking on a New Journey Together, Creating a Better Life for Consumers

In its prospectus, Yatsen Holding stated that its future development will continue to focus on strengthening its highly socialized, digital marketing capabilities and building its proprietary KOL system. Meanwhile, Yatsen will continue investing in technology R&D and enhancing data analytics capabilities. The company plans to increase investment in big data analytics and artificial intelligence technologies to expand its platform's leading advantage and further improve customer experience. Leveraging robust technological capabilities, the company will deepen and accelerate data collection and analysis, thereby optimizing all aspects of future business operations, with the aim of building a future-oriented beauty brand incubation platform.

Han said, "We believe that as Yatsen Holding continues to solidify its team, infrastructure, and proven brand incubation capabilities, it will continue to lead the way in building a new-era brand group. Going forward, we sincerely wish the company continued progress toward its early goals and the realization of its dreams, creating greater value for consumers and the industry."

As China's consumer market gradually becomes the world's largest single market, Gaorong Ventures continues to identify investment opportunities in new e-commerce, new retail, new brands, and new consumer infrastructure. In recent years, Gaorong Ventures has invested in a portfolio of high-growth leaders in the consumer sector including Pinduoduo (NASDAQ: PDD), Yatsen Holding (NYSE: YSG), Roborock (688169.SH), NYSE: ZEPP, Dingdong Maicai, Genki Forest, Poizon App, and Qian Damamong others.

Driven by generational turnover — the primary force behind structural shifts in consumption — Chinese consumer entrepreneurship continues to hold enormous opportunity. Especially now, as we enter a truly new era of two-way communication with consumers, Chinese consumer startups can engage in direct user insight, combined with China's accumulated supply chain advantages. The number of international consumer brands emerging from China will only grow. Going forward, Gaorong Ventures will continue seeking redefiners of industries and reshapers of value chains in the consumer space, working together to create a better life.