Cosmetics entrepreneur Huang Jinfeng joined the world’s billionaires ranks after his magnificence and e-commerce startup Yatsen Holding went public within the U.S.
The Guangzhou-based firm, which operates the Excellent Diary, Little Ondine and Abby’s Selection magnificence manufacturers, noticed its shares surge as a lot as 75% in its buying and selling debut on the New York Inventory Trade. The corporate, which raised $617 million via its preliminary public providing, now has a market worth of $7.eight billion. Cofounder and CEO Huang, 37, has a internet price of $Three billion that’s derived from his 25% possession within the firm, in line with Forbes estimates.
Based simply 4 years in the past, Yatsen managed to face out in China’s magnificence market via aggressive pricing and a savvy social media technique. It cuts out distributors to promote merchandise like eye shadow for $4.5 and eyeliners on to younger customers. The corporate works with celebrities and influencers to market them on social media platforms such because the quick video app Douyin and China’s twitter-equivalent Sina Weibo.
Whereas such digital advertising and marketing isn’t new, Yatsen has turn into a frontrunner and a “worthy competitor” to extra established western manufacturers like L’Oreal, says Sofya Bakhta, an analyst at Shanghai-based analysis agency Daxue Consulting.
“It shortly constructed model consciousness and fame within the native market,” she says. “The model gives very inexpensive costs, does robust advertising and marketing, and on high of that, it’s a Chinese language home model, which evokes pleasure and patriotic emotions among the many Chinese language prospects.”
Final 12 months, Yatsen’s revenues surged virtually 5 instances to $446 million from 2018, in line with its prospectus. However the firm isn’t proof against the pandemic. Its 200 brick-and-mortar shops had been as soon as compelled to shut amid strict quarantine guidelines, and it nonetheless faces weaker shopper sentiment and spending because the Chinese language economic system step by step recovers.
What’s extra, as Huang seeks to interact buyers higher by stepping up advertising and marketing spending, Yatsen reported a lack of $170 million for the 9 months ending on September 30, 2020–in contrast with a revenue of $4.Four million in the identical interval a 12 months in the past. Revenues grew 73% to $482 million, a slower-than-expected price that the corporate attributed to the damaging affect of Covid-19 , in line with its prospectus.
However Huang seems to have the expertise to climate unfavorable market circumstances. After graduating with a bachelor’s diploma in worldwide commerce and graduating from Solar Yat-sen College in 2007, he labored as a market analysis supervisor at P&G in Guangzhou for 4 years. After leaving P&G, Huang labored because the vice chairman of Hunan Yujiahui Cosmetics, which is finest identified for the Unifon skincare model, for 5 years till 2016, the corporate’s prospectus exhibits.
It was additionally in 2016 when the entrepreneur determined to arrange Yatsen Holding, which was named after his alma mater Solar Yat-sen College. The opposite two cofounders, chief working officer Chen Yuwen and chief gross sales officer Lyu Jianhua, are Huang’s school mates, in line with native media reviews. Each additionally amassed appreciable quantities of fortune: Chen’s 7.6% stake is now price $929 million and Lyu’s 3.5% stake $425 million, in line with Forbes estimates.