On a recent episode of Bloomberg’s China Show, David (Jingfeng) Huang, Founder, Chairman and CEO of Yatsen Holding Ltd.offered a revealing look into how the Chinese beauty tech company is evolving from a trend-savvy startup into a global innovation leader.
From a growing portfolio of brands to deep investments in science and R&D, Huang positioned Yatsen as a rare hybrid—both agile and deeply rooted in long-term thinking. His message was clear: beauty is being redefined, and Yatsen intends to lead the next era.
A Vision to Build a Tech-Driven Beauty Powerhouse
Founded in 2016, Yatsen first captured attention through Perfect Diary, now a mainstream brand in China. Since then, the company has expanded to 11 brands, spanning mass, masstige, and premium tiers.
Its lineup includes France’s Galenic, focused on cellular anti-aging, the sensorial British skincare brand EVE LOM, and dermatologist-backed Dr.Wu. Together, these brands reflect a deliberate strategy: address varied consumer needs with credible, differentiated propositions.
“Our vision was always to build a next-generation beauty tech company,” Huang explained. “From trend-driven to science-backed, we now offer products across all major segments what unites them is innovation.”
China’s Beauty Consumers: Smart, Selective, and Innovation-Hungry
The domestic beauty market in China is vast valued at over RMB 400 billion—yet remains fragmented. Even the top players only command single-digit market shares, giving agile innovators room to grow.
Despite recent macro challenges, Huang is confident: “Chinese consumers are still highly willing to pay as long as the product truly delivers.”
That belief led to one of Yatsen’s breakout hits: the Biolip Essence Lipstick. Priced similarly to global luxury brands, this hybrid product combines high-performance color with skincare benefits, including patented ingredients that stimulate collagen and reduce lip wrinkles.
“It’s not just makeup. It’s biotech in a lipstick,” Huang said. “And the market responded we’ve seen strong repurchase and loyalty.”
Science-Led Premiumization: A Strategic Pivot
Yatsen’s transformation goes beyond branding. In 2021, the company initiated a strategic shift: lean harder into skincare, R&D, and innovation-led premiumization. The move was both ambitious and risky, as it involved restructuring operations, reallocating capital, and riding out a tough market cycle.
“Turning around a public company isn’t easy,” said Huang. “But we knew where the market was going—toward science-backed, benefit-driven beauty. We invested over USD 80 million in R&D, filed 240+ patents, and published in top-tier journals like Nature Medicine and Science Bulletin.”
He added that 3% of Yatsen’s revenue is now allocated to R&D putting the company among global leaders in innovation spend ratio in the beauty category.
Profitability Resumed, Market Confidence Growing
While Yatsen’s stock price has yet to return to IPO levels, Huang emphasized the fundamentals are stronger than ever.
“Since last quarter, investor feedback has been increasingly positive. But more important than sentiment is performance—we’ve resumed profitable growth, with a long-term focus on value creation,” he said.
The turnaround, built on disciplined brand building and product innovation, has earned Yatsen growing respect among long-term investors.
“We believe the equity market is a weighing machine over time. Our job is to do the right things R&D, great products, strong brands and the value will follow.”
Resilience in a Volatile Global Landscape
Huang also addressed concerns around trade and supply chain disruptions, particularly in light of global tariff tensions.
While the beauty industry is highly globalized, Yatsen has insulated itself well. Most of its components and ingredients are sourced domestically, and its primary market remains mainland China.
“We’re not immune, but we’re well-positioned,” he said. “We monitor risks—supplier stability, cross-border issues—but our current exposure is manageable. Still, we stay agile.”
When asked whether cost increases from potential tariffs would be passed on to consumers, Huang pointed to the brand’s focus on delivering value, not just price.
“Consumers are smart. Post-COVID, they’re more price-sensitive, but they’re not chasing the lowest price. They want high value—products that justify their cost.”
A Different Playbook From Global Competitors
Huang believes that Yatsen’s unique blend of local insight and global scientific ambition sets it apart from multinationals struggling to regain ground in China.
“We’re not just following trends we’re deeply embedded in where Chinese consumer preferences are heading,” he said. “Biotech, neuroscience, ingredient innovation this is where we’re betting big.”
Yatsen is already seeing results from this strategy with loyal followings for products under brands like Galenic and high-performance serums featuring vitamin A and C.
In a nod to its future direction, Huang revealed that Yatsen is now exploring neuroscience applications in skincare—a niche with massive long-term potential.
Capital Strategy: Transparency, Optionality, and Growth
On the capital markets front, Huang acknowledged investor concerns around ADR delistings and so on. But Yatsen is taking a disciplined, transparent approach.
The company completed a USD 200 million share buyback, reinforcing confidence and alignment with shareholders.
Yatsen represents a rare blend of scale, agility, and innovation depth. With proven market traction, a science-led product pipeline, and a profitable operating model, the company is positioned to capture long-term share in a fragmented, fast-evolving industry. In terms of Yatsen’s vision, “We’re not just making beauty products,” Huang concluded, “We’re inventing the future of beauty—and we’re just getting started.”
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