LONDON — Yatsen Holding Limited, the owner of Tmall’s best-selling cosmetics brand Perfect Diary, saw its gross sales for the first quarter ended March 31 jump 47 percent year-over-year to 1.69 billion renminbi, or $257.3 million.
The Guangzhou-based company’s net revenues in the period increased 42.7 percent to 1.44 billion renminbi, or $220.5 million, while gross profit rose 58.8 percent to 991.6 million renminbi, or $151.3 million, pushing the quarter’s gross margin up to 68.6 percent from 61.7 percent a year ago.
Net loss in the first quarter widened to 319 renminbi, or $48.7 million, from 191.7 million renminbi in the first quarter of 2020, making the net loss margin rise from 18.9 percent to 22.1 percent year-over-year.
Selling and marketing expenses almost doubled in the period from 556.9 million renminbi in 2020 to 1.04 billion renminbi, or $159.1 million. As a percentage of total net revenues, selling and marketing expenses increased to 72.1 percent from 55 percent year-over-year.
Yatsen said the increase in percentage was primarily due to “investment in promotions and consumer awareness-building for the newer brands,” and “testing of the effectiveness of new traffic acquisition channels.”
The number of direct-to-consumer customers increased by 11.6 percent to 9.6 million in the period year-over-year. The average net revenue per d-to-c was 112.9 renminbi, up 24.5 percent from the first quarter of 2020.
Jinfeng Huang, founder, chairman, and chief executive officer of Yatsen, said growth in the quarter was mostly driven by its flagship Perfect Diary. The launch of the mass-market cosmetics brand Pink Bear, and the acquisition of Eve Lom and Dr. Wu’s mainland China business this quarter propelled its brand portfolio expansion.
He was pleased to see that brand premiumization and disciplined pricing and discount policies are boosting the company’s revenue per d-to-c user and gross margin.
“While we are still in the early stages of integration for our newly acquired brands, we already saw signs of success with the relaunch of certain hero products within the Galénic and Dr. Wu portfolio,” he added.
For the second quarter of 2021, the company expects total net revenues to grow around 50 to 55 percent.