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Yatsen Holding Ltd, one of China’s leading beauty companies, released its second quarter earnings report Thursday, which showed quarterly revenue increasing by 53.5 percent to 1.53 billion yuan ($236.2 million) year-on-year. The firm’s non-GAAP net loss was 195 million yuan ($30.09 million), down from 234 million yuan ($36.11 million) in the first quarter.
The NYSE-listed company owns direct-to-consumer (DTC) makeup and skincare brands, such as Perfect Diary, Little Ondine and Abby’s Choice, and acquired British skincare brand Eve Lom earlier this year. Its growth has been fuelled by a massive and highly-sophisticated “private traffic” operation, which sees products marketed to millions of Chinese women via thousands of WeChat groups, each of which numbers 500 members or less.
According to its latest financial report, Yatsen’s DTC customers increased by 13.3 percent to 10.2 million, but marketing costs were down 8.3 percent to 973 million yuan ($150.17 million), a number that still represents 63.8 percent of its total revenue for the quarter.
Jinfeng Huang, founder, chairman and chief executive of Yatsen, said in a statement that the group would be doubling down on investments in R&D and technology. During the reporting period, Yatsen’s R&D expenses amounted to 35.2 million yuan ($5.43 million), an increase of 146.2 percent over the same period last year.
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