Yatsen Business Model Canvas

Yatsen partners with over 120,000 KOLs and KOCs across mega to micro tiers, driving ~28% of online sales in 2024; internal dashboards track engagement-to-conversion in real time (avg. conversion rate 3.6%), and multi-year contracts yield steady authentic content, lowering CAC by an estimated 18% versus one-off campaigns.

Yatsen outsources to Cosmax, Intercos, Kolmar and cut COGS, supporting ~60% gross margin in 2024; Alibaba, JD, Douyin and Xiaohongshu drive ~55% online GMV; 120k KOLs/KOCs drove ~28% online sales (conv. 3.6%); R&D rose 35% to RMB 420m (5–7 patents target by 2025); logistics spend RMB 1.1bn with ~30% peak lead-time cut.

Managing a complex supplier and manufacturer network is core for Yatsen, ensuring product availability and cost efficiency while targeting inventory turnover of ~8.5x in 2024 to cut waste and speed response to demand shifts.

Yatsen’s key activities: rapid product development via proprietary IT (2–3 months vs 12–18 industry; ~40 launches in 2024; 28% revenue from new SKUs), intensive omnichannel marketing (RMB 1.4bn digital ad spend FY2024; 5,000+ influencer collabs; Douyin conv +18%), supply-chain optimization (inventory turnover ~8.5x 2024), private-domain sales (~30% online orders; repeat +18% YoY), and M&A (US$600m since 2020; premium ~28% revenue 2024).

Yatsen Global Innovation Center houses the company’s R and D labs that produced 18 new patents and 24 SKU formula upgrades in 2024, driving 12% YoY product gross-margin improvement; centers focus on proprietary formulations and recyclable packaging that cut plastic use by 32% per unit and meet ISO and EU cosmetic safety standards. Investing over RMB 220 million (2023–24 capex) in physical R and D keeps Yatsen competitive with global beauty conglomerates.

Yatsen’s key resources: multi-brand portfolio (Perfect Diary ~RMB7.6bn 2023), 60M+ consumer profiles & 1.2bn anon transactions (2024) boosting repeat purchases +18% and marketing ROI +30%, R&D center (18 patents, 24 SKU upgrades 2024; RMB220m capex 2023–24), digital stack driving ~CNY6.2bn online sales (2024), and ~3,200 specialists yielding 38% digital revenue growth (2024).

Through acquired prestige brands, Yatsen delivers high-efficacy skincare backed by clinical research and premium ingredients, targeting the growing skin-intellectual segment that grew ~12% CAGR in China’s prestige skincare market to reach CNY 48.5bn in 2024; these products command higher ASPs, lifting group gross margins by ~3–5 percentage points in prestige cohorts. They offer luxury self-care that complements Yatsen’s mass cosmetic lines, enabling premiumization and a diversified revenue mix.

Yatsen (Perfect Diary, HKEX: 2376) mixes fast-fashion color (200+ SKUs/year; 40% refreshed in 2024) with value makeup (avg SKU CNY 50–120) and premium skincare (prestige market CNY 48.5bn in 2024, ~12% CAGR) to serve trend-led urban shoppers, boosting AOV ~2.5x and digital sales +38% YoY (FY2024).

Yatsen leverages relatable influencers and Key Opinion Consumers to create social-proof trust: 2024 data show influencer-driven sales accounted for ~40% of perfect diary and Yatsen channel revenue, with KOCs delivering 3–5x engagement vs brand posts; customers report higher purchase intent when peers endorse products, and Yatsen sustains this via daily social interactions, livestreams, and transparent Q&A that keep repeat rates above 30%.

Yatsen builds 1:1 WeChat communities and virtual beauty assistants, raising repeat purchases to ~45% and driving ~30% of direct sales in 2024; tiered memberships lift retention +28% and spend +35%; influencer/KOC channels drove ~40% of brand revenue and KOCs yielded 3–5x engagement; support resolves ~85% inquiries <24h, cutting churn ~10–15% and NPS ~60 (2024).

Physical Yatsen stores act as brand immersion touchpoints where customers test products and get professional makeovers; as of 2025 Yatsen operated ~430 offline experience stores across China, with mall locations driving higher average transaction values—store AUV (average unit value) up to 30% above e-commerce SKUs. These hubs, placed in top-tier shopping malls in major cities, also serve omnichannel roles like online-order-pickup and returns, supporting a 2024 reported 18% of total sales through offline-assisted fulfillment.

Omnichannel mix: marketplaces (Tmall/JD) drive volume; direct channels (WeChat/DTC) were ~28% of online sales in FY2024, saving ~15–30% fees and raising margins; live commerce (Douyin/Kuaishou) generated ~RMB1.2bn GMV in 2024; ~430 offline stores (2025) contributed 18% of total sales and 30% higher AUV in malls; international revenue +35% (2024), 18 new markets.

Digital Savvy Urban Professionals in Tier 1–2 cities prioritize convenience and efficiency, account for ~48% of Yatsen’s 2024 online sales, and favor omnichannel shopping—mobile app orders, livestreams, and store pick-up—reducing return rates by 12%. They follow social media influencers (60% cite recommendations), show higher loyalty to brands with personalized digital engagement, and contribute disproportionately to ARPU, ~¥420 monthly per active shopper in 2024.

Core buyers: Gen Z/millennial trend-seekers (18–34) drive volume; Prestige: affluent buyers (28% FY2024 growth, 18% revenue ~RMB1.6bn); Urban professionals: 48% online sales, ARPU ¥420/month; Cross-border: +28% FY2024 (SEA +35%, NA +22%), localization raised repeat +12%.

Inventory and manufacturing costs—raw materials, third-party OEM fees, and in-house production—account for roughly 28–32% of Yatsen’s cost base; in 2024 COGS rose 18% year-over-year to RMB 4.2 billion (about $600M) driven by raw-material inflation and contract manufacturing. Efficient supply-chain coordination and inventory turns (aiming for 6–8 annual turns) cut carrying costs and prevent stockouts; scaling owned plants targets 10–15% unit-cost savings via economies of scale.

A large share of Yatsen’s revenue comes from flagship stores on Tmall and Douyin, with 2024 channel mix showing roughly 40–55% of total sales via these marketplaces; major campaigns like Singles Day and livestreams can spike daily GMV by 2–3x. Platform commissions (5–15%) cut margins, but high traffic and conversion rates—Douyin livestreams yielding conversion rates near 5% in 2024—make these channels central to growth.

Color cosmetics drove ~65% of 2024 product sales (net revenue RMB 8.2bn ≈ US$1.1bn) with 2.8 purchases/customer/year; premium skincare reached ~18% of 2025 revenue with ~62% gross margin; DTC was ~45% of 2024 revenue, lifting margins ~6ppt and housing ~30M private‑domain members; international contributed ~9% (~RMB1.1bn/US$150m).