Perfect Diary and the Chinese Cosmetics Market

Accordingto industry sources, Chinese cosmetic brand Perfect Diary has completed a newround of funding worth over USD 1 billion with participation from top investmentfunds in China, some of which included Hillhouse Capital, Sequoia China andChinese Culture Group. This has served to create a large amount of momentum forthe company.


PerfectDiary was founded by Ex-Unifon CoO Jinfeng Huang in 2016 through a chancemeeting with UK-based fashion designers in London. Said designers expressed adesire to bring European cosmetics to Asia and create a new image for Chineseconsumers. Taking inspiration from fashion shows and catwalks, Perfect Diaryhas successfully been able to bring cosmetics and beautification together intoa single package.


PerfectDiary has been utilizing several online marketing channels to promote its brandalong with the use of brand ambassadors, celebrity endorsements and partnershipswith various IPs. While the brand was mostly focused on online channels duringits earlier years, offline channels have also become one of the maindevelopment routes for the company, with the largest storefront opening in thecity of Chengdu on the 7th of September. The company has alsoreleased a plan for the creation of over 600 different offline stores in thenext three years.


PerfectDiary has attained a significant amount of market share for a company foundedin 2016 as the brand is competing alongside the likes of Maybeline, Dior, Armaniand Estee Lauder amongst other brands for online sales. The brand was ranked at10th place for online sales for top 10 brands in 2018, andimmediately jumped up to the position of 2nd place on the sameranking alongside Maybelline in March 2019.

The rebound in the global economy in the last 2 years haveled to a surge in cosmetics consumption, with a large portion of sales comingfacial makeup. According to AskCI research data, the Chinese cosmetics marketdeveloped at a steady pace between 2012 and 2017 at a CAGR of 13.7%. Thecosmetics market is projected to growth at a CAGR of 12% within for the nextfive years, with the cosmetics market in 2019 projected to reach a size of CNY43.2 billion.


Trendswithin the cosmetics industry

1.Increased purchasing power and accelerated market growth

Growingliving standards will eventually cause high quality products to become thestandard for market consumption. While international brands continue to hold apowerful grip on the Chinese market, Chinese domestic brands have slowly begunto compete on even grounds with international brands and are poised toeventually break the monopoly international brands hold on the market.


2.Social media’s growing role in marketing

Cosmeticscompanies have come to recognize the power of social media, with companies beginningto create their own social media accounts and forming partnerships with varioussocial media stars to promote their brands.