Can Perfect Diary take C-beauty global?

Perfect Diary is the poster child of Chinese beauty. Founded in 2016, the Yatsen-owned brand has quickly conquered China’s cosmetics market with its slick marketing tactics and deep understanding of what makes its young consumers, quite literally, click.

The speed at which this five-year-old giant has grown is staggering. In 2018, it became the first brand to hit 100 million yuan ($15 million) in sales on Alibaba’s Singles’ Day. The following year, it broke its own record in a fraction of that time and became the first domestic brand ever to top Tmall’s “Double 11” beauty category, beating out the likes of L’Oréal and Maybelline.

And Perfect Diary hasn’t peaked yet. Even during the pandemic—when many beauty names were shutting their doors—this DTC unicorn managed to close a round of financing and officially list on the New York Stock Exchange, bringing its market value up from $4 billion in September 2020 to $7.82 billion two months later.

With its home market on lock, Perfect Diary is now looking to take on the rest of the world. But that, of course, is easier said than done. Below, Jing Daily examines Perfect Diary’s playbook, both at home and abroad, and whether these strategies could pave the way for C-beauty brands to win on an international stage.

Perfect Diary’s winning formula for China

Yatsen’s star player has often found its way into headlines by teaming up with a diverse array of collaborators, from household names like Oreo and the Discovery Channel to “little fresh meat” artists like INTO1’s Liu Yu and Zhu Zhengting. At the same time, it has also built a strong network of emerging KOLs and KOCs via social apps like Little Red Book and Douyin as a way to expand its community reach.

Perfect Diary taps influencers like Chinese singer Liu Yu (left) and cultural partners like the Discovery Channel to stand out. Photo: Weibo

Another area where Perfect Diary stands out is its ability to convert public traffic into private traffic. To accomplish this, the Guangzhou-based house first encourages customers to add its personal WeChat account. Then, it uses virtual KOCs to pose as beauty consultants and online friends, posting product reviews and exclusive promotions to encourage repurchasing. Although Chinese companies have long used WeChat groups to contact consumers, Allison Malmsten, the marketing director of Daxue Consulting, says that Perfect Diary was the first to make private traffic known globally.

“[Perfect Diary] makes it so that consumers have many entry points into groups where the group moderation is automated with a virtual KOC, making their private traffic strategy very scalable,” she said. And with thousands of WeChat groups, numbering up to 500 people each, the brand has successfully amassed a large and loyal following.

Heading south to beauty’s next hotspot

Building off this foundation, Perfect Diary started eyeing its first international target in 2020: Southeast Asia. According to Maria Wang, the head of overseas markets at Perfect Diary, two factors drove this decision. One, “Southeast Asian people have a large demand for consumer goods and a high acceptance of new products and brands,” she said. And two, that “the e-commerce industry is still in an early stage of development, providing us a great chance to leverage the traffic.”

To seize this market, which is expected to be worth $47.1 billion by 2025, Perfect Diary turned to its tried-and-true China tactics. The collaborations leader dropped a co-branded series with Sanrio specifically for Southeast Asia and partnered with local stars like the Vietnamese singer AMEE and the Malaysian influencer Joey Chua to promote its products. On top of this, the brand developed makeup shades to match local skin tones and upgraded its oil control technology to meet consumer needs, Wang added.

Perfect Diary promotes its Sanrio collaboration (left) and partnership with AMEE (right) ahead of the 5.5 Festival on Shopee. Photo: Perfect Diary’s Instagram

So far, these localisation efforts have paid off. At the end of May 2021, Perfect Diary was ranked first in the lip product category in Malaysia, first in colour cosmetics in Singapore and Vietnam, and first in loose powder sales in the Philippines—after only one year in the region. These results not only attest to the effectiveness of the brand’s marketing strategy but, more importantly, the strong appetite for C-beauty outside of China.

A not-so-perfect journey to the West

Banking on this appetite, Perfect Diary has begun making tentative forays into Western markets. From collaborations with big IPs like the British Museum and the Metropolitan Museum of Art, to tapping American makeup gurus and appointing the Australian singer Troye Sivan as its ambassador, the C-beauty unicorn continues to employ high-profile partners to help build awareness abroad.

But Kejie Yi, a content manager at China Marketing Insights, argues that greater localisation is important for non-Asian audiences. For example, while Perfect Diary relies partially on private traffic for its domestic success, she doubts “whether that will work in Western countries where people might care more about privacy and won’t be comfortable allowing advertisements to constantly show up on their social media.”

But understanding differing consumer behaviors isn’t Perfect Diary’s only concern. When it comes to selling in the West, homegrown rival Florasis beat it to the punch. After capitalizing on its traditional Chinese designs to gain fame on TikTok and Instagram, the C-beauty disruptor decided to make its products available for purchase in the US, France, Germany, and the UK, among other locations. Although Perfect Diary now ships to these countries as well, it will need to double down on growing its brand footprint and distribution channels if it wants to be the one to put C-beauty on the map.

On TikTok, Florasis has gained over 96,000 fans and 39 million views on the #Florasis hashtag. Photo: Screenshots, TikTok

Can C-beauty catch on worldwide?

But whether it’s Perfect Diary or Florasis, C-beauty brands will ultimately face an uphill battle in gaining worldwide recognition. “When discussions about C-beauty brands and products arise on social media, there is almost always comments like ‘watch out, they are a Chinese brand,’ which is followed by questions about animal testing and manufacturing quality,” Malmsten told Jing Daily. “C-beauty brands will have to turn around the reputation of ‘Made in China’ labels by providing quality products with transparency on sustainability and ethics.”

That said, Perfect Diary’s global dreams have not been dashed yet. According to Malmsten, young consumers have a more malleable perception of China as they were the first to grow up “when China was more than just the factory of the world.” Therefore, if the brand can win over Millennials, Gen Zers, and Gen Alphas (which account for over half of beauty spending together) with localised marketing and quality products, perhaps it can offer Western heavyweights some healthy competition and even give C-beauty’s image a glow up in the process.