Perfect Diary owner Yatsen doubles down on skincare, R&D after business overhaul

Yatsen Group, the Chinese beauty company behind Perfect Diary cosmetics, is intensifying its focus on skincare and new product research to sustain its growth following a recent business overhaul, according to founder and CEO David Huang. The Guangzhou-based company intends to scale back its acquisition spree and instead expand its existing skincare portfolio while maintaining, and possibly increasing, its research and development spending, which currently accounts for 3 to 4 percent of annual revenue.

Huang expressed confidence in the potential of their current brands, stating that they will continue to grow their existing framework. However, he did not rule out acquiring businesses with strong brand equity and products. This marks the next phase in Yatsen's transformation, which began with its mass-market colour cosmetics brand Perfect Diary before listing in New York in 2020.

Skincare now accounts for over 70 percent of the company's total revenue, up from 12 percent in 2020, while colour cosmetics sales have declined by more than 35 percent. Despite this shift, Yatsen's net loss widened to 90.8 million yuan in the second quarter of 2026 due to a 11.8 percent increase in sales and marketing costs. The company is pursuing a strategy called "skinification" to integrate skincare research into its colour cosmetics line, aiming to create synergies in research and development, distribution, and consumer insights, with the goal of building a multi-brand beauty group.