Chinese cosmetics brand secures funding from Xiaomi founder Lei Jun

Chinese cosmetics and skincare company Yu Jia Hui has raised an undisclosed funding round from Xiaomi founder Lei Jun and Shunwei Capital, according to iYiou. This is Lei Jun’s first investment in the cosmetics industry.

Yu Jia Hui has four product lines, each under a different brand: facial masks, lotion, men’s facewash and skin care, and a Garfield cartoon-branded facial mask for kids. The company’s website states it developed its own patented skin care technology.

Yu Jia Hui sells these products through its own ecommerce website, Hmeili, but also has stores on Taobao, Tmall, Jingdong, Suning, and others. The products are sold almost entirely through internet sales alone. It has primarily grown thanks to word-of-mouth marketing, with advertising only accounting for 15 percent of company expenses in 2014. Marketing makes up to 30 percent of expenses at traditional cosmetics companies.

Company CEO Daiyue Feng says he hopes he can use the resources and intellectual support from Shunwei and Lei Jun to develop his business faster and more smoothly. He plans for Yu Jia Hui to go public in 2016.

Mobile sales have been a huge asset to Yu Jia Hui. Feng says it sold RMB 300 million (US$50 million) worth of products – 50 percent of overall sales – on mobile in 2014, and projects that proportion will continue to expand.

"Internet + Skin"

Smart cosmetic devices, such as skin moisture detectors, are a potential future avenue for the company, especially with the founder of Xiaomi at its side. The "internet-plus-skin", as Feng rather disturbingly puts it, could generate new business models for Yu Jia Hui.

We’ve actually seen this type of device in the past. Mlizhi is a pronged skin-moisture detection tool that the user presses to his or her cheek to monitor skin health and transmit the info to a smartphone app. We didn’t take it very seriously when the device was crowdfunding on Demohour.

(Source: iYiou)