Kans 2025 Performance Analysis: In-Depth Interpretation of Sales Expense Ratio, Short Drama Marketing Sustainability, and Investment Risks

Based on the latest information I have collected, I will now provide a detailed analysis of Kans’ 2025 performance, the issue of sales expense ratio, and the sustainability of short drama marketing for you.

According to Shangmei Group’s H1 2025 financial report [1]:

• Operating Revenue
  : RMB 4.108 billion, representing a year-on-year increase of 17.3%
• Net Profit
  : Year-on-year increase of 30.65%
• Kans Brand Revenue
  : RMB 3.344 billion, accounting for 81.4% of total revenue, with a year-on-year increase of 14.3%
• Sales and Distribution Expenses
  : RMB 2.337 billion, accounting for 56.9% of revenue [1]

Regarding the “2025 expected loss” you mentioned, it needs to be clarified that Shangmei Group actually achieved

in H1 2025, with net profit surging 30.65% year-on-year [1]. The claim of expected loss may stem from market concerns about the future or misinterpretation by individual media outlets.

Shangmei Group has a serious issue of brand dependence:

Brand	Revenue (RMB 100 million)	Proportion
Kans	33.44	81.4%
newpage	3.97	9.6%
Red Elephant	1.59	3.9%
One Leaf	0.89	2.2%
Others	1.19	2.9% [1]

This “putting all eggs in one basket” structure exposes the company to significant risks. If a negative incident occurs with the Kans brand, it will directly impact the performance of the entire group.

According to CCTV reports and multi-party data [2]:

• In 2024, Shangmei Group’s marketing expenses reached RMB 3.947 billion, close to 60% of its revenue
• Compared with the industry average of 40%, Shangmei Group is about 15-20 percentage points higher
• R&D investment accounts for only 2.6% of revenue, which is lower than the industry standard of 3%-5%

According to CCTV’s investigation [2], a best-selling Kans set priced at RMB 399:

• Total Cost is Only RMB 26
  (packaging: RMB 14 + raw materials: RMB 12)
• The vast majority of the fees paid by consumers go to the marketing link

This “heavy marketing, light R&D” model has raised market concerns about product quality and the brand’s long-term competitiveness.

Kans has indeed achieved remarkable results through short drama marketing [1][3]:

• In H1 2025, Kans ranked first among beauty brands in monthly total GMV on the Douyin platform
• The combined model of short dramas + live streaming created explosive growth

According to industry data [3]:

• In H1 2025, the share of short drama placements by beauty brands
  decreased by 21%
• Kans, a pioneer, has exited short drama marketing due to declining ROI
  [3]

• In 2024, the average CPM (cost per thousand impressions) for Douyin live streaming increased by 35% year-on-year
• Traffic competition has driven up marketing costs [4]

The homogenization of short drama marketing is becoming increasingly serious, and consumers’ acceptance of embedded advertisements is declining.

:

• The advantages of the Douyin channel still exist, and growth momentum can be maintained in the short term
• Consumption peak seasons such as the Spring Festival Shopping Festival bring sales opportunities

:

• The EGF testing incident caused the stock price to drop from HK$85.3 to HK$57. Although it has rebounded to HK$73.95, it has not fully recovered [1]
• Channel concentration is as high as 92.7% online, with weak offline channels [1]

:

1. Fading Traffic Dividend
   : The Douyin channel has become saturated, and ROI continues to decline [1]
2. Failed Brand Diversification
   : Multiple sub-brands (newpage, One Leaf, etc.) have failed to replicate Kans’ success
3. Insufficient Product Strength
   : Low R&D investment, lack of core technological barriers
4. Intensified Competition
   : Competitors such as Proya and Yatsen Holding continue to strengthen their efforts

:

• Layout of traditional e-commerce channels such as Tmall [1]
• Expanding overseas markets (global spokesperson Jackson Wang)
• Enhancing product R&D and quality control

1. Brand Concentration Risk
   : 81.4% of revenue relies on a single brand
2. Channel Dependence Risk
   : 92.7% of revenue comes from online channels
3. Marketing Dependence Risk
   : Sales expense ratio is close to 60%, eroding profit margins
4. Product Quality Risk
   : The huge gap between cost and selling price may trigger a trust crisis

• Shangmei Group has begun to lay out a second growth curve
• Attempting to expand from Douyin to Tmall channels
• Increasing investment in overseas markets

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: The dividend from Kans’ short drama marketing is fading. Although growth can still be maintained in the short term, . The high sales expense ratio (56.9%-58.11%) has severely squeezed profit margins, and insufficient R&D investment has led to a lack of core competitiveness in products. It is recommended that investors pay attention to the company’s progress in channel diversification, product R&D, and brand matrix construction, and be alert to operational risks caused by over-reliance on a single brand and channel.

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[1] Sina Finance - “Makeup Brand Partner Resigns, Over 80% of Revenue Comes from Kans: How Will Shangmei Group Solve It?” (2026-01-20)
[2] NetEase News - “Cost RMB 26, Sold for RMB 399! The Tricks of a Cosmetics Giant Exposed” (2026-01-09)
[3] Tencent News - “P&G Bets on Short Dramas, Pioneer Kans Exits Due to Declining ROI” (2026-01-17)
[4] CBNData - “Domestic Beauty Brands Kidnapped by Traffic” (2026-01-15)