Shenzhen HBN Technology (Group) Co. Ltd., a prominent skincare brand, is poised for a Hong Kong IPO, demonstrating exceptional financial performance. This achievement is largely attributed to its innovative guerrilla marketing tactics, which have cemented its position as a leading player in the Chinese beauty market. Despite its classification as a 'technology' firm in its IPO application, HBN operates primarily within the cosmetics sector, distinguishing itself through strategic brand building rather than technological innovation in its product development.
HBN's Marketing-Driven Ascent in the Skincare Industry
Founded 12 years ago with a focus on feminine care, HBN's trajectory shifted dramatically in 2019 with the launch of its skincare line, specifically targeting the lucrative retinol market. Under the astute guidance of its controlling shareholder, Yao Zhenan, a former graphic design lecturer, HBN rapidly climbed the ranks, securing a spot among China's top 10 skincare brands and ranking fourth among mid-to-high-end Chinese brands by sales in 2024. This meteoric rise is particularly noteworthy given the brand's relatively short history in the skincare domain. In the first nine months of the previous year, HBN's revenue saw a 10.2% increase, reaching 1.51 billion yuan, while its profit surged by an impressive 190% to 145 million yuan. The company's overall revenue for 2024 stood at 2.08 billion yuan, a modest 6.9% increase from 2023, yet its profit dramatically more than tripled to 129 million yuan.
Yao Zhenan's marketing genius was central to HBN's success. He orchestrated a comprehensive 'retinol anti-aging' campaign, establishing HBN as a leading authority on retinol in China. This strategy involved multifaceted approaches: partnering with universities and medical institutions to conduct scientific research and clinical trials, the results of which were disseminated in industry journals. These collaborations provided credible third-party validation for retinol's efficacy and HBN's specific product formulations. Furthermore, HBN sought independent affirmation from international certification bodies through live-user trials and collaborated with beauty platforms to gather real-world testimonials, showcasing tangible results. The ultimate stroke of genius involved mobilizing a vast network of key opinion leaders (KOLs) across diverse categories such as lifestyle, beauty, fashion, and celebrity. Their authentic reviews and personal experiences significantly enhanced HBN's brand image and consumer trust.
While HBN boasts high gross margins, ranging from 73% to 76.6% over the past three years, its adjusted net profit margins were considerably lower, indicating substantial investment in non-production areas. A significant portion of these expenditures, specifically 65.1% and 59.4% of revenue in 2023 and 2024 respectively, was allocated to marketing. In the first nine months of 2025, marketing costs amounted to 870 million yuan, representing 58% of sales. This aggressive promotional spending, while impactful, considerably squeezed the company's profits. In stark contrast, HBN's investment in research and development (R&D) was significantly lower, with 66 million yuan (3.4% of revenue) in 2023, 58 million yuan (2.8% of revenue) in 2024, and only 40 million yuan (2.6% of revenue) in the first nine months of 2025. This disparity highlights HBN's strategic reliance on marketing over internal R&D. Additionally, subcontracting plays a crucial role in HBN's supply chain, with cosmetics manufacturer Bawei revealing that HBN accounted for 15% to 20% of its revenue. This demonstrates that HBN's marketing-heavy approach is a deliberate strategy to carve out a niche in a competitive market, where effective brand building can be as vital as product innovation itself, offering significant potential for its upcoming IPO despite the recent struggles of other cosmetic stocks in Hong Kong.
HBN's journey underscores the transformative power of strategic marketing, even for companies not at the forefront of technological innovation. It illustrates how a deep understanding of consumer psychology and market dynamics, coupled with a well-executed promotional strategy, can lead to rapid brand recognition and significant financial success. This case study offers valuable insights into brand building in competitive consumer markets, emphasizing that a compelling narrative and widespread endorsement can outweigh extensive R&D in achieving market dominance.