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Ask AI · Why did INATURAL TANG’s founder give up a government job and pivot into a beauty business?

This article is sourced from: Times Finance | Authors: Wu Jiamin, Li Qian

Photo source: Photo by Foto/VCG

The Hong Kong IPO market has remained active, and INATURAL TANG Group has submitted its second filing.

Just 5 days after its first IPO application failed, INATURAL TANG Global Holdings Co., Ltd. (hereinafter referred to as “INATURAL TANG Group”) quickly updated its prospectus.

Frost & Sullivan data shows that, based on retail sales for 2024, INATURAL TANG Group is the third-largest homegrown cosmetics group in China, behind Proya and Shangmei Co., Ltd. On September 29 last year, INATURAL TANG submitted its listing IPO prospectus to the Hong Kong Stock Exchange, but it recently lapsed.

On January 5 this year, the China Securities Regulatory Commission issued supplementary requirements for INATURAL TANG Group’s offshore issuance and listing record-filing, covering issues including the equity history of domestic operating entities, business qualifications and foreign-investment access, the subscription prices of Pre-IPO shareholders, the family trust structure, and compliance for offshore M&A, among other matters.

INATURAL TANG Group was founded and is controlled by the Zheng Chunying family in 2001. The group currently operates five major cosmetics brands, including its flagship brand INATURAL TANG, as well as PUREFEEL, MESSI, Spring and Summer, and Jichu (Kids Out). Among them, the INATURAL TANG brand contributed 95.9%, 95.4%, and 95.3% of the group’s total revenue in 2023, 2024, and 2025, respectively.

Gross margin above 70%, and the Northeastern boss spent 6 billion yuan on marketing in three years

INATURAL TANG Group began as the startup of a young man from Northeast China who previously worked within the government system.

At 61 years old, INATURAL TANG Group founder Zheng Chunying graduated in 1986 from the economics program at Dongbei University of Finance and Economics, and then worked for the Finance Bureau of Liaoyang City in Liaoning Province. After working at a “stable government job” for 10 years, in 1996 he chose to resign and start a business.

In 2001, Zheng Chunying came to Shanghai to begin a new venture. He founded JALA (the predecessor of INATURAL TANG Group), launched two major brands—MESSI and INATURAL TANG—and entered the beauty retail store channel. In 2010, INATURAL TANG moved into 2,600 supermarket counters. In 2023, the company converted from a joint-stock system into a limited liability company. In 2024, four controlling shareholders set up family trusts, respectively.

According to the prospectus, from 2023 to 2025, INATURAL TANG Group recorded revenue of RMB 4.442 billion, RMB 4.601 billion, and RMB 5.318 billion, respectively. Net profit also showed some fluctuations: RMB 302 million, RMB 190 million, and RMB 351 million, respectively, over the same period. Among them, the year-on-year decline in profitability in 2024 was mainly because the company strengthened product and brand marketing activities, which led to an increase in sales and marketing costs.

Overall, the beauty and personal care business still exhibits the characteristic of relatively high gross margins. From 2023 to 2025, INATURAL TANG Group’s gross margin steadily increased to 67.5%, 69.4%, and 70.6%, respectively. Over the same period, net profit margins were 6.8%, 4.1%, and 6.4%, respectively.

INATURAL TANG’s most obvious weakness is its high reliance on a single brand.

In 2025, revenue from its main brand INATURAL TANG was RMB 5.070 billion, up 15.51% year over year, and accounted for as much as 95.3% of the company’s total revenue, nearly supporting the company’s “base business” on its own. In 2023–2024, this share was 95.9% and 95.4%, respectively; for three consecutive years it has been maintained above 95%.

In fact, INATURAL TANG Group has long tried a multi-brand layout, launching high-end skincare brand MESSI, a youth-oriented brand Spring and Summer, a sensitive-skin care brand PUREFEEL, and a kids’ skincare brand Jichu (Kids Out), among others, covering multiple sub-sectors.

However, the prospectus shows that in 2025, the combined revenue of the other brands—PUREFEEL, MESSI, Spring and Summer, and Jichu (Kids Out)—was RMB 231 million. These subsidiary brands, built up over years, collectively accounted for less than 5% of total revenue. Most are still in a market cultivation phase and have not yet formed scalable competitive strength.

In terms of product categories, skincare remains the pillar. In 2025, skincare revenue exceeded RMB 4.573 billion, accounting for 86% of total revenue. Personal care revenue was RMB 340 million, or 6.4%; makeup and other product categories—including men’s care and baby care products—generated RMB 209 million and RMB 180 million, respectively, together accounting for less than 4%.

Heavy on marketing, light on R&D is a key concern for the capital market regarding the cosmetics sector.

In 2025, INATURAL TANG Group’s selling and distribution costs were RMB 3.044 billion, accounting for 57.2% of total revenue. Of this, advertising expenses alone totaled RMB 1.664 billion. From 2023 to 2025, total marketing and promotion expenses were RMB 6.160 billion. According to an incomplete count by Times Finance, over the past year, INATURAL TANG Group has successively announced five “top-tier” celebrity brand ambassadors.

In 2025, the company’s R&D spending was RMB 106 million, with an R&D expense ratio of 2.09%. In 2023–2024, the company’s R&D expense ratio also stayed around 2%, lower than peers Proya and Beitainey’s 2.6%–6.07%. Over three years, cumulative R&D spending was RMB 291 million.

Compared with the industry’s generally common OEM model, INATURAL TANG Group relies mainly on its own factories for production. More than 80% of finished products are produced internally, while an average of 10% and 2% are produced by ODM and OEM suppliers, respectively.

On pricing, according to prices shown on INATURAL TANG’s official Taobao flagship store, most skincare series are priced in the RMB 150–300 range. However, according to the prospectus, from 2023 to 2025, the company’s average selling prices for skincare, makeup, and personal care categories all declined to varying degrees, with average prices for each category generally in the RMB 30–50 range.

The Zheng family’s wealth shrank; they once said, “If there’s enough funds, we don’t have to go public”

As a typical family-controlled enterprise, INATURAL TANG Group’s equity is highly concentrated within the Zheng family, which includes four siblings of the Zheng family: Zheng Chunying’s siblings.

In 2023, the listing entity of INATURAL TANG Group was established offshore, and then held by multiple founders’ BVI companies through equity distribution and transfer. In 2024, the founders’ family established their respective family trusts. Subsequently, each founders’ BVI company transferred the equity it held in the offshore listed entity to a direct offshore holding company in exchange for 1% of the equity with attached voting rights in each direct offshore holding company, while the remaining 99% of the equity without voting rights was held by the respective family trusts.

The prospectus shows that prior to the IPO, the Zheng family (through the founders’ BVI companies and family trust structure) collectively held about 87.82% of the voting rights in the Cayman listed entity, making them the company’s controlling shareholders. In 2025, the listed entity also conducted a share subdivision.

Industry insiders point out that holding equity through trusts can avoid equity splits caused by issues such as divorce/remarriage or inheritance involving family members, enabling a smooth transition of control. However, INATURAL TANG Group’s past complex transactions, such as equity transfers and reorganizations, have also raised regulatory questions, including the reasonableness of valuation basis and the authenticity of capital contributions, as well as screening for potential related-party benefit transfers.

At present, Zheng Chunying serves as Chief Executive Officer, Executive Director, and Chairman of INATURAL TANG Group. Her younger brother Zheng Chunbin and Zheng Chunwei serve as Executive Directors. Her sister Zheng Xiaodan serves as a Non-Executive Director, but did not hold any specific management role.

In addition, the company’s current CFO and board secretary, Li Zhuoguang (formerly known as Li Guangfeng), served as an Executive Director, Vice President, and Chief Financial Officer of Jiumaojiu (09922.HK) from January 2013 to June 2023, and has served as an Independent Non-Executive Director of Kangchen Pharmaceutical (01681.HK) since February 2025.

In 2023, the company responded to listing rumors by saying, “If we can solve the funding problem, we don’t need to go public.” The prospectus shows that as of February 28, 2026, INATURAL TANG Group currently has no borrowings.

From October 2024 to September 2025, INATURAL TANG Group introduced the BeautyTown Fund under L’Oréal Group and domestic consumer investment institution JiaHua Capital as strategic investors. The BeautyTown Fund contributed RMB 442 million to obtain 6.67% shares, and JiaHua Capital contributed RMB 300 million to obtain 4.20% shares, for total financing of RMB 742 million.

The “2026 Hurun Global Rich List” shows that Zheng Chunying ranks 3,635th on the list with net worth of RMB 7.5 billion, down by more than RMB 3 billion from RMB 11 billion in 2025.

The mass cosmetics segment is still expanding. The prospectus shows that the market size of China’s mass cosmetics market below RMB 300 is expected to grow from 2025 to 2029 at a compound annual growth rate of 7.7%. By 2029, the market size will reach RMB 10,548 billion, and its share will increase to 81.9%.

Also, according to Euromonitor data, INATURAL TANG’s market share in China’s skincare market declined from 3.1% in 2018 to 2.3% in 2023.

Against the backdrop of homegrown brands rising one after another, foreign brands facing intensified competition, and consumers becoming more focused on value for money, the company’s brand competitiveness still faces pressure. According to the prospectus, the purposes of INATURAL TANG Group’s IPO fundraising in this second attempt include strengthening DTC capabilities in sales channels, enriching its multi-brand matrix, R&D and product development, and expanding its business in overseas markets.