Yoshitsu Co., Ltd Implements a KOL Marketing Strategy in the E-commerce Live Streaming Industry and Achieves Business Growth

Rhea-AI Summary

Yoshitsu Co., Ltd (Nasdaq: TKLF) has announced the implementation of a marketing strategy utilizing Key Opinion Leaders (KOLs) through its subsidiary Shenzhen Qingzhiliangpin. This move targets China's booming e-commerce live streaming market, which is projected to surpass $700 billion by the end of 2023. In the year ending January 2023, the KOL advertising segment generated revenue of $2.13 million with a profit margin of 70%. The firm anticipates sales revenue exceeding $3 million for fiscal year 2023, leveraging the influencer market's growth. Yoshitsu aims to enhance profitability while scaling its operations on major platforms like Douyin and Kuaishou, following its acquisition of Qingzhiliangpin in July 2022.

Positive

• Achieved $2.13 million in KOL advertising revenue with a 70% profit margin for the year ending January 2023.
• Projected sales revenue exceeding $3 million for fiscal year 2023.
• Established a foothold in the rapidly growing e-commerce live streaming market, projected to reach $700 billion by end of 2023.

Negative

• None.

Tokyo, Japan, April 11, 2023 (GLOBE NEWSWIRE) -- Yoshitsu Co., Ltd ("Yoshitsu" or the "Company") (Nasdaq: TKLF), a retailer and wholesaler of Japanese beauty and health products, as well as sundry products and other products in Japan, announced today that the Company, through its wholly-owned subsidiary, Shenzhen Qingzhiliangpin Network Technology Co., Ltd. (“Qingzhiliangpin”), has implemented a marketing strategy centered around Key Opinion Leaders (“KOLs”), commonly known as prominent social media influencers, and has established a foothold in China’s thriving e-commerce live streaming industry. The Company has reported growth of its KOLs advertising business for the six months ended September 30, 2022, with revenue from KOLs advertising for the one-year period between January 2022 and January 2023 was $2.13 million, with a profit margin of 70%.

The KOL market size, as reported by China Index Academy, had a market size of $200 billion in 2020, and is projected to hit $1 trillion by the end of 2025¹. The effectiveness of KOL marketing has led to a surge in the number of KOLs on social media in China. According to Daxue Consulting², there are now around 10 million KOLs in China, with the majority being managed by more than 100,000 multi-channel network agencies. These agencies provide cross-promotion and digital rights management to KOLs and receive a percentage of ad revenue as their compensation.

Statista reported that the gross merchandise value of e-commerce live streaming in China amounted to approximately $500 billion in 2022, as compared with less than $3 billion in 2017. The market size of e-commerce live-streaming is estimated to maintain its rapid growth and reach $700 billion by the end of 2023. Taobao, Douyin, and Kuaishou were three of the leading e-commerce live streaming platforms among Chinese online shoppers.

Since the acquisition of Qingzhiliangpin in July 2022, the Company has established a presence in the e-commerce live streaming business by extending its reach across multiple leading Chinese live-streaming platforms such as Douyin, Kuaishou, Xiaohongshu, and Bilibili. In December 2021, the Company launched its online “Tokyo Life Pavilion Overseas Flagship Stores” on Douyin and Kuaishou, partnering with KOLs and celebrities for special e-commerce live streaming events to endorse its products and boost sales.

Mr. Mei Kanayama, the Principal Executive Officer of Yoshitsu, commented, “We're confident in our business performance and growth. We expect our sales revenue to exceed $3 million in fiscal year 2023. With our KOL marketing strategy to be established in the e-commerce live streaming industry and based on the financial growth we have achieved so far, we believe that the thriving influencer market in China could bring more business opportunities to us. Looking ahead, as the business scales, we believe our profitability would increase and we expect to reduce unnecessary expenses to achieve this goal."

About Yoshitsu Co., Ltd

Headquartered in Tokyo, Japan, Yoshitsu Co., Ltd is a retailer and wholesaler of Japanese beauty and health products, sundry products, and other products in Japan. The Company offers various beauty products (including cosmetics, skin care, fragrance, and body care products), health products (including over-the-counter drugs, nutritional supplements, and medical supplies and devices), sundry products (including home goods), and other products (including food and alcoholic beverages). The Company currently sells its products through directly-operated physical stores, through online stores, and to franchise stores and wholesale customers. For more information, please visit the Company's website at https://www.ystbek.co.jp/irlibrary/.

Forward-Looking Statements

All statements other than statements of historical fact in this press release are forward-looking statements, within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations and projections about future events and financial trends that the Company believes may affect its financial condition, results of operations, business strategy, and financial needs. Investors can identify these forward-looking statements by words or phrases such as "may," "will," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "is/are likely to," or other similar expressions. The Company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. In addition, there is uncertainty about the further spread of the COVID-19 virus or the occurrence of another wave of cases and the impact it may have on the Company's operations, the demand for the Company's products, global supply chains, and economic activity in general. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company's registration statement and in its other filings with the U.S. Securities and Exchange Commission.

For more information, please contact:

Yoshitsu Co., Ltd
Investor Relations Department
Email: ir@ystbek.co.jp

Ascent Investors Relations LLC
Tina Xiao
President
Phone: +1-917-609-0333
Email: tina.xiao@ascent-ir.com

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¹ China Index Academy, “2021 China Influencer Economy Development Report”, freely accessible at https://www.100ec.cn/detail--6599921.html.
² Daxue Consulting, “Ultimate guide to KOL marketing in China: What is a KOL and how to unravel their enormous potential (‘Daxue Report’),” freely accessible at https://daxueconsulting.com/kol-marketing-china/.

FAQ

What is Yoshitsu's marketing strategy involving KOLs?

Yoshitsu has implemented a marketing strategy utilizing Key Opinion Leaders (KOLs) to enhance its presence in China's e-commerce live streaming market.

What revenue did Yoshitsu report from KOL advertising?

Yoshitsu reported $2.13 million in KOL advertising revenue for the year ending January 2023.

What is the projected sales revenue for Yoshitsu in fiscal year 2023?

Yoshitsu expects its sales revenue to exceed $3 million in fiscal year 2023.

How significant is the e-commerce live streaming market in China?

The e-commerce live streaming market in China is projected to reach $700 billion by the end of 2023, highlighting its rapid growth.