According to the "Social E-commerce—Beauty Industry Report" jointly issued by Youzan Research and Tencent Ads in 2019, the market share of e-commerce channels accounted for 27.4% in 2018, surpassing key account sales and department stores to become the largest sales channel in China's cosmetics industry. 1 Affected by the pandemic in the past two years, the role of e-commerce for consumers of beauty products has become more prominent. Therefore, domestic and foreign brands are turning to take online market as their key channel layout.
However, the rapid growth of e-commerce has not been matched with greater regulatory scrutiny. According to the cosmetic adverse reaction reports published by multiple provinces and cities, online shopping is still the most problematic area, with frequent occurrences of irregularities such as the manufacture and sale of counterfeit or substandard products, and the illegal or exaggerated publicity of product efficacy.
New Regulation Targeting Cosmetics’ Online Operation
Given the chaos in the online market, China NMPA drafted the first regulation specifically for the online operation of cosmetics, "Supervision and Administration Measures on Online Operation of Cosmetics (Draft for Comments),” and released it for public comments on August 17, 2022. The public consultation will be open until September 6, 2022. 2