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Monthly Digest: China Cosmetic Industry Review | November 2019

  •   28 Nov 2019
  •    Shine Hu
  •  309
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    China International Import Exhibition 2019

    1. Nearly 200 cosmetic-related exhibitors participated in the second China International Import Expo, which was held from November 5-10 in Shanghai. The number of exhibitors, brands and new products was significantly more than last year.

    2. Cosmetic giants Estée Lauder and SHISEIDO made their CIIE debuts. Estée Lauder showed 2 high-end perfume brands By KILIAN and Editions de Parfums Frederic Malle and SHISEIDO displayed its personalized skincare brand Optune, which is developed based on digital technology.

    3. Many exhibitors launched new products during CIIE, which were mostly high end collections. For example, L'OREAL brought its high-end cosmetics brand URBAN DECAY, which is going to hit the Chinese market in 2020. Unilever introduced its high-end oral care brand Zendium for the first time. Johnson & Johnson brought its ultra-high-end tech-based skincare brand Genomer. AmorePacific displayed Primera, its high-end clean-label skincare brand formulated using natural ingredients.

    4. State-of-the-art technology is applied to meet the personalized demands of customers. P&G brought an "AI No-makeup Device"[1], which can scan the skin, skin colour, freckles and other characteristics of a person's face, import the data into the program for analysis, and produce a bottle of personalized beauty liquid foundation. AmorePacific company brought a 3D printing machine from its IOPE Lab which can help consumers customize facial masks.

    5. A lot of niche imported brands appeared at CIIE, among which most were unveiled for the first time in China market. These niche brands mostly advocated concepts like natural and organic, including German brand Weleda, Bee Kiwi from New Zealand, Italian brand Officina Del Mugello, etc.

    Singles Day Sales 2019

    1. L'OREAL beat Estée Lauder to become the No.1 selling cosmetic brand. Live streaming, KOL recommendation, coupled with big discounts contributed to L'OREAL's outstanding performance. 

    2. About 60 cosmetic brands recorded over 100 million yuan in sales, most of which were imported brands. Domestic brands including Pechoin, CHANDO, and Perfect Diary also performed well. Notably, L'OREAL, Estée Lauder, Lancôme and OLAY sold more than 1 billion yuan.

    3. Domestic brand Perfect Diary became the No.1 make-up selling brand, followed by Mac and Estée Lauder. Perfect Diary is also the first domestic make-up brand to rank No.1 in Tmall 11/11 make-up sales.

    4. According to Tmall Global data, more than 250,000 beauty apparatuses were sold on November 11, with a year-on-year increase of 44%. Among them, people born after 1995 and consumers in the low-tier city markets were the biggest contributors to growth in the beauty apparatuses sales, with 84% of consumers coming from 3rd, 4th and 5th tier cities.

    5. From November 1 to 11, the sales of Yintai Department Store increased by 24.2%, among which sales of 80 items exceeded a million yuan and sales of 4 items exceeded 10 million yuan in the beauty makeup category. SISLEY ECOLOGICAL COMPOUND was the first item to sell over 10 million yuan.

    Regulatory Compliance

    1. China National Medical Products Administrative (NMPA) publicized a draft version of Interim Regulations for Cosmetics Overseas Inspection[2], which included details on overseas cosmetic inspection procedures, including inspection scope, the competent authority, results, and penalties for violation of the regulation. The draft version is now open to public comments.

    2. 16 batches of cosmetics were unqualified in Guangdong provincial cosmetics sampling inspection, including skin cream, sunscreen, and facial mask, etc.

    3. Guangdong Medical Products Administrative reminded consumers to be alert to the exaggerated cosmetic advertisement like removing acne in three days or achieving whitening effect in one usage, as these products may contain illegal additives.

    4. To regulate 11/11 Single's Day online shopping campaign, Shanghai market regulators urged Pinduoduo, Meituan, Xiaohongshu (Red), Ymatou and other 22 key e-commerce business enterprises in the city to regulate sales promotion.

    5. 10 batches of hair dying products were unqualified in Ningxia Autonomous Region cosmetics sampling inspection.

    Business & Finance

    1. Bloomage Biotech became the first cosmetic enterprise to be listed on Shanghai Stock Exchange Science and Technology Innovation Board. It is a high-tech enterprise with hyaluronic acid microbial fermentation production technology as its core offering. By virtue of its production of hyaluronic acid, it has become the raw material supplier of many international cosmetics brands.

    2. According to the Ministry of Commerce, from November 1 to 11, China's online retail sales exceeded 870 billion yuan, up 26.7% year on year. The online retail market reached a new high, with emerging market in low tier cities becoming the new driver of growth.

    3. Global spending on the advertisement of beauty products is expected to rise 2.7% to $14.4 billion this year, according to the latest prediction of Market Research Agency Zenith. China is now the largest market for advertising spending on beauty products, reaching $6.2 billion this year, driven by strong demand for male beauty products and e-commerce advertising.

    4. Alibaba began trading on the main board of the Hong Kong Stock Exchange on November 26. Its Hong Kong IPO raised HK $88 billion.

    5. Hangzhou GoLong Holding Co., Ltd. announced the completion of a series B financing of tens of millions of US dollars. This round of financing will be used to expand its reach in the global beauty market.

    Disclaimer: All images used are from the internet.

    Related Link

    [1] Cosmetics in CIIE 2019: Three Trends Driving Growth and Product Development
    [2] China Consults on Draft Regulations for Cosmetic Overseas Inspection
    [3] October Recap: Monthly Digest: China Cosmetic Industry Review | October 2019
    [4] September Recap: Monthly Digest: China Cosmetic Industry Review | September 2019

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    Research analyst at ChemLinked, focusing on market and regulatory updates of imported products in China, mainly covering food and cosmetics.

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