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Monthly Digest: China Cosmetic Industry Review | October 2019

  •   30 Oct 2019
  •    Shine Hu
  •  522
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    Company dynamics

    1. L'oreal is going to bring more than 1,000 products to the upcoming 2nd China International Import Expo (more than 50% more than first CIIE) covering skin care, cosmetics, perfume, hair care, hair dye, men's grooming and other beauty categories. 1/3 of these 1000 products will be new entrants to the Chinese market.

    2. After Houston Rockets General Manager Daryl Morey ignited a firestorm over his Twitter post on Hong Kong, some of the official NBA partners listed on the NBA China website have announced their termination or suspension of cooperation with it, which includes domestic men's skin care brand Wzun and Unilever's shampoo brand CLEAR.

    3. Koala e-commerce platform has signed contracts with more than 30 international brands, including those from giants like P&G, L'oreal and Johnson & Johnson, after being acquired by Alibaba in early September.

    4. French skin care brand Clarins has announced the establishment of its 1st overseas laboratory in Shanghai. The laboratory is expected to be operational in the 2nd quarter of 2020. In the future, its global product development strategy will encompass Asian and Chinese concepts.

    5. Dior revealed a map of China that did not include Taiwan during a campus event in Zhejiang, which has caused outrage among netizens. Soon afterwards, Dior issued an apology statement through its official Sina Weibo account, emphasizing that it always respects and upholds the one-China principle.

    6. The first flagship store of 3CE STYLENANDA in China has opened in downtown Beijing, covering an area of 400 square meters. This Korean cosmetics brand was acquired by L'oreal in 2018 and the newly opened flagship store is the largest one L'oreal has opened in China so far.

    Crossover & co-branding

    1. China's domestic makeup brand Perfect Dairy launched co-branded makeup collections with Chinese National Geography. The new makeup collections, consisting of 4 eye shadows, were inspired by China's 4 natural landscapes Danxia, plateau, lake and terraced fields.

    2. UNIFON, a domestic skin care brand, rolled out a crossover tea-themed skin care and makeup product series with Chayanyuese, a regional popular tea drink brand based in central China. The skincare products include facial mask and essence, and the makeup products cover tone-up cream, lipsticks and customized milk tea bottle shaped bag.

    3. Lafang Group announced through its official Sina Weibo account that it has been authorized by Chinese cartoon IP animation film Ne Zha to roll out the limited edition crossover gift box, which include hyaluronic acid shampoo and conditioner and hair mask.

    4. M·A·C announced the launch of its M·A·C×ANGEL CHEN capsule collection, which includes an air cushion foundation and two lipsticks in the hot colors of Ruby Woo and Marrekesh. This collection is inspired by the Chinese ancient poem The Song of Mulan.

    5. Summer Palace and YUESAI jointly launched the limited edition of VITALIZE GANODERMA QUINTESSENCE INTENSIVE REVIVING TONER to coincide with the beginning of double 11 pre-sales. This essence is based on YUESAI's original ganoderma product packaged in an innovative Summer Palace theme.

    Regulatory compliance

    1. 34 batches of cosmetics were unqualified in Zhejiang provincial cosmetics sampling inspection, mainly covering acne and hair dying products.

    2. The National Medical Products Administration has stopped the sale of 22 batches of fake cosmetics, including several hair dying products.

    3. After being pulled off shelves of all app stores in late July, RED was again available for download in Android app stores on October 14 and back on Apple app stores on October 22.

    4. The cosmetics inquiry service, launched by the National Medical Products Administration, has been added into State Council's Mini Program on Wechat. The inquiry service can be used to inquire about domestic special-use cosmetics, imported cosmetics, domestic non-special purpose cosmetics, imported non-special purpose cosmetics, etc.

    Some interesting data points

    1. According to data released by Chinese retailer giant Suning, during China's National Day Holiday, the sales value of beauty brands increased 163% year on year.

    2. In the first three quarters of 2019, the perfume and cosmetics business of LVMH Group recorded revenue growth of 8%, driven by the momentum of its flagship brands in Asia. Brands such as Dior, Guerlain, Givenchy and Benefit continue to drive growth.

    3. In the first 3 quarters, China's cosmetics imports surged 39.9%, according to the General Administration of Customs.

    4. Unilever's third-quarter revenue was 13.3 billion euros(about 104.33 billion yuan), a year-on-year growth of 5.8%, below market expectations. Beauty products (including shampoo, shower gel and antiperspirants.) contributed the most, recording 5.574 billion euros (43.849 billion yuan), an increase of 2.8%. Most of the growth in China has come from the men's care sector.

    5. Second-quarter sales of Sasa International slumped 20.8%, mainly due to drastic drop in the number of visitors to Hong Kong.

    6. The pre-sale of Tmall 2019 double 11 shopping carnival started at 0:00 on October 21. Data shows the transaction volume of 7 beauty brands, including Estee Lauder, Lancôme, L'oreal, SHISEIDO, Helena Rubinstein, Olay and Whoo, exceeded 100 million yuan in first 10 minutes.

    7. P&G's China continues to maintain steady growth, with sales up 13% year on year in the July-September period, especially as high-end SK-II and Olay skincare brands enjoy rapid growth.

    Disclaimer: all images used are from the internet.

    Related Link

    [1] September Recap: Monthly Digest: China Cosmetic Industry Review | September 2019
    [2] August Recap:  China Cosmetic Industry Review | August 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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