Monthly Digest: China Cosmetics Industry Review | January 2021

Company dynamics

1.       Two high-end cosmetic brands, La Prairie and HERMES, opened their Tmall Official stores this month. Gucci Beauty Tmall store is expected to open in February.

2.       The parent company of usmile, a domestic electric toothbrush brand, is planning an IPO on the domestic stock exchange.. Before 2015, the Chinese electric toothbrush market was dominated by international brands, such as Oral B and Philips. Domestic brands entered the competition after 2015. Usmile was founded in 2015 and launched its first product in 2016. At present, it has accounted for 11.2% of the total market share on Tmall, surpassing Oral B and only ranking after Philips.

Usmile toothbrush

3.       YAT, a social media brand focusing on sensitive skincare, has acquired a new round of financing, securing tens of millions yuan. Its self-owned skincare brand has an annual GMV of 60 million yuan. See more details on ChemLinked’s interview with YAT’s CEO.

4.       Perfect Corp, a Taiwan beauty tech service company, completed a C round of 320 million yuan financing. This company was founded in 2015, mainly providing consumers with with online AR and AI makeup experience.

5.       New domestic male care brand MAKE ESSENCE completed RMB 150 million of financing, marking its fifth round of financing within one year.

Founded in 2020, the new brand achieved remarkable sales in 2020, with total GMV in 2020 Q4 reaching nearly 100 million yuan.

6.       Shiseido planned to sell its shampoo and affordable skincare business, including TSUBAKI and uno, to CVC Capital Partners. Affected by the COVID19 outbreak, Shiseido’s sales decreased 22.8% in the third quarter of 2020. Therefore, Shiseido tried to shift its focus to premium cosmetic products.

7.       Juliette has a gun, a French niche perfume brand, gained investment from Cathy Capital, again implying the great potential of the niche perfume market. Juliette has a gun entered the Chinese market in 2018. In the 2020 Double Eleven Festival, the brand entered the Tmall Top3 selling high-end perfume brand list, with a sales record of more than 10,000 units in one hour.

Juliette has a gun

Financial report

1.       On January 20, P&G released its second-quarter financial report in the 2021 fiscal year. P&G's net sales in the second fiscal quarter were 19.745 billion dollars, an increase of 8% year-on-year; net profit was 3.887 billion dollars, an increase of 4% year-on-year.

2.       On January 20, SaSa, a Hong Kong cosmetic retailer, released its third fiscal quarter financial report. Its turnover in the third quarter was 938 million HK dollars, a year-on-year decrease of 36.4%. Its revenue was 2.224 billion HK dollars, a year-on-year decline of 54.3%.

3.       On January 26, L’Occitane announced its unaudited results as of December 31, 2020. In the third quarter of fiscal 2021, the group’s overall sales increasing by 4.3% to 572 million euros, implying a recovery trend. In the third quarter, the group’s growth in the Asia-Pacific market was exceptionally impressive: the mainland China, Taiwan (China), and Japan markets recorded 28.9%, 14.7%, and 10.6% growth, respectively. Conversely, L'Occitane US branch has filed for bankruptcy protection to further accelerate the reorganization of U.S. stores.

Data browsing

1.       In 2020, China’s total retail sales of social consumer goods amounted to 39.1981 trillion yuan. Among them, the cosmetic sector’s annual retail sales were 340 billion yuan. Its retail sales in December 2020 were 32.4 billion yuan, with a 9.0% YoY growth rate.

2.       Data from the General Administration of Customs show that, from January to December 2020, China’s total imported beauty products and toiletries amounted to approximately 140 billion yuan, a year-on-year increase of 29.7%.

3.       On January 14, National Medical Products Administration announced at a media conference that China had become the second-largest cosmetic consumption market globally. The number of cosmetic manufacturing companies reached 5400, and filing cases amounted to 1.60 million.

Regulatory Compliance

1.       On January 6, 2021, China National Medical Products Administration (NMPA) released the draft Instructions for Toothpaste Notification Dossiers for public consultation. The draft Instructions for Toothpaste Notification Dossiers clarify the dossiers' requirements for toothpaste notification, toothpaste classification and coding system, permitted efficacy claims, requirements for efficacy evaluation and safety assessment, etc. More details on ChemLinked.

2.       On January 12, 2021, the final version of Administrative Measures on Cosmetics Registration was officially published and will take effect on May 1, 2021. The Administrative Measures clarifies the basic requirements for registration and notification management of cosmetics and new cosmetic ingredients, including some new concepts, patent protection for the new ingredients, ingredient traceability management, annual reporting, etc. More details on ChemLinked.

3.       In January 2021, the French government announced that it would issue the GMP certificates for local cosmetic manufacturers to import general cosmetics to China without mandatory animal testing and has already launched an online platform to obtain the certificates. More details on ChemLinked.

4.       On January 22, 2021, China National Institutes for Food and Drug Control released the draft amended List of Prohibited Ingredients for Cosmetics and List of Prohibited Plant (Animal) Ingredients for Cosmetics for public consultation. The main amendments include adding 17 prohibited ingredients, amending 13 prohibited ingredients and 27 prohibited plant (animal) ingredients, classifying and merging prohibited drug ingredients into three categories, and modifying some text contents. More details on ChemLinked.