Market updates
1. WWD Beauty Inc ranks the world’s largest beauty manufacturers. Firms are ranked by their beauty sales for the 2019 calendar year. For this list, “beauty” includes fragrance, makeup, skincare, body care, sun care, hair care, deodorant, plus cellulite and shaving products. It does not take into account bar soaps, razors, toothpaste, food and diet foods, medicines, vitamins, or detergents. The revenues only include sales of beauty products each firm manufactures and do not include business from private-label lines or products distributed for other companies.
2. Tmall 618 began on May 25 and will issue 10 billion cash coupons for online consumption to boost domestic demand. At present, more than 100,000 brands have signed up to participate in this year's Tmall 618, which is double that of last year's 618.
3. According to the data from the National Bureau of Statistics, in April, the total retail sales of consumer goods was 2817.8 billion yuan, a YoY decrease of 7.5%. The retail sales of cosmetics was 22.4 billion yuan, a YoY increase of 3.5%. Regarding the performance of different categories, except for daily necessities such as food and medicine, cosmetics are one of the fastest recovering categories.
Regulatory compliance
1. China established new CBEC comprehensive pilot zones in 46 cities and regions. Qualified cities and regions are expected to join the list of CBEC pilot cities in the future.
More information:
2. Jing Zhu, a member of the Chinese People's Political Consultative Conference (CPPCC), has proposed the abolition of the cosmetic consumption tax in a proposal submitted during China’s annual Two Sessions meetings.
More information:
https://cosmetic.chemlinked.com/news/cosmetic-news/will-china-abolish-consumption-tax-on-cosmetics
3. According to an announcement by China NMPA, administrative licensing items for cosmetics, drugs, medical devices, and special foods resumed on May 25. The approval certificates will continue to be delivered by mail. Enterprises who have to conduct face to face business or receive the approval certificates in person shall make an appointment through the online reservation system in advance. Only after successful reservations can enterprises enter the acceptance hall.
4. On May 25, the National Cosmetic Safety Science Popularization Week 2020, sponsored by National Medical Products Administration (NMPA), was officially launched. During the publicity week, under the guidance of NMPA, China Association of Fragrance Flavour and Cosmetic, together with seven well-known cosmetic companies, started a nationwide green recycling project for cosmetic packaging materials such as empty bottles.
5. NMPA’s Key Laboratory of Cosmetics Risk Assessment was approved and established under guidance of the Guangdong Institute for Drug Control. It will carry out research on data analysis, risk identification, key technologies, and build a system for risk assessment.
Company dynamics
1. In May, Revlon launched all the brand’s products in its Tmall Official Flagship Store. The store opened in fall 2019.
2. Perfect Diary acquired another domestic makeup brand, Little Ondine. The target sales of this brand are 400 million yuan this year.
Lip glaze from Little Ordine
3. On May 6, Fujian Green Pine Co. LTD announced plans to acquire the remaining 10% of its subsidiary, NOX BELLCOW. Fujian Green Pine Co. Fujian Green Pine Co. LTD is mainly committed to the development, production, and sales of turpentine deep processing products, while NOX BELLCOW is a cosmetic manufacturing company with the world’s largest facial mask production capacity.
4. Dior and Meitu have reached a strategic cooperation to develop the Dior AI skin testing function to provide personalized skincare solutions for consumers.
Dior &Meitu
5. On May 14, AMOREPACIFIC Group announced the establishment of a partnership with the Australian high-end skincare brand RATIONALE Group. Amore will hold 49% of the shares of RATIONALE Group. The main purpose of this transaction is to improve Amore's high-end brand product portfolio and lead the trend of "personal custom cosmetics."
6. On May 20, Sephora, a high-end retailer from the LVMH Group, officially entered Tmall Global (a CBEC platform). Many beauty brands that haven’t entered China can now be purchased through Sephora Tmall Overseas Store. At present, there are over 600 products from 25 brands in the store, including skincare, fragrance, hair care products. Nine overseas popular niche brands, including SundayRiley, NatashaDenona, were exclusively launched on Sephora Tmall Overseas Store.
7. On May 24, Roger Gallet, a perfume brand from L’Oreal Group, informed its members that it would close its Tmall Official Flagship Store on June 30. This store now has 511,000 members. The brand will still participate in the 618 promotion.
ROGER GALLET’s Tmall Official Flagship Store
Financial report
1. On May 1, Estée Lauder announced its third-quarter results for the fiscal year 2020 ending March 31. Net sales fell 11% to $ 3.35 billion, translating to a net loss of $ 6 million. Estee Lauder's largest growth engines namely travel retail and the Chinese market have been severely affected by the impact of the pandemic.
2. On May 5, Baiersdorf announced its first-quarter results. The company's sales were 1.91 billion euro, decreasing by 3.6%. La Prairie, a high-end brand, was particularly hit by the reduction in international travel, which fell 35.8% YoY in the first quarter; Nivea was relatively stable, with sales only falling by 0.6%; EUCERIN and AQUAPHOR increased by 11.5%.
3. On May 12, Shiseido Group released financial data for the first quarter of fiscal 2020. The data shows that as of March 31, 2020, the Group achieved sales of 226.893 billion yen, a YoY decrease of 17.1%. Its operating profit was 6.496 billion yen, a YoY decrease of 83.3%. In the first quarter, brands such as SHISEIDO, CPB, Elice, IPSA, Anzhesha, NARS, and others all experienced serious declines, with the first three falling 21%, 22%, and 31% respectively. However, because of the steady performance of e-commerce, Drunk Elephant offset the offline decline and achieved 14% growth.
4. In the first fiscal quarter ended March 31, Revlon’s sales fell 18.1% to $ 453 million, and its net loss increased from $ 75.1 million in the same period last year to $ 213.9 million. By brand, sales of core brand Revlon fell 26.5% to $ 181 million, Elizabeth Arden fell 14.5% to $ 95.2 million, and the perfume business decreased by 14.6% to $ 66 million.
5. L'Occitane announced its fourth-quarter results for the fiscal year 2020 as of the end of March. The Group's net sales were 338 million euros, a 1.6% decline. In the fourth quarter, core brands L’ Occitane and LimeLife fell 12.1% and 11.0% YoY, respectively. Benefiting from the strong growth of e-commerce and TV channels, ELEMIS maintained strong growth throughout the year and increased by more than 20%.
We provide full-scale global cosmetic market entry services (including cosmetic registering & filing, regulatory consultation, customized training, market research, branding strategy). Please contact us to discuss how we can help you by 
