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Monthly Digest: China Cosmetics Industry Review | November 2020

Major Events

1.       The third China International Import Expo (CIIE) opened in Shanghai on November 5. In the Expo, the cumulative intentional turnover reached 72.62 billion dollars, and 411 new products, services and technologies were displayed. Big cosmetic companies, including L’Oreal, Estee Lauder, P&G, Unilever, Shiseido, Amorepacific, etc, all showed up in the Expo and exhibited their latest brands and products.

2.       This year’s Double 11 shopping festival lasted 11 days, from November 1 to November 11. In this period, the e-commerce turnover amounted to 840.3 billion yuan. Tmall accounted for 59.3% of the turnover, ranked first, followed by JD whose proportion at 25.3%. Among all industries, the cosmetic industry’s turnover ranked fourth. Live-streaming played an essential role in this year’s Double 11. Its turnover reached 72.9 billion yuan. More details about 2020 Double 11 shopping festival can be found in the CL double 11 report.

3.       On November 18, Haikou, the capital of Hainan Province announced that they would add 4 off-shore duty-free stores and expand the business areas of luxury brands by the end of this year.

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IPO & Financing

1.       On October 30, BOTANEE Group, the parent company of Winona, passed the examination of Chinext board, meaning that its IPO is around the corner. Winona, as the most famous skincare brand focusing on sensitive skin, achieved great sales in Double 11. It was the only domestic skincare brand in the Top10 skincare brands list on Tmall.

2.       On November 5, Kuaishou, the top vlog platform in China officially submitted its prospectus to Hong Kong Exchanges. The prospectus shows that the revenue of its online marketing service and e-commerce grew rapidly in 2020.

3.       On November 5, ByteDance, the parent company of Tik Tok and Douyin, completed another round of financing, gaining 2 billion dollars.

4.       On November 18, GeoSkincare, a New Zealand skincare brand but operated by a Chinese team, completed its E-round financing, securing 350 million yuan. The parent company has planned to launch an IPO on Chinext in 2020. More information can be found on ChemLinked.

5.       On November 18, Blue Moon, a homecare brand, updated its prospectus on the Hong Kong Exchange website. It is going to launch its IPO in December. This company is a giant in the laundry detergent category.

6.       On November 18, Jinsanjiang successfully launched an IPO in Chinext. It is the main ingredient supplier for many famous toothpaste brands, such as Yunnanbaiyao, Colgate, Unilever, Crest, etc.

7.       On November 19, Yatsen Global, the parent company of Perfect Dairy, successfully launched an IPO in the U.S.

8.       On November 20, Sanda Cosmetics, a domestic cosmetic company, updated its prospectus. Affected by the pandemic, its revenue dropped by 21.53% from January to September.

9.       On November 24, Kay Tune, an e-commerce operation company, passed the examination of Chinext board. Kay Tune is the operator of the e-commerce business of Avene.

10.   In November, Qingmu Technology, another e-commerce operation company, submitted its prospectus to Chinext. Qingmu’s clients include Filorga, Colgate, HM, Ecco, etc.

11.   On November 27, Lin Qingxuan, a domestic skincare brand, announced the completion of A-round financing, securing several hundred million yuan.

Data browsing

1.       According to the National Bureau of Statistics, the total retail sales of social consumer goods in October amounted to 3857.6 billion yuan, a growth rate of 4.3%. The cosmetics category’s retail sales in October were 28.1 billion yuan. Its growth rate (18.3%) is the highest among the figures for all other categories.

2.       According to Qichacha, the Chinese cosmetic industry now has 8.754 million relevant companies. In the third quarter of 2020, 742000 new companies were registered. 74% of these companies have lower than one-million-yuan registered capital, implying that most new registered companies are small to middle sized enterprises.

3.       According to China Perfume Industry Research White Book 1.0 published on November 24, China’s perfume market is expected to reach 12.57 billion yuan, 104% higher than recorded in 2017.

Regulatory compliance

1.       On November 5, the National Medical Products Administration (NMPA) released the second edition of Instructions for New Cosmetic Ingredient Registration and Notification Dossiers for public consultation. More details can be found on ChemLinked.

2.       On November 5, the National Medical Products Administration (NMPA) released the second edition of Guidelines for Cosmetic Efficacy Claim Evaluation for public consultation. More details can be found on ChemLinked.

3.       On November 5, the National Medical Products Administration (NMPA) released the second edition of Instructions for Cosmetic Registration and Notification Dossiers for public consultation. In the new edition, the exceptional circumstances of animal testing exemption are reduced from 4 to 3. More details can be found on ChemLinked.

4.       On November 6, 2020, State Administration for Market Regulation of China ("SAMR") released the Guidelines to Strengthen Online Live Streaming Marketing Activities Supervision. This guideline further regulates online live streaming sales and marketing activities. More details can be found on ChemLinked.

5.       On November 12, 2020, China National Institutes for Food and Drug Control (NIFDC) opened a public consultation on 7 cosmetic testing methods, which are related to boric acid and borate, tretinoin and its derivatives, 47 kinds of hair dyes, and efficacy evaluation of freckle removing and whitening and anti-hair loss. More details can be found on ChemLinked.

6.       On November 13, 2020, China NMPA unveiled Administrative Measures on Toothpaste for public consultation. More details can be found on ChemLinked.

7.       On November 12, 2020, China NMPA released the draft Measures for the Management of Cosmetic Supplementary Testing Methods for public consultation. More details can be found on ChemLinked.

8.       On November 15, China and 14 other countries signed the Regional Comprehensive Economic Partnership (RCEP) Agreement at the virtual-hosted ASEAN Summit, formalizing the largest free trade agreement (FTA) in history. Further interpretation can be found on ChemLinked.

New products

Skincare

Pianzaihuang, a   Chinese medicine company, released a new product named Little Blue Bottle. As   there is a “Little Brown Bottle” from Estee Lauder and a “Little Black Bottle”   from Lancome in the market, this Pianzaihuang’s new product seems to want to   follow this naming pattern.

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Beiersdorf, the   parent company of Nivea, launched a skincare brand tailored for the Asian   market, Chaul. The main ingredient of this brand is fermented tea.

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L’Occitane   released Holiday Ribbon Limited Edition gift boxes for Thanksgiving.

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HAYMAY and Strawberry   Music Festival crossover cooperated to launch a blind gift box (a blind gift   box refers to consumers not knowing what is inside the box before opening it),   containing the different combinations of a beauty blender, a cleansing, and a   perfume.

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Makeup

Colourpop   promoted Holiday Limited products, Amoureux series.

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Liby, the   laundry liquid giant in China, entered the makeup market by launching a new   makeup brand, BANYUEFUSHENG. Chinese fashion is this brand’s selling point.

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