Editor's Note: This article was originally published on June 30, 2022, and was updated on July 27, 2022, as per the latest developments.
On June 22, 2022, the draft of Several Provisions on the Innovative Development of Cosmetics Industry in Shanghai Pudong New Area (Provisions) was deliberated on the 41st Session of the Standing Committee of the 15th Shanghai Municipal People's Congress. After a two-week commenting period, the finalized Provisions were issued on July 21, and will take effect on August 1, 2022.
The Provisions has 24 articles and mainly includes four aspects: improving the management system, cultivating new models and new formats, promoting the commercialization of scientific and technological achievements, and solving the bottleneck in the cosmetics industry. The Provisions applies to cosmetic enterprises in Pudong New Area. The notable measures and requirements are summarized below.
1. Realizing Customized Cosmetics and Personalized Services
The Provisions focuses on new concepts and directions in customized cosmetics and personalized services. It proposes to encourage cosmetic enterprises to accurately develop general cosmetics that meet the individual needs of consumers (hereafter referred to as “customized cosmetics”) and allows notifiers in Shanghai to set up business premises in the Pudong New Area to provide consumers with personalized services.
Fan Jun, sales director of Shanghai Lanmeiyi Cosmetics Co., Ltd., believes that personalized services may cover products such as shampoo, shower gel, perfume, handmade soap, bath ball, hairspray, and perfume stick, which is a bold attempt for the cosmetics industry in China. 2
Personalized Cosmetics Have Great Market Potential
In the previous China International Import Expo, personalized cosmetics were well exhibited. Intelligent skin diagnosis systems, customized skincare systems, and smart phototherapy beauty instruments were also featured strongly. Gao Xiangqin, president of Amore Pacific China, said that personalization and customization would be the future of the cosmetics industry. 3
"Many enterprises have seen the huge potential of personalization and customization, and the awakening of consumer awareness will also catalyze the popularity of the customization model. In the Chinese market, there are 500 million young people. They don't necessarily want expensive products but want products that show their personalities. They are willing to pay a higher price for customization."
Customized cosmetics and personalized service have always been the focus of the cosmetics industry, and it is expected to be realized in China once the Provisions is implemented. If the market can operate in compliance with regulations and continuously improve the accuracy of customized cosmetics and personalized service, it will be beneficial to consumers and brands that are ready to enter this field. 2
The Provisions optimizes the customs clearance for imported cosmetics, such as allowing Chinese labels to be affixed in special customs supervision zones, exempting samples and cosmetics for exhibition display from registration, notification and import inspection.
Under the circumstance that the process of labeling the primary packaging of imported cosmetics has been completed and can be traced, the overseas cosmetics registrants, notifiers or their domestic responsible persons can label the Chinese name and the durability of the products on the primary packaging, then package the products and affix the Chinese labeling in the special customs supervision zones of Pudong New Area. Whoever carrying out the activities shall not be in contact with or expose to the cosmetic contents;
Cosmetics samples imported for registration or notification inspection, as well as cosmetics imported for exhibition display (not for trial or sale), can be exempted from providing the registration license and notification certificate, and be exempted from the import inspection;
With the approval of the customs, after the end of the cosmetics exhibitions in Shanghai, the imported cosmetics displayed at the exhibition can be converted into bonded goods in the special customs supervision zones. Qualified cosmetics are allowed to be sold through cross-border e-commerce.
3. Ingredient Supply Platform and Quality Management Services
The Provisions proposes to establish a cosmetic ingredient supply service platform by the cosmetic industry association, industrial park’s management agency or a third-party agency to provide ingredient supply and quality management services for cosmetic registrants, notifiers, and entrusted production enterprises in Pudong New Area. The operating agency of the ingredient supply service platform shall establish an ingredient purchase inspection and recording system, strengthen the inspection, testing, storage and transportation management of ingredients, and keep records of ingredient purchase and supply.
An ingredient supplier mentioned, "Without precedent in China, if this measure is implemented, it will promote the development of the enterprises in Pudong New Area."
As the impact of COVID-19 is reducing, the cosmetics industry in Shanghai is accelerating its recovery. In early June, the executive meeting of the Shanghai Municipal Government stated to speed up the creation of a high-end industrial cluster of fashionable consumer goods with cosmetics as an important part. Some persons in charge of cosmetics enterprises in Shanghai believe that "the importance of the cosmetics industry in Shanghai will be further increased, and the industry will embrace greater opportunities."
The promulgation of this Provisions is expected to solve the common problems of enterprises in the Pudong New Area and allow them to gain more convenience and development opportunities.