(From left to right: Du Min, Co-founder, CHAILEEDO; Cai Zhaoyang, Co-founder, CHAILEEDO; David Schlossman, Founder & President of Kobo; Li Huihua, Co-founder, CHAILEEDO; Shao Yun, Vice President of Research and Development of Kobo)
“Communication is very important. When answering questions, we can reflect on what we have done, the significance of our work and our shortcomings.” Before the interview officially began, David Schlossman, president of Kobo Products Inc., a world-renowned raw material manufacturer, said. He expressed his thoughts very humbly and welcomed the arrival of CHAILEEDO’s US Tour.
During the 3-hour interview, David expressed his deep thinking including history and business of Kobo, changing of the global color cosmetics and sunscreen market. This second-generation entrepreneur with a background as a certified public accountant, after working for his father’s company for several years, established Kobo Then he expanded it from a local raw material supplier in the United States to an international company that spans across the Americas, Europe, and the Asia-Pacific region. Kobo has established a prominent position in the color cosmetics and sunscreen ingredient industry.
As the helm of the company, David’s professionalism and calmness make us believe that Kobo’s success is not only about choice and luck, but also about “everything depends on people”.
Leading the world with “the most complete range of colors”
In today’s global cosmetics raw material industry landscape, whether it is base raw materials such as oils, powders, flavors and fragrances, or active substances, European, American and Japanese raw material companies have long been at the forefront. Kobo, founded in 1987, is also a leader. The best among them.
It is understood that Kobo has a wide range of surface treatment pigments and dispersion palettes, with about 250 kinds of toners in different media. David told CHAILEEDO, “In terms of color cosmetics, our surface treatment pigments and pigment color numbers may be the largest in the industry.”
Looking back on history, Kobo has become a world leading supplier of cosmetics raw materials. This is not only because of its early start-up, but also because of the company’s continuous development of new raw materials during more than 30 years. Kobo was born at a time when not only the economies of Europe, America and Japan continued to grow, but also when cosmetics groups such as Estee Lauder, L’Oréal, and Shiseido set off a wave of mergers and acquisitions for expanding around the world. During this period,color cosmetics have become the focus of competition. For example, in the 1990s, L’Oreal acquired Maybelline, and Estee Lauder acquired M.A.C. and Bobbi Brown. At the same time, Japanese and Korean cosmetics groups collectively emerged, and global beauty groups accelerated their development worldwide including in China..
The pace of expansion of international companies has invisibly promoted the prosperity and integration of the U.S. and global cosmetics markets, and has also given rise to many new business opportunities. “In the 1980s, Japan was leading in materials engineering. Since then, we have been an agent of some companies like Nikko Chemicals supplying materials such as microspheres and surface active treatments.” Shao Yun, who has worked at Kobo for 27 years and is currently the Senior Vice President of R&D at Kobo, told CHAILEEDO. He stated that Kobo was once the world’s largest microsphere agent.
It is understood that microspheres are mainly used in cosmetics to adjust skin texture, conceal blemishes, and cover spots. They can also be added to skin care products to help improve skin transparency and natural brightness. The surface active treatment of toner is like “scraping putty” on the wall during decoration. Toner without surface treatment will easily agglomerate when used in the formula, resulting in poor quality. The durability, uniformity, and final finish of the formula will likely be inferior without the surface active treatment. It can be said that the application of microspheres and surface active treatment in cosmetics is essential.
Kobo initially established its position as a leading supplier through its raw material agency business and surface active treatment. But The Company is not satisfied with the status quo. In 1995, Kobo acquired the cosmetics division of Biovector Therapeutics and established Kobo Products, SAS in France. Afterwards, Kobo began producing active carriers. In the same year, production of dispersion pastes began at the New Jersey facility (K1), marking a gradual transition towards becoming a production supplier.
Since then, as the scale of the color cosmetics market has continued to grow and the demand for powders has increased, Kobo has gradually focused its main energy and investment on expanding its production capacity for surface treatment of powders.
According to David, the current ratio of Kobo’s independent production and agency business is about 6:4, with overseas business contributing 50%. It is understood that in addition to the United States, Kobo has branches in France, Japan, Brazil and the United Kingdom, as well as independent agents around the world.
Currently, Kobo’s products include surface-treated pigments, microspheres, physical sunscreen agents, pigment dispersions, sustained-release and controlled-release delivery packaging systems, etc., and are involved in the fields of color cosmetics, skin care, skin care, and sun protection.
It is worth mentioning that in 2021, Symrise acquired a 25% minority stake in Kobo. At the time of the initial acquisition, Symrise affirmed Kobo’s prominent position in powder surface treatment and sunscreen agents. Because of this, in 2023 Symrise once again increased its holdings in Kobo.
This also confirms Kobo’s strength in the field of color cosmetics and sunscreen ingredients. However, what surprised CHAILEEDO was that when David talked about Kobo’s advantages, he instead emphasized the company’s leadership in regulatory compliance, “We have many products customized specifically for customers. The regulations in many Western regions are actually very strict, so a large part of our energy is to track changes in the market and regulations to ensure that the raw materials we develop can meet the needs of customers.”
Therefore, the new “China Cosmetic Ingredient Notification Code” regulations that previously troubled international raw material companies are easy for Kobo. David jokingly and seriously said, “Regulations are not a big problem. The most troubling problem for us is the tariffs.” ”
David said, “I don’t think China’s cosmetics regulations are more stringent than those in the United States and Japan. Through hard cooperation with Chinese agents and large international corporate customers in China, we can ensure that all raw materials can meet the requirements of Chinese regulations. ”
In the next three to five years, Kobo plan to build a factory in China
In fact, Kobo is also well-known in the Chinese cosmetic raw material industry. During our visits, many industry insiders expressed their recognition and praise to CHAILEEDO. However, in David’s opinion, Kobo can do better in the Chinese market.
David admitted frankly that compared with before the epidemic, sales in the Chinese market have decreased. “On the one hand, logistics and transportation were hindered before, and the supply to some markets in China would be very slow. On the other hand, we have also developed some new products in the past few years. For our products, several important customers have high demand, which has further compressed our original production capacity, resulting in slower supply and response to the Chinese market, causing us to lose a lot of business opportunities.”
“Chinese companies are very fast and their products are launched very quickly, which means there will be a lot of opportunities, but sometimes it is also a challenge for us because our goods are not available or the price is too high, so we lose money.” David further added.
According to Shao Yun, Kobo has not yet established a branch or production base in mainland China. Connell serves as the exclusive agent and is responsible for developing the market. According to public information, Connell was founded in 1895 , one of the largest specialty chemicals distributors in the Asia-Pacific region.
In addition, Dr. Ding Li, Chief Scientific Officer of Kobo France, is undoubtedly another “spokesperson” of Kobo in China. She travels between France and China many times a year and is active in PCHi Materials Exhibition and other occasions, playing the role of Kobo’s global representative.
CHAILEEDO also noticed that Connell and Kobo have regularly organized a series of online seminars starting in 2021. The discussion topics include raw materials, technology, trends, formulation processes, etc., covering color cosmetics, skin care, wash care, sun protection, etc. In various fields, Ding Li is the main speaker.
“Because of the epidemic, we couldn’t chat face to face like this before, so we gave a lot of online lectures. Ding Li is currently in Shanghai promoting sales, and our agents often write articles to introduce Kobo products.” Although she is in the United States, But David has a good understanding of the Chinese market, which also gives him confidence in the Chinese business.
Nowadays, with the continuous recovery of the color cosmetics and sunscreen markets and the improvement of its own production capacity, David hopes that Kobo will do more in the Chinese market. “In the United States, Brazil, and France, our powder surface treatment capabilities have improved a lot, and our supply capabilities in China will also be strengthened in the future, which will be of great help to us in occupying the market.”
He also revealed that within the next three to five years, Kobo will set up a branch in China and put localized production on the agenda. Starting next year, it will also increase sales and adjust prices. “So starting next year, there will be a bigger presence in China. I hope that can strengthen our sales.” David hopes that in the near future, the sales proportion of the Asia-Pacific region, including China, can increase to 25%, while the current figure is only 10%.
It is worth mentioning that in the past, European and American brands dominated global beauty trends, but now, as China has become the world’s second largest beauty market, Chinese brands are also becoming a leading force in beauty trends. David believes that “China is slowly developing as a mature market. In the process, localized brands will be born. In addition, the improvement of production capacity and process standards will drive the quality of China’s entire cosmetics manufacturing industry to rise. Then domestic brands will keep getting better, which is a natural phenomenon.”
Just like the air-cushion BB cream was driven by Korean culture and became popular all over the world, in the future, he believes that Chinese brands may also emerge internationally as Chinese culture goes global.
“Clean and natural” are key words for color cosmetics and sunscreen ingredients
Judging from the trends in the global beauty market, there is no doubt that natural, low-carbon and sustainable are key words that cannot be avoided. In the field of color cosmetics and sunscreen, David also said frankly, “In the past, we only had to ensure that the raw materials were safe in human testing, and there were no requirements for the source of raw materials and low-carbon environmental protection in production. Now the requirements are becoming more and more stringent.”
Low carbon and sustainability have also become compulsory courses for international companies. David said that in recent years, Kobo has also increased its investment in low-carbon sustainability. For example, in the surface active treatment, where Kobo excels, Kobo has launched ASGP, which is a natural surface treatment that uses glutamic acid derivatives and hydroxystearic acid polymers instead of traditional silicones to surface treat powders. Combined with a unique production process, the surface-treated powders exhibit excellent dispersibility in formulations, thereby reducing the requirements for equipment and energy consumption in formula production.
Another example is plastic microbeads, which are widely used in cosmetics and personal care products, and are facing the end of being banned. This means that companies urgently need to find pure raw materials to replace microplastics.
“The polyethylene or nylon used in the past can no longer be used. We have spent a lot of energy to develop and use some biodegradable raw materials.” David told CHAILEEDO.
Not only plastic microbeads, but also some chemical sunscreens are becoming “killers” of marine life. The U.S. National Park Service has released a set of data showing that 4,000 to 6,000 tons of sunscreen washes into the ocean from swimmers around the world every year, and 10% of coral reefs are threatened by bleaching. Coral reefs are home to a quarter of marine species and are known as the “tropical rainforests of the ocean.”
In order to repair coral reefs, some areas have begun to ban the sale of sunscreens containing chemicals that are harmful to marine corals. In addition, the US FDA has proven through a large number of tests that chemical sunscreens can be absorbed by the skin and enter the bloodstream. Therefore, whether from the perspective of environmental protection or safety, the market is turning more attention to inorganic sunscreen.
David told CHAILEEDO that the sunscreens in organic sunscreens are synthetic substances derived from petroleum, not from natural sources. And inorganic sunscreens (also called physical sunscreens) usually use minerals such as titanium dioxide and zinc oxide as sunscreens. The principle is to absorb and It scatters to shield ultraviolet rays and does not penetrate the skin.
In David’s view, inorganic sunscreen is an important trend, and the sun protection performance of inorganic sunscreen against UVA and UVB is related to the dispersed particles of sunscreen. Kobo has conducted research on inorganic sunscreen for a long time and has mastered the control of particles in this regard. Key technologies, big and small, are great opportunities for Kobo.
However, these changes will inevitably bring challenges to enterprises and society. Petroleum-based materials are large-scale and relatively cheap, while natural substitutes are relatively small-scale and generally very expensive, which not all companies can afford. David believes, “In the long run, natural products also require resources and land, so they may also compete with food supply in the future. This is also a problem that humans need to weigh and solve.”
Always learn and always be new, keep pace with the times
Although both the color cosmetics and sunscreen markets have slowed down during the epidemic, color cosmetics is still the largest category in the United States, and people’s awareness of sunscreen exceeds that of many other regions around the world. As for consumption diversification and refinement, for Kobo, there is still a lot of room for growth and improvement in the fields of cosmetics and sunscreen.
CHAILEEDO learned that in Europe and the United States, due to the diversity of skin colors, races, and cultural aesthetics, a color cosmetics item from a big-name brand can usually have 40-60 shades. However, for some small brands, there are so many designs. The numbers of shades are often difficult to cover the cost. To this end, David told CHAILEEDO, “Kobo will have an insight into market trends, simplify shades and provide them to customers to meet the requirements of mainstream skin colors.”
David also believes that the color stability of cosmetics is the basis for establishing a trusting relationship with consumers. “If a patron finds that a product looks perfect, but when it is applied on the skin and finds that the coverage is actually different, then it may be negative for the brand. Trust is shaken.” He pointed out, “We have cooperated with many large companies and found that there is still a lot of room for improvement in the stability of some raw materials. So what we have to do is to improve the accuracy and stability of the color between each batch. This can help customers achieve ‘first time right’ without having to adjust colors all the time during production.”
In addition, the United States is an important birthplace of the ingredient-oriented consumers in skin care, and effective skin care is still popular there. In the field of skin care, although Kobo does not directly produce active substances, it does a lot of research on packaging and delivery technology. David told CHAILEEDO that the French team led by Ding Li is studying a carrier technology for bioactive substances, using 200 nanometer microspheres to wrap active substances such as VC and VE to make the ingredients more stable and ensure the stability of skin care products. play an effective role.
In general, innovation in cosmetics is inseparable from innovation in raw materials, formula technology, and processes. As a source company, it is commendable that Kobo is always sensitive to feedback from customers and market terminals. As David said, “Mobility makes people progress.” This is both his business philosophy and perhaps the secret to Kobo’s ability to stay ahead of the industry.
Thank you to Chinese American Cosmetic Professional Association for your generous support of the column of CHAILEEDO’s US Beauty Tour!
