In recent years, China’s cosmetics market has grown rapidly, ranking second in size at $81.1 billion in 2021, with a 15.5% share, making it the second-largest consumer of cosmetics in the world. Euromonitor predicts that Premium beauty sales are expected to grow at a compound annual growth rate (CAGR) of 13%, with the Premium beauty market growing further to 53% by 2025. It is safe to say that the premium beauty market in China is one of the most promising opportunities today.
International brands have been very bullish on the Chinese market. L’Oréal Paris ranked the No.1 beauty brand in the 6.18 Shopping Festival on Tmal in June this year. Estée Lauder announced strong double-digit growth in online sales in Asia Pacific in its FY2022 figures. And Shiseido released its FY2022 first-half earnings report, with China surpassing Japan as its top market.
Currently, many international companies have now made investments in China. For example, L’Oreal has invested in the Chinese fragrance brand Documents and Shiseido has invested in the Chinese recombinant collagen ingredient company NEO-HEALTH. In addition, according to U.S. Department of Commerce data showed that in 2020, the U.S. exported $838 million of personal care and cosmetic products to China, up 2.2% from the previous year.
However, since January 1, 2021, the Cosmetic Supervision and Administration Regulation has been in effect, and China’s cosmetic regulation has entered the 2.0 era. The regulatory environment in China can be challenging for foreign companies, with many barriers to entry. All cosmetic products sold through traditional channels (except for cross-border e-commerce channels) must be approved by the National Medical Products Administration (NMPA).
In addition, there are many overseas companies concerned about exemptions from animal testing. The NMPA officially released the Provisions for Management of Cosmetic Registration and Notification Dossiers, which went into effect on May 1, 2021. The regulations state that manufacturers of common cosmetic products that have obtained the relevant qualification certification of the product quality management system issued by the government supervisor of the country (region) where they are located, and where the results of the product safety risk assessment can adequately confirm the safety of the product, are exempted from submitting the toxicology test report of the product. This means that overseas cosmetics that meet the relevant conditions may be exempt from animal testing.
ZMUni is a professional third-party technical service consultancy, it provides a comprehensive range of services for beauty and personal care products to ensure regulatory compliance. CHAILEEDO is honored to invite ZMUni to share an analysis of related policies on Chinese beauty cosmetics.
A: ZMUni is a consulting company with a team of over 60 full time consultants. We mainly specialize in product compliance for cosmetics, food, and other categories in the Chinese market. Our vision is to Become a leading company for global product compliance and quality management.
Q: What beauty brands does ZMUni have partnered with?
A: We have already partnered with cosmetic brands from many countries,like Sesderma, Germaine de Capuccini, Skeyndor, MSB, etc.
Q: Why do overseas beauty brands want to enter the Chinese market?
A: According to the Customs statistic data, in September 2022, for the beauty cosmetics, the import mass of washing and personal care category reached 37,160.1 tons and 13.82 billion yuan. Though it decreased 20.97 percent from the same period last year, the Chinese cosmetic market is still the world’s second largest cosmetic market. It is still one of the most promising markets in the world with 1.4 billion people.
Q: What are the steps for overseas beauty brands to enter the Chinese market?
A: We can divide the process into 3 stages for importing cosmetics through general trade.
1)The first stage is to Authorize a Chinese responsible person(company) and fulfill the Product compliance
2)Export products to China
3)Sell products in China
Q: What kind of cosmetics will be called overseas cosmetics?
A: According to Cosmetics Registration and Filing Administration Measures, If the last step of the manufacturing process, which always means the filling step, we mean, this step involves contacting the cosmetic contents right. If the filling step is completed in overseas, then it shall be managed as the imported product. For example, a lotion product is manufactured in France and exported to China as semi-finished products or raw material packed in big containers, then it is filled into bottles and packaging in China, then it is a domestic cosmetic in China.
Q: When it comes to declaration at China customs, how are cosmetics classified? (How to distinguish between ordinary and special)
A:Cosmetics can be classified into two kinds–either special or general. Special cosmetics require pre-market registration and general cosmetics require pre-market filing. If your product claims to help with Spot Removal, Whitening, Sun Screening, Hair Dyes, Hair Perms, Anti-hair Loss Or claims a new efficacy, then it is a special cosmetic. Everything else is a general cosmetic.
Q: What tests are required for the import of overseas cosmetics into China? How long does it take for these tests to be carried out?
A: During Cosmetic Filing and registration period, Physical and chemical (Heavy metal,etc.) testing items, Microbial testing items, Toxicology testing, Hazardous substance testing, Efficacy evaluation testing are required. For a general cosmetic, it takes about 30-60 days. For a Special cosmetic, it takes about 3-6months.
Q: What changes have occurred in the current animal testing regulations in China? What impact do these have on imported cosmetics?
A:It is finally possible to enter the Chinese market without having to conduct animal testing. However there are certain conditions that you must meet. First, it only applies to general cosmetics. Second, your QMS certificate must be issued by a local authority. Third, Your product must not be intended for infants or children. Fourth, Your product must not use new ingredients that are still in their safety monitoring period. And last, the filing person, the Chinese responsible person and the manufacturer must not have any bad records in China.
Q: What is the most problematic part of the procedure that many beauty brands encountered with when entering the Chinese market? What are the countermeasures?
A:For those brands looking to sell in China, they need to be aware that regulations on imported cosmetics are now stricter than ever before. First, the brand trademark shall be registered in China. Second, cosmetic ingredients shall meet the requirements of IECIC(Inventory of Existing Cosmetic Ingredients in China) 2021 and other regulations. Third, the cosmetic claims shall fall in the cosmetic definition in CSAR.
Q: 2021 is the year of the new regulations introduction, a series of policies and standards were out. This year, the regulations have been implemented, companies have reformed to cope with the new regulations. How do you think beauty brands should face the policy changes in China?
A: These new regulations upgrade all-round on supervision and administration, which serves the cosmetic industry and consumers better. It is worth noting that several changes are very critical for oversea brands. First, the Cosmetic classification has changed, as we explained a moment ago. Second, new cosmetic ingredient application is much more easier and quicker through online portal. Third, the cosmetic Claims require claim substantiation.
That is to say, you need solid evidence to support your claims. Fourth, safety assessors and assessment reports are required. Fifth, enterprise obligations are specified for filing and registration person. Those are just changes in a nutshell. The actual application is way much more complicated. If you can find a cosmetic compliance partner like ZMUni in China, it can facilitate your access to the Chinese market by complying with all the national and local regulations.
Q: Is it a good time for beauty brands to enter China now?
A: Yes, i’m sure it is. Because we’ve seen positive signs from many perspective. For example, our people are affluent than before and they have spend more money on the pursuit of daily beauty in China in recent years.
And the market atmosphere is very promising, we have seen great development of new marketing social media platform, like douyin, the chinese version of tiktok, and xiaohongshu, etc. Beside, offline selling channels are also expanding. Most evidently, So many successful cases of Overseas brands have entered the Chinese market, which could be a good model for others.
Q: What make a brand suitable for the China’s Market?
A: First, I think if there are competitors locally, and the competitors has shown a rising trend, then the brand basically can be assured that the consumer demand is validated. Then, as an oversea brand, you has to own your unique selling point, specially the novelty, which is definitely a craze among Chinese consumers. and whether your brand can provide an exact situation why Chinese consumers need the product. Only you have specific brand position and localized purchase decision scenarios, consumers can recognize your values.