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“Refund for Ineffective Freckle Removal”: One Chinese Cosmetic Company Operates Abnormally

On the occasion of Consumer Rights Day on March 15th, a news story regarding rights protection for freckle-removal products has gained widespread attention.

Recently, Guizhou Radio and Television Channel 2 released a post through their official Weibo account “Citizens’ Concerns”. It reported that Ms. Wang, the operator of a cosmetics store in Guiyang, Guizhou, purchased freckle-removal products from a certain company, but the products proved to be ineffective in removing freckles. As a result, many consumers demanded refunds from Ms. Wang.

According to the report, the company selling the freckle-removal products had promised Ms. Wang a “100% ineffective refund”. However, Ms. Wang is currently unable to contact the company, and it is operating under abnormal conditions. So, what exactly is going on here?

The company involved has been listed in the abnormal business operation records

Looking back at the events, according to the “Citizens’ Concerns” report, in June of last year, Ms. Wang entered into a partnership with Guizhou Jinxinhengmei Cosmetics Company (referred to as “Jinxinhengmei”), registered in Huaguoyuan, Nanming District, Guiyang City. At that time, the legal representative of Jinxinhengmei, Mr. Wang, introduced to Ms. Wang, “After using a set of Beilaisijia products, approximately fifty percent of any freckles can be removed. If the desired effect is not achieved, a full refund will be issued.”

However, many consumers who purchased Beilaisijia products from Ms. Wang did not see any results after using them for some time and thus requested refunds from Ms. Wang. Consequently, Ms. Wang requested Mr. Wang to fulfill his promise. However, Mr. Wang stated, “I can only exchange another brand of freckle-removal products for consumers.” However, consumers were not satisfied with this solution and demanded full refunds. Subsequently, Ms. Wang made multiple attempts to call and communicate with Mr. Wang but received no response.

Following this, staff from the “Citizens’ Concerns” program and Ms. Wang went to the registered location and business premises of Jinxinhengmei to understand the situation. However, there was no response after knocking on the door, and Mr. Wang’s phone was unreachable. According to Ms. Wang, “A total of 20,000 yuan was spent on purchasing goods from Jinxinhengmei.”

According to the National Enterprise Credit Information Publicity System, Jinxinhengmei was established in June 2022 with a registered capital of 200,000 yuan. Its legal representative is Mr. Wang, and its business scope includes retail and wholesale of cosmetics, as well as the sale of sanitary and disposable medical supplies. According to the investigation by CHAILEEDO, due to “unable to contact through the registered address or business premises”, on March 1, 2024, Jinxinhengmei was listed in the abnormal business operation records by the Market Supervision and Administration Bureau of Nanming District, Guiyang City.

According to the “Citizens’ Concerns” report, the brand involved in this incident is called Beilaisijia, and its related products are produced by a cosmetics company in Dongguan, Guangdong.

CHAILEEDO searched for “Beilaisijia” through a cosmetics regulation app, showing a total of 24 records of regular cosmetics information, involving categories such as essence cream, beauty cream, and face masks. The OEM enterprises behind them include Guangdong Oumou Biochemical Technology Co., Ltd. (referred to as “Oumou Biochemical”), Guangdong Saimou Cosmetics Co., Ltd. (referred to as “Saimou Company”), and Guangdong Rongmou Medical Technology Co., Ltd. (referred to as “Rongmou Medical”). Among them, only Rongmou Medical’s company registration address is located in Zhongtang Town, Dongguan, Guangdong.

Furthermore, CHAILEEDO searched for “Beilaisijia” through the domestic special cosmetics registration platform, which showed “no data available.” Further investigation by CHAILEEDO revealed that among the three OEM enterprises mentioned earlier, Rongmou Medical had no records of registered special cosmetics. Oumou Biochemical registered one special cosmetic product named “Ruhua Whitening Freckle Cream”, while Saimou Company registered two special cosmetic products, including a plant-based isolation sunscreen spray and a plant-based whitening freckle cream. Therefore, it appears that the products associated with the Beilaisijia brand may be regular cosmetics.

Of note, according to public information from the China Trademark Office, the trademark status of Beilaisijia in the category 3 daily chemical products is “registered”, with the applicant being Mr. Chen and the application date being April 23, 2020.

All three OEM enterprises have been subject to administrative penalties

As is well known, freckle-removal and whitening cosmetics are considered special cosmetics in China and are subject to registration management by the National Medical Products Administration (NMPA) before production or importation is allowed.

Additionally, due to the relatively high risk associated with freckle removal and whitening efficacy ingredients, particularly during the early stages of research and development, cosmetic registrants are required to conduct a series of research and evaluation work around these ingredients to ensure their safety and effectiveness. Therefore, on August 1, 2022, the China Institute for Food and Drug Control issued a public solicitation for comments on the Technical Guidelines for Special Cosmetics with Freckle-removing and Whitening Efficacy (Draft for Comments), which outlines specific technical requirements for product information, product names, product formulations, and ingredient use for freckle-removal and whitening special cosmetics.

Furthermore, in March of last year, the China Institute for Food and Drug Control also solicited public opinions on the Technical Guidelines for Research on Efficacy Ingredients of Freckle-Removal and Whitening Cosmetics (Draft for Comments), aiming to further regulate and guide research and evaluation work on freckle-removal and whitening cosmetics.

“Diluting and whitening products fall within the scope of national special cosmetics management. If certain brands promote the efficacy of special cosmetics as regular cosmetics, it is illegal,” noted Wu, founder of a cutting-edge brand. “The related products of Beilaisijia do not have freckle-removal effects, which constitutes deception of consumers. Therefore, on one hand, businesses will face strict administrative penalties, and on the other hand, they will have to deal with consumers’ requests for refunds and returns of ineffective products.”

The head of an OEM company in Guangdong bluntly stated, “The occurrence of such violations may be due to misleading sales by cosmetic manufacturers, or misleading during the terminal consumption process. The responsible party for illegal advertising should be determined through the specific product labels. Of course, the responsible party for the violation must be identified, and they must also bear corresponding responsibilities.”

It is worth mentioning that the aforementioned three OEM companies have all been subject to administrative penalties. According to public administrative penalty information, on December 18, 2021, Mr. Wu, the owner of the “Age Reversal” trademark, commissioned Oumou Biochemical to produce related products such as “Age Reversal Acne Essence Cream” and “Age Reversal Acne Essence Liquid”. However, because acne products require payment for efficacy evaluation before being registered and marketed, Mr. Wu canceled the production of acne products. However, he eventually sold samples of acne products to beauty salons, resulting in a fine of 10,000 yuan imposed by the regulatory authorities.

Additionally, the aforementioned Guangdong Saimou Company, without obtaining a production license for eye care cosmetics, produced products such as “Laijian Red Leaf SHUAIANREDLEAF Moisturizing Eye Gel” and “Laijian Red Leaf SHUAIANREDLEAF Plant Extract Soothing Eye Cream”, resulting in a fine of 50,000 yuan imposed by the Baiyun District Market Supervision Bureau in Guangzhou.

The demand for whitening and freckle-removing products in the market is robust

The issue of false advertising in the whitening and freckle-removal product market has always been a chronic problem in the industry, with both domestic and international brands having been reported or penalized for improper claims of whitening and freckle-removal effects.

For example, in November 2023, the State Administration for Market Regulation’s official media, “China Consumer News,” called out a whitening and freckle-removing essence for its “multi-purpose” claims; In August 2019, an international brand advertised its “Gold Ultimate Youthful Radiance Essence 30ml” claiming to “fade dark spots” on the product promotion page, but the product was a domestic non-special purpose cosmetic, constituting false advertising.

Regarding the frequent occurrence of false advertising in the whitening and freckle-removal market, a senior industry expert in cosmetics pointed out, “The demand for whitening and freckle-removal products is strong, as many consumers hope to quickly and effectively address various spot issues. However, the causes of spots are complex and varied, requiring high standards of safety and effectiveness for related products.”

“Furthermore, whitening and freckle-removal products are subject to special certification management by the state, with long approval times, high costs, and explicit requirements for the actual clinical efficacy and safety of products. In this context, many unscrupulous businesses take risks to make quick and illicit profits by promoting and selling ordinary products as certified ones,” the senior cosmetics industry expert added.

It is worth mentioning that according to CHAILEEDO Intelligence data, the domestic whitening and freckle-removal market has maintained rapid growth over the past five years, with the market size estimated to reach 69.479 billion yuan in 2023, a year-on-year increase of 9.6%. Looking at the registration numbers of special whitening and freckle-removal cosmetics this year, there were 104 and 65 registrations in January and February respectively, representing year-on-year growth of 333.33% and -25.29%.