The Shiseido Group, which has sold a bunch of popular brands and exited the highly competitive affordable skincare market and is focusing on the high-end market, will also step up its efforts in the clean beauty segment again in the spring of 2022. It has launched a new brand, Udé, which has been incubating for two and a half years.
The Shiseido Group is once again stepping up its efforts in the clean beauty. It announced that it would launch Udé this spring, a new brand that has been in incubation for two and a half years. All of its products are made with plant-based ingredients. It is said that Udé will join Shiseido’s in the array of clean and sustainable cosmetics including Drunk Elephant and BAUM.
The Shiseido Group is not the only one who has its eyes on this potential market, the international beauty conglomerates with a keen sense have already increased their extend through acquisition, investment, independent incubation and other ways. “Clean Beauty” is becoming one of the most popular trends in the world.
In 2015, Unilever announced the acquisition of British clean skincare REN to strengthen its high-end personal care line. In the year before the acquisition, REN’s annual sales had reached $44.104 million. Four years later, Unilever again spent over $534 million to acquire Tatcha, a high-end skincare brand focusing on natural ingredients. The brand has already entered the Chinese market in 2020.
Shiseido Group, which has been busy selling its brands in the last two years, made a move to acquire Drunk Elephant, an American online skin care brand, in 2019. P&G likewise acquired Farmacy, an American clean beauty brand, in 2021. Farmacy reportedly had its net sales of nearly $80 million by the end of 2021, while the Shiseido Group mentioned in its 2021 earnings report that the Drunk Elephant recorded an 11% sales growth that year.
In China, several clean beauty brands such as LAN, Dewy Lab and YOKIA have emerged. Among them, LAN created in 2016 is regarded as one of the first proponents of Clean Beauty in China by the Chinese cosmetic industry, which has quickly opened up the market with the concept of “nourishing skin with oil”.
After nearly 5 years of development, LAN has entered the top 10 of the Tmall Double 11(Chinese Shopping Carnival) makeup remover category on the mainstream e-commerce platform in 2020 with a 70 times increase in sales year-on-year. As seen in the official flagship store of LAN on Tmall, its top-selling “LAN Essence Oil” is currently sold 40,000+ unites per month. The single product is only available for purchase by store members.
According to public reports, in 2020 and 2021, LAN completed two consecutive rounds of financing totaling about $31 million within six months.
On February 22nd this year, Dewy Lab, a Chinese clean beauty brand, received a $10 million Pre-A round of financing led by China Growth Capital and followed by Xiao Hong Shu. The product has completed three rounds of financing within one year since its launch in January last year. Dewy Lab was gradually moving from primer to full color cosmetics and basic skin care categories focusing on “clean ingredients and “superior makeup”. This is also the first cosmetic brand invested by the Chinese promotional social platform Xiao Hong Shu.
It is important to note that while brands around the world are jumping into the clean beauty market, there are problems in this market that cannot be ignored.
“Whether in China or other countries, clean beauty has not yet established a unified standard.” Numerous Chinese cosmetic industry sources said, “Since there is no clear official definition yet, clean beauty is currently usually defined by concepts such as green, organic, zero cruelty and sustainable. So brands are establishing their own standards, and the standards are mainly reflected in the ingredients.”
In 2018, high-end retail brand Sephora’s Clean at Sephora’s requirement for “Clean” was to ban 13 specific ingredients from appearing in these brands’ products. As of 2019, it has increased the number of banned ingredients to 50 including butylated hydroxyanisole, carbon black, mercury, aluminum salts, lead, and toluene.
Drunk Elephant, a Shiseido Group company, on the other hand, believes that cosmetics contain six ingredients that can cause skin problems, namely aromatic essential oils, silicones, chemical sunscreens, surfactants, alcohol and fragrances/colors, so the entire line of Drunk Elephant products does not contain these six ingredients.
Other clean beauty brands in China have also established their own ingredient systems, such as onTop, Simply This, and YOKIA, all of which have their own ingredient “blacklists” that emphasize “no controversial ingredients”.
In August 2021, Alibaba’s Chinese cross-border e-commerce platform Tmall Global Beauty, together with COSMOHits, the authoritative beauty media, defined clean beauty for the first time in China, with four main aspects: “no harmful ingredients, no harm to the environment, no cruelty to animals, and no waste to sustainable environment”. But from the current situation, this definition is not widely used by Chinese clean beauty brands.
From the statistics from Beauty Insight Intelligence of Chinese vertical beauty meida Beauty InSight, clean beauty is on the rise. The global clean beauty market size is $6.01 billion in 2021 and is expected to reach $11.56 billion by 2027. Clean beauty may exceed 100 billion market in the next decade.
Data from NPD, a leading U.S. market research firm, shows that sales of cosmetics fell 14% during the outbreak of the pandemic, but sales of clean beauty products rose 11% against the trend.
This is because the outbreak of the pandemic prompted people to raise health awareness, pay more attention to the composition and safety of cosmetics. Clean beauty take into account the safe and harmless ingredients and scientifically proven formulas, which is in line with the current dual needs of consumers for cosmetics and skin care both safety and efficacy.
Therefore, the fact that”clean beauty is the future direction of development and inevitable trend” has become the consensus of the Chinese cosmetics industry.
However, it is understood that in 2021, “clean beauty” in the global beauty market penetration rate of more than 20%. But China’s clean beauty market only began to sprout in 2020, and is still in the early stages of development.
In recent years, performance that China’s emergence in clean beauty market showed that there is no “dark horse”. On China’s mainstream e-commerce platform Tmall, the only Chinese head clean beauty brands with monthly sales of more than 10,000 are MCL, LAN and Dewy Lab, while other brands don’t have outstanding performance.
This means that there is still a lot of room for incremental growth in the Chinese clean beauty market. There is still a long way to go before clean beauty can develop in China.