In the first-half of 2021, the cosmetic sector's total retail sales were 191.7 billion yuan, a YoY increase of 26.6%. The figure in 2020 was 147.7 billion yuan, dropping by 0.2% YoY. 

As for online sales, the cosmetic sector had a great performance in March and June because of two major marketing festivals, Women's Day and the 618 shopping festival. In the rest months, the growth rate of online GMV kept steady.

Brands showed different performances in 2021H1. 

Among domestic brands, Florasis ranked the first for six consecutive months. Its GMV even exceeded L'Oreal and Lancome, the top2 international brands' GMV in April,. Perfect Diary still performed well, whose monthly GMV still maintained at over 200 million yuan, but its growth rate dropped. Another domestic brand, Winona, has become the top 1 domestic skincare brand. In 2021Q2, its online GMV was 510 million yuan, with a growth rate of 33.4%. Winona’s GMV ranked the 10th in the skincare sector, accounting for 1.8% of the entire skincare product sales. Other domestic functional skincare brands, such as BIOHYALUX, Dr. Yu, QUADHA, are all worthy of attention.

As for international brands, L’Oreal, Estee Lauder, and Lancome still dominated the market. Although being exceeded by Florasis in April, their online GMV rebounded quickly in June by taking advantage of the 618 shopping festival.

In conclusion, the Chinese cosmetic market has recovered from the pandemic. Big international cosmetic brands still dominated the market, while emerging domestic brands are catching up.

Yes, definitely.

The first must be the rise of functional skincare products. Functional skincare, also known as active skincare, refers to pharmacological skincare products that target skin problem and have a therapeutic effect, which contains pharmaceutical ingredients. 

In 2020, due to skin problems caused by wearing masks during the epidemic, many survey reports found that consumers pay more attention to health and safety when buying skincare products. They trust dermatologists and authoritative experts more. This change directly contributed to the rise of many functional skincare brands. For example, Winona now becomes the top1 domestic skincare brand. And four functional skincare brands QUADHA, BIOHYALUX, MEDREPAIR, Biomeso  from Bloomage Biotech, the hyaluronic acid giant in China, also performed well in Q2The second is the quick expansion of e-commerce. After the pandemic, e-commerce's market share rose from 30% to 40%, playing a more important role in the market.

In general trades, China implemented the overarching regulation - Cosmetic Supervision and Administration Regulation (CSAR) on Jan 1, 2021 and the new cosmetic registration and notification system on May 1, 2021. FromMay 1, cosmetic companies need to complete product registration or notification based on the new regulations. Also, Cosmetic registrants and notifiers are required to conduct safety assessment and efficacy evaluation for 20 kinds of efficacy claims. For more detailed requirements and compliance advice, I think ChemLinked cosmetic portal covered a lot of resources.

As for the CBEC channel, Tmall Global, the biggest CBEC platform in China, regulates that CBEC imported cosmetics released on the platform shall comply with the requirements of prohibited and restricted ingredients under the Safety and Technical Standards for Cosmetics 2015, which is required for cosmetics of general trade. If Tmall Global finds or detects the illegal addition of those ingredients in the products, it will punish the merchants depending on the seriousness of the circumstances.

Yes. I would like to talk about popular categories first. The skincare and makeup sectors still account for most market share. However, personal care products and fragrances are gaining more attention this year, especially niche fragrances, including fragrance shower gel and anti-hair-loss shampoo. Some subcategories, such as smearing masks, are also worthy of attention.

As for marketing, brand self-run live-stream is definitely a good choice, which it's now actively promoted by Douyin and Taobao Live-stream. I can unveil some data here. Last year, only 15% of Taobao live-stream’s GMV was from KOL live-stream, nearly 85% was from brands’ own live-stream. We all know top live-streamers such as viya and Austin Li were amazing. In fact, all of them (including other live streamers) only accounted for 15%.

Douyin and Kuaishou, two main short video platforms in China, are actively developing their e-commerce business, so they can be good choices for brands. Some big domestic cosmetic brands already joined the party, such as L’Oreal, Winona, and Perfect Diary. They have already opened their official stores on these platforms.

It is undoubtedly that female consumers are still the main consumption group in the market. There are some other groups worthy of attention. I would like to take some examples here.

First I want to talk about the skintellectuals. This group of consumers likes to research cosmetics ingredients, and they make buying decisions based on their own knowledge about cosmetics. This group can be one factor contributing to the rise of functional skincare.

China has tens of millions of skintellectual. The annual growth rate of this group's beauty consumption is 100%, far higher than the average group. Most of them are female consumers under 30, with high education background and living in high-tier cities. The consumption power is high.

They have these characteristics when buying cosmetics:

• Paying attention to efficacy when buying cosmetics, especially anti-allergic and sun protection.

• Preference for plant ingredients and niche specialty ingredients.

• Preference for cosmeceutical brands, focusing on products’ ingredients and scientific background.

Another group I would like to discuss is students. The annual growth rate of this group's beauty consumption is over 40%. Most of them are teenagers living in lower-tier cities, and 45% are generation Z.

Here are their consumption characteristics: Although with limited consuming power, they love fashion, so they prefer cost-effective, fast fashion products. They like to share information online and are easy to be affected by others'  recommendations. Besides the big promotion seasons, they are also active in the summer vacations and back-to-school seasons.

Students' preference for domestic products increased significantly in 2020. They are one important factor fueling domestic brands' quick rise.