Contents

• Market Condition

• Company Dynamics

• E-commerce & Social Commerce
  

• Finanical Results

• Regulatory Compliance
  

Market Condition

1. According to the National Medical Products Administration (NMPA)’s data query platform, there were 24 new cosmetic ingredients notified in H1 2023, of which 16 were notified by Chinese local enterprises, accounting for 67%. In terms of ingredient types, 15 new ingredients notified by Chinese domestic enterprises were active ingredients.

2. China’s cosmetic sector witnessed 35 investment and financing events in the first half of 2023, with a total amount exceeding CNY 1 billion. The events were mainly concentrated in four areas: synthetic biology, cosmetic medicine, live streaming service and offline retail.

3. With the increasing awareness and demand for sun protection among consumers, the overall market size of sunscreen is growing annually. According to O&O Consulting, the online retail sales of sunscreen products from January to June 2023 reached CNY 9.752 billion, with a year-on-year increase of 18.6%. The retail volume exceeded 122 million units, with an average transaction price of CNY 80.2. Mistine was the best-selling online sunscreen brand in the first half of the year, ranking first in both value and volume. In the recent two years, the brand is favoured by young consumers with its continuously improving R&D capabilities, comprehensive online and offline collaborative marketing strategies, etc.

Company Dynamics

1. Estée Lauder unveiled the Chinese name “色提因” for Sirtuins (SIRTs) in the 25th World Congress of Dermatology. After that, it held a SIRTs theme activity in the group’s Chinese innovative R&D center to accelerate its application in China. Having the title of “longevity protein”, SIRTs play a vital role in extending the cells’ life due to their involvement in the regulation of gene expression, energy metabolism, DNA repair, etc. Estée Lauder has studied SIRTs for 15 years and applied the research results to its high-end product series—Re-Nutriv. 

Forum Venue of SIRTs in Estée Lauder’s Chinese Innovative R&D Center

2. Jinbo Biopharmaceutical made its debut on the Beijing Stock Exchange (BSE) on July 20th, 2023, becoming the first collagen company to go public on the BSE and the second recombinant collagen enterprise in China to achieve a successful listing, following Giant Biogene's listing on the Hong Kong Stock Exchange. Founded in 2008, Jinbo Biopharmaceutical earns its revenue mainly from recombinant collagen products and anti-HPV biological protein products. The company aims to raise CNY 232 million for the R&D of injection products and the new materials of recombinant humanised collagen.

3. Yatsen Global and Ruijin Hospital have recently collaborated to establish a dermo-cosmetics laboratory in Shanghai. The laboratory aims to develop skincare products that can address various skin issues observed in clinical practice, and promote the research and development of cosmeceuticals, with a focus on scalp moisturisation and health, as well as skincare products designed for the skin problems frequently happen in China's western regions.

4. Grown Alchemist, a Melbourne-based skincare brand acquired by L’OCCITANE, officially entered the Chinese market in July. Established in 2008, the brand focuses on forging effective skincare products with the use of natural active ingredients. Unlike added with a series of high concentration ingredients for external use to address skin problems, Grown Alchemist adopts an internal-to-external conditioning method, aiming to enhance skin functions by improving skin cells. Currently, instead of opening overseas flagship store, the brand has partnered with Sephora stores in China to introduce a range of products, including balms, hand creams, and cleansers, with prices ranging from CNY 120 to 780. 

5. The Laundress, a high-end laundry detergent and cleaning product brand under Unilever, unveiled the brand’s Asian R&D centre in Tianjin, China and launched the brand’s first batch of domestically-manufactured upgraded products, including delicate wash, wool & cashmere shampoo, whites detergent, signature detergent, intimates wash, and fabric conditioner. The scent of these upgraded products are blended under cooperation with Symrise, which do not contain fragrances that are irritating to the skin or with poor biodegradability, making it suitable for sensitive population such as infants. 

E-commerce & Social Commerce

1. The cosmetic sector of Kuaishou e-commerce rolled out a “traceability program”, which planned to invite Kuaishou’s top influencers to team up with over 30 domestic and international brands. The influencers will head for the factories of these brands and conduct more than 40 traceability-based live-streaming. Through this program, brands can directly show the manufacturing processes of products to consumers and enhance their thrust of the brands. Additionally, the products can be promoted to wider target groups by the leverage and follower base of the influencers.

2. According to Feigua statistics, L’Oréal Paris recorded CNY 1 billion GMV during H1 2023, becoming the top-selling cosmetics brand on Douyin. International and Chinese domestic brands took up equal seats among the top 10 hot-selling brands on the Douyin e-commerce platform. Additionally, cosmetic device is one of the popular categories on the platform, with 4 brands, Jmoon, Amiro, Yaman and NOWMI, in the top 20 hot-selling brand list.

Financial Results

Regulatory Compliance

1. On July 20, 2023, Shanghai Municipal Medical Products Administration released the Provisions for Management of On-site Personalized Cosmetic Services in Pudong New Area of Shanghai (Trial) (the Trial Provisions) to further standardize the personalized services. The Trial Provisions will take effect from August 20, 2023, and be in effect for two years until August 19, 2025. More detailed information on ChemLinked.

2. In July 2023, China National Medical Products Administration and National Institutes for Food and Drug Control released four cosmetic testing methods, including a new supplementary testing method and three draft testing methods for cosmetic ingredients. More detailed information on ChemLinked.