China's cosmetics market, which has become the world's second-largest cosmetics consumer market, continues to maintain a high growth trend. Despite the high retail price, international cosmetic brands and products are still leading the Chinese cosmetic market. Under the impact of the epidemic in 2020, the sales of cosmetics on cross-border e-commerce platforms and Hainan duty-free stores has increased significantly.

On the other hand, China' cosmetics import and export trade has always been in deficit - the imports are far more than exports. The “Made in China” brand is famous worldwide, but there is rarely a trace of “Made in China” when it comes to global cosmetics consumption.

If we look into the reasons behind the gaps between domestic and international cosmetic enterprises, patents - a reflection of the innovation ability of a company, must be a force to be reckoned with.

Cosmetic patent applications

From 2001 to 2020, there were 215,800 patents related to cosmetics in China, accounting for 25.39% of the global total. The proportion of Chinese cosmetics patent applications in the international cosmetics patent applications is also on the rise year by year. In 2001, it was 4.34%, but by 2019, it's up to 61.64%.

China is the first target country for the application of cosmetics invention and utility patent, accounting for 22.14% of the global total, followed by Japan, USA and Korea. It reflects the increasing demands of cosmetic consumption in China.

International enterprises are the primary applicants for cosmetics invention and utility patent globally. In terms of the number of patents, among the top 15 companies in the world, there are 5 European companies, 5 Japanese companies, 3 American companies and 2 South Korean companies. In comparison, local enterprises lag far behind. L 'Oreal - the top 1 global enterprise who filed 242 times as many patents as the leading one Chinese cosmetics company Jahwa.

Top 5 applicants of cosmetic patents global: international vs domestic

 From 2001 to 2020, cosmetics companies applied for 4,593 related patents in China, among which 2,636 were valid, accounting for 57.39%. 85.76% of the applied patents are invention patent, 8.73% are for design and 5.51% are for utility. International enterprises lead the applicants for cosmetics invention and utility patent in China as well. Among the top 20 applicants of cosmetic patents in China, 13 are multi-national firms.

Top 20 applicants of the cosmetic patent in China, designed by ChemLinked

Chinese companies focus more on design patent, while International companies focus on ingredients and processing.

 Plagiarism on design or packaging is quite common in China. On October 17, China passed the latest revised Patent Law, which will be implemented on June 1, 2021. The new patent law aims to solve the plagiarism problem by raising violation fines. It also gives specific protection for partial design patents and extends the protection term of the design patent for 15 years.

Prospects on cosmetic innovation in China

In the past, most of the popular cosmetics brands in China came from the United States, South Korea, and other countries. But since 2018, there is a strong momentum of Chinese brands. Domestic beauty brands such as Perfect Diary, UNNY, and Judydoll have experienced explosive growth. Local cosmetic enterprises are also putting more efforts into product innovation. For example, in the beginning of 2020, PROYA rolled out its new skincare product Ruby Essence, containing ingredients like hexapeptide, supramolecular vitamin A alcohol, red algae extract. This product priced at 299 yuan and has achieved over 60,000 monthly sales on its Tmall store by November 5, 2020.

Proya's Ruby Essence Product on Tmall, by Online

As the consumer market continues to expand, more international enterprises are setting up R&D centers in China, which will also push the whole industry to develop forwarding to an innovation focus.  

In addition, the implementation of China’s new Cosmetic Supervision and Administration Regulation (CSAR) will be a significant milestone for China to modernize Chinese cosmetic supervision. "The new regulations simplify and improve the classification management system of cosmetics based on the principle of risk management. Under the premise of emphasizing product quality and safety, enterprises are encouraged to carry out research and development innovation, especially the innovation of raw materials",said by professor Yang Cheng, director of the Cosmetics Research Center of Jiangnan University.

The nation is also increasing its promotional plans to encourage frontier research of cosmetics like funding natural science projects, establishing a collaborative innovation model among enterprises, universities and research institutes and cultivating more talent in the cosmetic industry.