China's Registration of New Cosmetic Ingredients Accelerated Significantly in the First Half of 2023
- Chaileedo Press
- Jul 17, 2023
- 8 min read
As the world's second-largest cosmetics market, China has seen significant developments in cosmetics ingredients this year. In the first half of this year alone, 24 cosmetic ingredients in China were registered, which will further enhance the country's competitiveness in the cosmetics market.
Cited: SOPHIM IBERIA S.L
Since the opening of new cosmetics ingredient registration in 2021, the threshold for ingredients research and development has been lowered, and the field of ingredients innovation, which was previously dominated by international beauty giants, has begun to see more companies entering the market.
China completed 24 ingredients registrations in the first half of this year
In January, three companies completed new ingredient registrations. Dong-E-E-Jiao Co., Ltd completed the donkey oil registration, Corum Inc completed the new ingredient registration of azelamidopropyl dimethyl amine, and Fuzhou Biotech Biotechnology Co., Ltd. completed the new ingredient registration of potassium dihydroavenous alkaloid D.
According to the information released by the National Medical Products Administration, donkey oil is an animal ingredient, with the registration number of National Cosmetic Original Registration Number 20230001, the purpose of the ingredient use is moisturizer, applicable to various types of skin cosmetics. In terms of safe usage, the trunk area is 8%, face products are 41%, hand products are 30%, and there is no usage limit for lip products.
Azelamidopropyl dimethyl amine is a chemical ingredient, with registration number National Cosmetic Original Registration Number 20230002, the purpose of the ingredient used is a skin protectant, which can be used in various types of skin cosmetics, with a safe usage of 2%.
The registration number for potassium dihydroavenous alkaloid D is National Cosmetic Original Registration Number 20230003. The specific technical requirements have not been released yet.
From February to April, a total of 9 new cosmetics ingredients completed the registrations. These are Hydrolyzed α-glucan polysaccharide, β-Nicotinamide Mononucleotide, hydrogenated farnesene, asivatrep, caffeoyl hexapeptide-9, acetyl hexapeptide-95 amide, mu-conotoxin CnIIIC, CARBOXYDECYL TRISILOXANE, alpha-glucan polysaccharide.
In May, the first half of 2023 saw a burst of new ingredient registrations, with nine companies completing registrations. Baiyuete Biotechnology (Shanghai) Co., Ltd. and Shenzhen Readline simultaneously filed for the MESEMBRYANTHEMUM CRYSTALLINUM CALLUS EXTRACT and ACETYL CARNOSINE on May 16.
While in June, three cosmetic ingredients completed the registrations, including Ethyl Methicone, Cyclopeptide-161, and Tripeptide-105.
Table of the new cosmetic ingredients registration information in China for the first half of 2023
Overall, a total of 24 ingredients completed their registrations in the first half of this year.
In addition to ingredient registrations, Jinan, Shandong, China announced that it will build the world's largest hyaluronic acid raw material production base. The annual sales of hyaluronic acid exceed 300 tons, accounting for more than 40% of the global market share and more than 70% of the national market share.
According to Wei Bin, Deputy Secretary of the Party Group of Jinan Municipal Bureau of Industry and Information Technology and Deputy Director, in 2022, the sales revenue of Jinan's hyaluronic acid industry exceeded RMB 8 billion ($1.13 billion). Cosmetics and health products based on hyaluronic acid have become well-known and influential brands in Jinan.
After the full completion of the World Hyaluronic Acid Valley project, it is expected to introduce more than 500 upstream and downstream enterprises of the medical beauty anti-aging industry chain centered on hyaluronic acid. The industry scale is expected to exceed RMB 50 billion, with an annual tax income exceeding RMB 5 billion ($705.69 million), creating no less than 20,000 jobs, and forming an international medical beauty anti-aging cluster integrating production, life, and ecology.
The EU restricts the use of ingredients such as retinol and alpha-arbutin
Apart from the Chinese cosmetic ingredients market, the European Union recently announced its plan to revise the European Cosmetics Regulation (EC) 1223/2009, proposing restrictions and prohibitions on the use of several popular cosmetic ingredients, which has caused great concern within the industry.
According to the revisions, the EU plans to ban the sunscreen agent 4-Methylbenzylidene camphor (4-MBC), and list dye wood ketone, soybean glycoside, kojic acid, retinol, retinyl acetate, retinyl palmitate, α-arbutin, and arbutin as restricted ingredients in cosmetics. In addition, the usage requirements for triclocarban and triclosan have been revised.
Retinol and its derivatives are popular ingredients widely used in anti-aging products. However, retinol has a substantial irritant effect and can lead to skin intolerance when used in high concentrations or on sensitive skin. The EU's Scientific Committee on Consumer Safety (SCCS) has conducted several safety assessments on retinol and its derivatives and limited its use after this regulation revision.
In October of last year, the SCCS published a safety assessment opinion on Vitamin A (retinol, retinyl acetate, retinyl palmitate). According to this opinion, body lotions with a concentration equivalent to 0.05% retinol, or other types of cosmetics with a concentration equivalent to 0.3% retinol, are safe to use. The SCCS pointed out that when the concentration of Vitamin A in cosmetics exceeds certain levels, it may pose potential risks to human health. Therefore, the SCCS recommended setting maximum usage concentrations for retinol, retinyl acetate, and retinyl palmitate, and reminded consumers to pay attention to the exposure of Vitamin A in cosmetics, avoiding exceeding the daily maximum intake.
The revised regulation also includes the popular whitening ingredient arbutin in the list of restricted ingredients. Arbutin is a whitening agent that can inhibit tyrosinase activity, preventing the formation of melanin, and has whitening and depigmentation effects. In February this year, the SCCS published the final opinion on the safety of α-arbutin and arbutin in cosmetics, considering α-arbutin and arbutin as safe for use. The SCCS proposed the maximum usage concentrations for arbutin, suggesting a maximum safe usage concentration of 2% in face creams and 0.5% in body lotions, while the maximum safe concentration for arbutin in face creams is 7%.
The SCCS stated that the total exposure of α-arbutin and arbutin in products within the above concentration ranges is safe. However, in formulas containing α-arbutin and arbutin, the content of phenol should be as low as possible, and should not exceed the inevitable residual amount in both types of arbutin. Therefore, in this revision, the SCCS included α-arbutin and arbutin in the list of restricted cosmetic ingredients.
With regard to another whitening ingredient, kojic acid, the SCCS also adopted restrictive management measures. Kojic acid has a whitening effect and can remove spots, but it also has certain irritant and allergenic properties. In March of last year, the SCCS published a safety assessment opinion on kojic acid and believed that the maximum usage concentration of this ingredient in cosmetics should be 1%.
Dye wood ketone and soybean glycoside are two antioxidant ingredients, and the SCCS has also proposed corresponding management requirements for them. Dye wood ketone has anti-aging and anti-inflammatory effects, while soybean glycoside has antioxidant and anti-inflammatory effects. In September of last year, the SCCS published the final opinion on dye wood ketone and soybean glycoside. Based on the safety assessment of related data and considering the potential endocrine-disrupting properties of phytoestrogens, the SCCS believes that the maximum usage concentration of dye wood ketone in cosmetics is 0.007%, and the maximum usage concentration for soybean glycoside is 0.02%. According to these safety assessment results, dye wood ketone and soybean glycoside will be restricted.
For the restricted use of triclocarban and triclosan, the SCCS mainly adjusted regulatory requirements. In November of last year, the SCCS conducted a safety assessment of triclocarban and triclosan, verifying the safety issues of these two ingredients, and clarifying their respective target users and maximum usage concentrations. Among them, triclocarban, as a preservative, has a maximum concentration of 0.2% in cosmetics, while the maximum usage concentration for triclosan is 0.3%.
In addition, for the proposed banned ingredient 4-Methylbenzylidene camphor (4-MBC), due to insufficient information provided to comprehensively assess its potential genotoxicity, the SCCS was unable to conclude on the safety of 4-MBC. Therefore, to ensure consumer safety, the EU decided to ban this ingredient in cosmetics.
Finally, it's worth noting that regulatory changes like these can also create opportunities for innovation. As certain ingredients become restricted or banned, there's a need for new, safe, and effective alternatives. This can drive the development of new cosmetic ingredients and formulations, potentially leading to better products for consumers.
DSM-Firmenich: the largest merger in the cosmetic ingredients sector this year
In the capital market of cosmetic ingredients this year, the merger of DSM and Firmenich has attracted the most attention.
In May, the merger between DSM, a health and nutrition company based in the Netherlands, and Firmenich, a fragrance and flavor company based in Switzerland, has been completed, resulting in the creation of DSM-Firmenich. Firmenich, which specializes in perfumes, flavors, and ingredients, is now a wholly-owned subsidiary of DSM-Firmenich. DSM, with a history of over 150 years, has become a leading player in health, nutrition, and biotechnology on a global scale.
The newly created DSM-Firmenich is divided into four high-performing business units: Perfumery & Beauty, Taste, Texture & Health, Health, Nutrition & Care, and Animal Nutrition & Health. These segments are built upon complementary, top-notch scientific research and exceptional manufacturing abilities.
DSM reported sales revenue of €8.39 billion ($9.43 billion) in the fiscal year of 2022, while Firmenich generated CHF 4.723 billion ($5.49 billion) in revenue during the same period. Together, the two companies had annual sales of $14.92 billion, which positions the newly formed DSM-Firmenich as a potential leader in the fragrance and flavor industry and the biggest merger in the cosmetic ingredients sector this year.
The development of the domestic ingredients’ capital market is also thriving.
Zhejiang Peptites Biotech Co., Ltd. (referred to as ZPC), on June 28, submitted its prospectus to the Shenzhen Stock Exchange, intending to become listed on the ChiNext market.
According to the prospectus, ZPC is currently the largest supplier of cosmetic peptide ingredients in China, having partnered with renowned cosmetics firms such as Proya, Bloomage Biotech, and Marubi. In 2022, the company generated a revenue of 213 million yuan ($29.39 million) and a net profit of 70 million yuan ($9.66 million). ZPC is anticipated to become the first publicly listed peptide company in China.
ZPC's peptide products are primarily utilized in the cosmetics ingredients and pharmaceutical industries. In 2021, ZPC held the top position in China's peptide cosmetics ingredients market share. Presently, ZPC has created over 40 beauty peptide products, which include snake venom-like peptides, blue copper peptides, and red scorpion venom. The red scorpion venom is a self-developed revolutionary beauty peptide product and the first domestically produced structural beauty peptide.
Based on financial data, ZPC's revenue for the years 2020, 2021, and 2022 were 86.17 million yuan ($11.89 million), 143 million yuan ($19.73 million), and 215 million yuan ($29.67 million), respectively. Its net profit for the same periods was 12.40 million yuan ($1.71 million), 38.52 million yuan ($5.32 million), and 71.69 million yuan ($9.89 million), respectively. In terms of growth, the company's revenue increased by 50.17% in 2022, and its net profit rose by 86.11% year-on-year.
As per Frost & Sullivan's findings, the Chinese peptide cosmetics ingredients market has increased from 630 million yuan ($86.93 million) in 2016 to 1.45 billion yuan ($200.09 million) in 2021, with a compound annual growth rate of 18.2%. It is predicted to reach 2.32 billion yuan ($320.14 million) by 2025 and 3.24 billion yuan ($447.094 million) by 2030.
At the same time, China's largest pearl pigment supplier, Global New Material International Holdings Limited, is reportedly in talks to acquire the pigment division of German chemical giant Merck. The valuation of Merck's pigment division in this transaction is estimated to be close to €1 billion. If the acquisition is completed, it may become the largest acquisition in the domestic cosmetic ingredients industry and further enhance Global New Material International Holdings Limited's ranking in the international pearl pigment market.
In late June, Brenntag, a global leader in the distribution of chemicals and ingredients, announced the acquisition of Shanghai Saifu Chemical Development Co., Ltd. (referred to as Saifu), which is expected to bolster Brenntag's position in China.
Brenntag has declared that its acquisition of Saifu in China is in line with its acquisition strategy as a major consolidator in the industry and its goal of positioning Brenntag Specialties as the preferred global service partner for innovative and sustainable solutions.
Saifu is a leading distributor of specialty chemicals to various industries, including home and personal care, coatings and inks, polymer emulsions, household, and industrial cleaning, and more. Established in 2005, the company generated an annual revenue of €71 million ($78.02 million) in 2022. The transaction is expected to be completed later this year, subject to standard closing conditions.
Saifu is headquartered in Shanghai, with two subsidiary companies in Guangzhou and Beijing. The company also has a Technical Application Center with two laboratories dedicated to providing technical support. With a team of over 100 employees possessing strong chemistry backgrounds and experience, the Saifu group can deliver quality service.
Since the implementation of regulations related to the registration and registration of new cosmetic ingredients in 2021, 68 new cosmetic ingredients have been registered, with 48 being domestically produced. In the first half of 2023, 24 new ingredients were registered, with 18 being developed by domestic companies. Domestic companies have made significant progress in the research and development of cosmetic ingredients. At the same time, in the capital market, domestic enterprises are continuously expanding their influence in the Chinese cosmetic ingredients market through mergers and acquisitions, and IPOs.
Comments