Chinese Cosmetics Collection Store HARMAY was Fined Involving Major Brands
- Chaileedo Press
- Mar 18, 2022
- 2 min read
Recently, Chinese cosmetic collection store HARMAY affiliated company Shanghai Harmay Lexiang Corporation Development Company Limited was recently fined about $140,000 for producing and operating cosmetics with non-compliant labels. Upon investigation, the batch of cosmetics with non-conforming label were all small samples of major brands, involving Clarins, Decorte, Dior and other brands.
According to the administrative penalty letter issued by the Shanghai Municipal Administration for Market Regulation, Shanghai Municipal Administration for Market Regulation conducted an on-site inspection of the HARMAY cosmetics collection store on April 16, 2021(Beijing Time). The site found that it was selling a total of 4 brands of 24 cosmetics with missing items such as "Clarins Extra-Firming Jour (5ml)" in their Chinese label content. At the same time, the Shanghai Municipal Bureau of Supervision said that it also found that some of the cosmetics sold during the investigation of the above case still had missing items in the Chinese label.
According to statistics, all of the cosmetics with Chinese label violations were small samples of international brands including Tiffany, Burberry, Decorte, Clarins and other 11 brands totaling 35 cosmetics. The labeling violations are mainly focused on three aspects including the label without cosmetic ingredients list, no production batch number, and no imported cosmetics record number. Among them, Decorte series had the most violated issues involving 17 small sample products, accounting for almost half of the total number of the above brands.
The penalty letter shows that the parties selling a total of 35 cosmetics mentioned above without tax (tax rate 13%) sales amounting to over $23,900, with a value of $38,600 and a total of 1,134 cosmetics in stock.
And according to the Chinese "National Medical Products Administration": In China, the smallest sales unit of cosmetics should have a label. The labels should comply with relevant Chinese laws, administrative regulations, and mandatory Chinese national standards. The content needs to be true, complete and accurate.
Ultimately, Shanghai Municipal Administration for Market Regulation imposed a penalty of "confiscation of illegal income of over $23,900 and a fine of over $115,800," totaling approximately $140,000.
This reflects that there are still cosmetic operators in China who are not sufficiently aware of Chinese cosmetic laws and regulations and are not strict in their control of incoming products. Alternatively, some people in the actual business process also have a fluke mind and are obsessed with pursuing commercial interests but ignore risk control. Cosmetic samples are propping up a large market, but the relevant Chinese authorities need to strengthen regulation in order to ensure the healthy development of the Chinese cosmetics market.
Public information shows that HARMAY, a Chinese beauty retailer with years of experience in online operations, opened its first brick-and-mortar store in Shanghai in 2017 and has quickly become popular with its warehouse-style, "sample paradise" and other features. It now has nine stores in China selling more than 400 brands including well-know boutique and overseas niche brands.
In the sector of Chinese beauty collection stores, HARMAY has also been favored by capital. Earlier this year, HARMAY received about $200 million in Series D funding and has now completed four rounds of funding in total.
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