According to Guangdong Food and Drug Administration, Huadu Customs Comprehensive Technical Service Center and other one inspection and testing institutions failed to participate in the ability assessment as required for no special reasons. Thirteen inspection and testing institutions including Puni Testing Technology (Beijing) Co., Ltd. Shengzhen Branch were required to rectify within a time limit because the proficiency assessment results did not meet the requirements. Recently, Guangdong Food and Drug Administration the Notice on Reviewing the Rectification of Relevant Inspection and Testing Institutions and Carrying out Supervision and Inspection. The notice stated: According to the Notice of the National Medical Products Administration on the Disposal of the Results of the Capability Evaluation of Cosmetics Registration Inspection and Testing Institutions (No. 19 of 2022), Guangdong Food and Drug Administration will inspect and test cosmetic registration and filing with problems and review the institutional rectification and implement supervision and inspection. The notice shows that two inspection and testing institutions including Guangdong Zhongding Testing Technology Co., Ltd. and Huadu Customs Comprehensive Technical Service Center have failed to participate in the ability assessment as required for no special reason. Puni Testing Technology (Beijing) Co., Ltd. Shengzhen Branch, Qingyuan Food and Drug Inspection Department and other eleven inspection and testing institutions failed to meet the requirements of the ability evaluation. Guangdong Food and Drug Administration ordered fifteen inspection and testing institutions with problems to find out the problems existing in their own institutions, take corrective and rectification measures and take the initiative to sign up for the proficiency testing or measurement audit of the corresponding projects, in a bid to verify the rectification result and form a rectification report, which must been submitted to the Cosmetics Supervision Department of Guangdong Food and Drug Administration prior to May 9, 2022, Beijing time. As early as March 18, Beijing time, the National Medical Products Administration issued the above-mentioned the Notice of the National Medical Products Administration on the Disposal of the Results of the Capability Evaluation of Cosmetics Registration and Filing Inspection and Testing Institutions (No. 19, 2022) . The notice shows that a total of 58 inspection and testing institutions have problems, of which 40 inspection and testing institutions failed to meet the requirements for participating in the ability evaluation, 12 inspection and testing institutions had suspicious results in some items of ability evaluation, 6 inspection and testing institutions failed to participate in the proficiency assessment as required for no special reason. In essence, cosmetics inspection is an important part of the registration and filing of cosmetics in China. As the final checkpoint for cosmetics to reach consumers, cosmetics inspection and testing institutions shoulder a huge responsibility and the authenticity and accuracy of their reports will affect cosmetics' follow-up responses in the market. In addition, due to the huge increase in the demand for functional cosmetics in China and the rigid requirements of Chinese cosmetics-related regulations, testing institutions have also ushered in a big outbreak. It is reported that more than 50 cosmetics registration and filing inspection and testing institutions have been added since last year. In the context of the rapid increase in the number and quality of Chinese cosmetics manufacturers, strengthening the evaluation and supervision of cosmetics inspection agencies and strictly dealing with "problem" agencies has become one of the focus of current China's cosmetics supervision.

Recently, some former and current employees from Shiseido accused Shiseido for breach their personal information. The victims' personal information was used to open companies, withdraw bank deposits, obtain bank loans and carry out fraudulent operations. But the company's HR and legal teams refused to provide any help. Recently, Estée Laundry, a well-known account named as "counterfeit pioneer" in Instagram, exposed the breach of employee information at Shiseido's UK branch. The company has been accused by some of its employees and former employees of failing to notify affected employees of the breach. It was revealed that hundreds of former and current employees had their personal information leaked, including address, passport, ID and bank details. This not only had a serious impact on their lives, but even caused some of the (former) employees some property damage. According to the testimonies provided by Estée Laundry, the victim's personal information was used to open companies, withdraw bank deposits, obtain bank loans and carry out fraudulent operations. A former employee of the Shiseido branch told Estée Laundry that a company had been opened in his name to carry out fraudulent activities. In March, he discovered that his information had been stolen and was "forced to pay a court fee to get his name removed from the company. Another former employee said she "spent more than a month deleting and deactivating personal accounts" and trying to figure out how the person who stole the information managed to get access to the data and related personal information. Unfortunately, she learned from an old colleague that the company to which she had "dedicated six years of her life" was the one that had compromised her personal information. They had to spontaneously contact former colleagues and employees and inform them of the fact of the breach because the company's HR and legal teams refused to provide any help, including contacting former employees and alerting them." An anonymous victim told Estée Laundry. Several former employees of Estée Laundry have now stated below this post from the company that the information breach is true, and some employees who have worked for other regional branches of Shiseido have also expressed concern about the security of their personal information. Some commenters have even started calling for a boycott of Shiseido, the parent company of NARS and Drunk Elephant. However, neither Shiseido's headquarters nor its U.K. subsidiary has issued any comments. If these allegations are confirmed, this would be the second major information breach for Shiseido in six years. In November 2016, it was reported that an online mall operated by Shiseido's company IPSA was hacked. The intrusion had led to the theft of information and data of nearly 420,000 users, involving their names, addresses, and financial information. With the rapid development of technologies such as big data and cloud computing, the Internet has brought convenience to consumers, but also brought hidden dangers such as an illegal collection of personal information and leakage of user data. In recent years, there are few companies/brands that have suffered a crisis of trust due to information breaches, such as Facebook, Alipay, Jingdong and CITIC Bank. In the cosmetics industry, there is also no shortage of companies/brands that have been caught in information leakage scandals. In July 2020, Avon, a well-known direct-selling cosmetics brand owned by Natura & Co, was revealed to have leaked 19 million records, including personally identifiable information of customers and employees, including full names, phone numbers, birthdays, email and home addresses, and GPS coordinates, due to a cloud server configuration error. In China, more and more cases of violations are being disclosed as the country strengthens its regulation of personal information security. 2017 saw the media expose the breach of nearly 10 million pieces of user information by a former employee of Lily&Beauty. It is understood that the former employee of Lily&Beauty used the original master administrator account to steal the company's customers' personal information and resell it, making illegal profits of nearly $15,700. In this incident, the data leaked by him involved the Tmall flagship stores of many famous cosmetic brands, such as Inoherb, L'Oreal, Mac Factor, Maybelline, and Mamonde. Recently, a number of APPs were named and notified by the relevant departments for collecting user information in violation of the law, which involved companies in the beauty community including Yunji, Xiaohongshu, NetEase Kaola and so on. Previously, Guangdong police carried out the cleanup and rectification work of APPs collecting user information beyond the scope in the second quarter of 2019, and a total of 1,048 APPs were monitored and found to have collected user information beyond the scope. Combined with the notice issued by the Ministry of Industry and Information Technology of the People’s Republic of China for the first quarter of telecommunications services, the APPs of the main companies operating the e-commerce platforms, including Xiaohongshu, Netease Kaola and Yunji, all have problems such as the over-scope reading of user contact data, failure to publicize the rules for collecting and using users' personal information, and failure to inform the channels for inquiring about corrected information. From the current situation of consumers' personal information being leaked, hacking and security loopholes in the APP system are the main reasons.

French luxury design house Hermès achieved its sales of $3 billion, up 33% at current exchange rates and 27% at constant exchange rates. Eric du Halgouet, executive vice president of finance at Hermès, said on an analyst call that the China market started the fiscal year 2022 strongly, but has been closed since early March due to the restriction policy but still optimistic to Chinese Market. French luxury design house Hermès announced on April 14 its financial results for the first quarter of the fiscal year 2022 (ended March 31): sales totaled $3 billion, up 33% at current exchange rates and 27% at constant exchange rates, significantly higher than the 15% organic growth expected by the industry. Axel Dumas, Chief Executive Officer of Hermès, said: "The strong sales growth at the start of fiscal 2022 reflects strong consumer demand for Hermès products, while they demonstrate strong confidence in the craftsmanship and responsible operation of the brand. Despite the uncertainty of the external environment, the Group will accelerate its strategic investments, hiring and training efforts to support growth." In terms of region, Hermès achieved strong growth in all regions in the first quarter, with its store sales up 28% year-on-year. Eric du Halgouet, executive vice president of finance at Hermès, said on an analyst call that the China market started the fiscal year 2022 strongly, but has been closed since early March due to the restriction policy, which included three stores in Shanghai. He said, "We are confident in the reopening of the three stores in Shanghai, and the fundamentals of the China market are very impressive anyway." Since mid-March, stores have been closing in Greater China (particularly in Shanghai and Shenyang) due to anti-epidemic policies. January and February saw the reopening of the Pacific Place in Hong Kong and the One Center in Macau after renovations. At the end of March, Hermès opened its first new store in Zhengzhou, Henan Province, China. In terms of division, sales in the Fragrance and Beauty segment were $129 million, up 20% at current exchange rates. It is reported that Hermès was founded in 1837 in Paris, France, is a French luxury brand, known in the early years of the manufacture of high-class harnesses in Paris, France, and later launched bags, clothing, silk scarves, perfume, enamel, accessories and home furnishings. In 2020, it launch beauty products. Hermès launched its new beauty division in Paris on February 5, 2020. Axel Dumas, CEO of Hermès Group, has said: "In the long term, Hermès must enter the beauty segment, including cosmetics, fragrances, and personal care products. This could provide Hermès with sufficient channels and opportunities for distribution." On July 8, 2021, the Hermès Rouge Hermès lip-makeup collection was officially released in the Chinese market and went on sale in the brand's offline boutiques as well as official platforms such as the official website, WeChat mini program and Tmall flagship store. Hermès lipsticks are available in 2 series, matte and satin, in a total of 24 shades. Also lip brushes, lip balms and lip liners are available. It is understood that in Hermes perfume and beauty official flagship store on the Chinese e-commerce platform Taobao, the Hermes lipstick series has a total of 10 SKUs, the highest sales for Rouge Hermès lipstick, priced at $86.3, selected for the Tmall hot list of more than 300 yuan lipstick and ranked 14, ranking according to the previous day up one (as of April 15, 2022). The first place on the list is YSL THE SLIM MATTE LIPSTICK. At the beginning of the Year of the Tiger in the lunar calendar of China in 2022, Hermès Beauty, designed exclusively for Chinese consumers, launched a limited edition collector's edition Rouge Grenade No. 77 Satin Lipstick, choosing to pay tribute to China with this color and offering a beautiful symbolism. In March 2022, the Hermès beauty line launched a new facial foundation collection, Plein Air, which includes four types of products: foundation, loose powder and loose powder brush including 12 shades of foundation. According to the Hermes global website, the current price range of its products is about $400-$1,400. This series is not yet available in the Chinese market. Previously, Luc Hennard, CEO of Hermes Greater China, said in a media interview that the lip makeup series is also on sale in China more than a year later than in Europe due to the time required for process procedures such as obtaining licenses.

On April 13, Beijing time, Xiaohongshu, a Chinese social platform for a recommendation, released the Inspiration Book of Future Consumption in Beauty Industry with the first issue focusing on China's beauty industry. China's beauty industry is expected to be good in its development. The market size has gradually increased from $35.758 billion to $68.048 billion from 2016 to 2021, with a growth rate of more than 90% in six years. The proportion of consumer goods in China's social retail consumer goods has also increased from 0.69% in 2016 to 1% in 2021. While the market size of China's beauty industry has risen steadily and the growth space is broad, the competition is becoming more and more fierce, and traditional Chinese brands, international big names and China's cutting-edge brands are caught in a scuffle. Xiaohongshu, a Chinese social platform for a recommendation, is a social media marketing heavyweight for beauty brands, and it is also an important position for beauty recommendations. On April 13, Beijing time, Xiaohongshu, a social platform for recommendation in China, released the Inspiration Book of Future Consumption in Beauty Industry (hereinafter referred to as the Inspiration Book), with the first issue focusing on China's beauty industry. According to the Inspiration Book on Xiaohongshu, the users of the Xiaohongshu are mainly women, with women accounting for 89% and men accounting for 11%, with the majority of users being females. Fifty-five percent of Xiaohongshu' users are concentrated in the second-tier cities such as Wuhan and Changsha with more young groups under the age of 34, and users of Xiaohongshu are inclined to be young. In 2021, the boom of "applying Vitamin C in the morning and Vitamin A in the evening" as well as "applying the Salicylic acid" drove ingredient-related searches to increase by over 216% year-on-year on Xiaohongshu. There is a growing focus on cosmetic contact lenses, with searches up 57% year-on-year in 2021. It is worth noting that the beauty trends or beauty products that are loved by users on Xiaohongshu also shine in the sector of investment and financing. The keywords such as "Chengfendang" (the group of people concentrating on cosmetics ingredients) and "cosmetic contact lenses" triggered heated discussion on Xiaohongshu in 2021, which also became popular in the sector of beauty investment and financing in the same year. In 2021, the skincare category completed 33 financings, of which the number of rounds of 100 million yuan (about $16 million) reached seventeen. The main efficacy and ingredients of Chinese skincare brands such as ZHUBEN, LAN and Simpcare completed 2 rounds of financing within one year, and the ingredient trend drove the investment fever of all categories. The Chinese cosmetic contact lens brands like Moody, 4iNLOOK and kilala have received nearly 2 billion yuan (about $314 million) in financing a year, of which Moody has raised three rounds of financing a year. The "half-face makeup" getting crazed under the pandemic allowed investors to discover a new sector for eye beauty products. As an important platform for beauty products recommendations, Xiaohongshu is one of the users' favourite vertical categories to search, and the average exposure ratio of beauty notes search in the past six months is 1.6 times the average of all vertical categories. For many beauty users, doing a search on Xiaohongshu before buying beauty personal care products has become a habit. According to the Inspiration Book, the four major beauty trends in 2022 are efficient skincare, high-end makeup, single product Diediele (the stacking use of single beauty and personal care products) and de-genderization. Efficient skin care represents users prefer practical functional products, and related topics such as the search for "streamlined skincare" and "skincare pyramid" have increased by 170% and 560% respectively on Xiaohongshu. Couture beauty represents users who need more personalized and customized makeup, related topics such as the search for "how to judge olive peel", " the makeup for square face and round face " and "face folding" on Xiaohongshu increased by 470%, 1100%, and 163% respectively. Users hope that when the two single products are superimposed, the effect can be better, and related topics such as the search for "lip oil stacking" and "perfume spray stacking" have risen by 135% and 82% respectively on the search on Xiaohongshu. De-gendering is because men are becoming a new force in beauty, more cosmetics are added to the shopping cart by men, and related topics such as the search for "male's eyebrow shape" and "tone-up cream for males" have risen by 130% and 354% respectively on Xiaohongshu. Although China's cosmetics market shows a steady growth trend as a whole with the reputation as the second-largest cosmetics market in the world, there is still a certain gap between China's beauty industry and the industries in European, America, Japan and Korea in terms of the annual per capita expenditure and the number of listed companies. In 2020, China's annual per capita expenditure on cosmetics is about $94, which is 1/4 of the average annual per capita expenditure of the United States, Japan and South Korea. According to the statistics, there are currently fifteen listed companies in the field of beauty and personal care in China, while there are 31 in the United States, and the number of listed Chinese beauty companies is less than half of the US market. From this point of view, Chinese beauty brands still have a long way to go.

TikTok E-commerce issued a Public Notice on the Addition of "[Medical Device] Category Management Specifications to the company. After its parent company ByteDance has ventured into the medical field several times, its product TikTok has also begun to sell medical devices. TikTok E-commerce, a Chinese short video live-streaming e-commerce platform, issued a Notice on the New "[Medical Device] Category Management Specification (hereinafter referred to as the "Notice"), with a publicity period of April 7-14, 2022. According to the "Notice", TikTok E-commerce has integrated and added medical device products previously summarized in the "beauty", "personal care", "smart home" and " health care" industries, and divided them into 5 first-class categories: contact lenses/nursing fluids, family planning supplies, beauty and body medical equipment, health care/nursing/physiotherapy equipment and health care, including medical dressings, contact lenses, nose washers, nebulizers, gauze bandages (instruments) and other 42 sub-categories. Among them, the first-level category of "beauty and body beautification medical equipment" includes two second-level categories of "hygiene/wound/medical dressing" and "colour contact lenses". The Notice also requires that the two secondary categories only allow targeted access to brand flagship stores and at the same time implement category targeting, that is, the platform targets to invite some merchants and license them after reviewing the licenses. At present, there are only nine brands in the category of "health/wound/medical dressings", namely: Voolga, FulQun, Comfy, trauer, Cofoe, JUYOU Bio-tech, YIFU, FACE LIVE, WINONA, all of which are Chinese brands. It is worth noting that the Notice puts forward clear requirements for the form of promotion. At present, selling commodities in off-line stores and TikTok malls is only allowed. In addition, merchants and celebrities are not allowed to promote it in the form of live streaming and short videos. According to the National Medical Products Administration, the number of filings for online sales of medical devices in China rose from 20,000 in October 2020 to 73,000 in November 2021. The number of online platform filings for third-party medical devices jumped from 209 at the end of 2020 to 347 in 2021, the highest growth rate in the past two years. According to data from Deloitte and other research institutions, in 2020, the size of China's medical device market is close to $125.68 billion. With the continuous expansion of the sales scale on China's medical device network, violations of laws and regulations have also increased. In recent years, China has tightened its supervision in the medical and health field, especially in the field of medical aesthetics, which has become the main object of compliance supervision. In November 2021, State Administration for Market Regulation successively issued the Guidelines for the Enforcement of Medical Beauty Advertising and the Measures for the Administration of Internet Advertising (Draft for Public Comment), mainly to strengthen the supervision of medical beauty advertising, effectively maintain the order of the medical beauty advertising market, so as to further improve the internet advertising supervision system and protect the legitimate rights and interests of consumers. In March 2022, China tightened its medical aesthetic supervision again. In a short period of time, the National Medical Products Administration has issued two official notices on Adjusting the Classification Catalogue of Medical Devices, including the Announcement on Adjusting Part of the Classification Catalogue of Medical Devices (No. 25 [2022]) and the Announcement on Adjusting Part of the Contents of the Classification Catalogue of Medical Devices (No. 30 [2022]), both of which have made significant adjustments to the catalogue of medical beauty products and announced that China's medical aesthetic industry has entered a new strong cycle of regulation. We still don't know whether the medical devices included in TikTok E-commerce can become a new growth point for TikTok E-commerce this time. However, under the stricter supervision of relevant departments in China, most importantly, TikTok E-commerce has to do a good job in its platform supervision, namely, assuming their corresponding responsibilities. Otherwise, it may be punished for poor supervision before performance growth.

YATSEN, the parent company of Chinese beauty brand Perfect Diary, received a notification from The New York Stock Exchange that its American Depositary Shares (ADS) were trading below compliance standards. If the company's stock price is unable to recover the share price and the average share price is above $1.00 within 6 months, it is at risk of delisting. Under the rules of The New York Stock Exchange, if the average closing price is less than $1.00 for 30 consecutive trading days (excluding Saturdays and Sundays), the company will be considered below the compliance standard. Upon receipt of the notice, YATSEN must recover its share price and average share price to more than $1.00 within 6 months. During the six months of correction period, compliance is considered to have returned if the stock closes at $1 or more on the last trading day of any month and has an average closing price of at least $1 in the first 30 trading days of the last trading day of the month. If compliance is not restored before the expiry of the six months of correction period, the YATSEN will initiate stock suspension and delisting, which means that YATSEN is facing the risk of delisting. Founded in 2016, YATSEN owns a lot of skincare brands like Perfect Diary, Little Ondine, Abbys Choice, Galenic, DR. WU(Chinese mainland business), EVE LOM, Pink Bear, and EANTiM. In 2020, the scale of DTC consumers of YATSEN reached about 32.3 million. In addition, YATSEN is the first Chinese beauty group to land on the American stock market. Founded in 2017, as the main brand of YATSEN, Perfect Diary has been on a roll since its birth. During the Double Eleven Shopping Festival in 2018, Perfect Diary, which was established just one year ago in 2017, became the first makeup brand with sales revenue of more than 100 million on Tmall. During the Double Eleven Shopping Festival in 2019, Perfect Diary became the first domestic brand to top the makeup list on Tmall. At 15:14 on November 1, 2020, the payment amount of Perfect Diary's flagship store exceeded $47.08 million, becoming the first makeup brand on Tmall to break $47.08 million with the sales volume topping in the beauty category. During the Double Eleven Shopping Festival in 2021, Perfect Diary's cumulative sales exceeded $94.16 million, ranking first in the makeup categories on Tmall. As of 2020, Perfect Diary's market share in the Chinese beauty market reached 6.7%, becoming the second-largest makeup single brand after Maybelline, while the overall market share of Perfect Diary's parent company, YATSEN, reached 8.3% in the same period, ranking fourth in market share, making it the only local enterprise in the top five of the beauty group. During the Double Eleven Shopping Festival in 2021 on Tmall, Perfect Diary won the top one place in domestic brands in the makeup categories on Tmall with the omnichannel sales volume of the star products of the "NEW! 207 PERFECT DIARY README LIQUID LIPSTICK EVER-STAY PD029" achieving 974,000 pieces and the "SLIM LIPSTICK" 1.074 million pieces respectively. With the rise of new brands, the revenue share of the main brand Perfect Diary continued to decline, from 99.2% in 2018 to 79.8% in the third quarter of 2020. Although the main brand has achieved remarkable results, the financial report data of YATSEN is not so good. From 2018 to 2021, YATSEN's sales revenue was $99.65 million, $476 million, $821 million, and $916 million respectively, while the net profit was in a loss of $6.3 million, $11.82 million, $422 million, and $243 million respectively. Only the profit in the year before the listing is positive, which can be described as a total change when it is listed. In addition, the high proportion of marketing has always been the point where YATSEN and Perfect Diary have been criticized by the outside world. According to the 2021 financial report, the marketing expenses of YATSEN were $629 million, an increase of 17.41% over 2020, accounting for 68.60% of the revenue. Perfect Diary invested its 60% of sales revenue in 2020 in marketing. In this regard, YATSEN said that the beauty industry itself is an industry that relies on brand influence to drive the growth of sales. At present, the average marketing expenses of cosmetics companies are about 40% to 50%. However, as a new consumer brand of domestic beauty, it is in the early stage of brand growth and the overall marketing expense rate is higher than that of mature cosmetics companies. Therefore the claim that Perfect Diary marketing costs are much higher than in the industry doesn't hold true.

LVMH achieved sales revenue of $2.07 billion in Perfumes & Cosmetics in the first quarter, up 30% year-on-year. In Asia, revenue grew only 8% compared to 86% in the same period last year due to the impact of restrictions on the COVID-19 outbreak in March. Jean-Jacques Guiony, the chief financial officer of LVMH, said he was confident of medium- to long-term demand in China. On April 12, French luxury giant LVMH released its first-quarter 2022 results. LVMH achieved sales revenue of $19.5 billion in the first quarter, up 30% year-on-year. However, due to the impact of the epidemic closed-off management and store closures, revenue in Asia grew by only 8%, compared to 86% in the same period last year. "The company is off to a good start in 2022 despite the ongoing impact of the situation in Ukraine and the epidemic crisis." The financial report showed that the group achieved revenue operating income of $19.6 billion in the first quarter, an increase of 29% year-on-year compared to the same period in 2021. Asia also continued to grow during the quarter despite the tightening of health restrictions in China in March. In terms of business, the segment of LVMH, Perfumes & Cosmetics, achieved sales of $2.07 billion in the first quarter of 2022, with organic growth of 17% year-on-year. The financial report specifically praised the contribution of brands such as Dior, Guerlain, Givenchy and Make Up For Ever to the segment. Among them, Dior achieved good performance in fragrance, cosmetics and skincare. Especially driven by the U.S. market, Dior's market share gained strongly. Firstly, fragrances represented by classic scents such as Miss Dior, Sauvage and J 'Adore continued to perform well. Secondly, in cosmetics, the relaunch of Forever fluidfoundation and the emergence of Dior Addict lipstick improved sales growth. In addition, Dior performed well in the skincare lines Prestige and Capture Totale. On May 17, 2021, Dior officially announced young Chinese actor and singer Wang Junkai(Karry Wang) as the endorsement of the DIOR China Sauvage fragrance series. Wang Junkai enjoys 81.468 million followers on the Chinese social platform Weibo. Under his post on Dior endorsement, there are more than 270,000 comments, 1 million retweets and 489 thousand likes. Meanwhile, Guerlain is also gaining momentum with the fragrance. This is mainly due to the launch of the new Aqua Allegoria collection and the new boutique fragrance l'Artet la Matière. In addition, the AbeilleRoyale skincare line also contributed to the brand's performance. In addition to beauty brands, the LVMH Group also owns boutique retail businesses such as Sephora and DFS Global Duty-Free. In the boutique retail business, organic revenue growth was 24% in the first quarter of 2022 compared to the same period in 2021, achieving sales of $3.32 billion. In particular, Sephora delivered an excellent performance in this quarter driven by the recovery in Fragrances and Cosmetics. Sephora stores performed steadily in the northern U.S., France and the Middle East. However, the traffic was declining in Sephora China stores impacted by health restrictions. Revenue at DFS increased in this quarter, but at a lower incoming due to continued weakness in international travel. In terms of regions, the revenue in the U.S., Japan and Europe all recorded double-digit growth in the first quarter of 2022, up 26%, 30% and 45%, respectively. In Asia, revenue grew only 8% compared to 86% in the same period last year due to the impact of restrictions on the COVID-19 outbreak in March. In a conference call with analysts on Tuesday, Jean-Jacques Guiony, the chief financial officer of LVMH, said he was confident of medium- to long-term demand in China once the situation returns to normal. Growth has been hampered by the impact of the epidemic including the closed-off management in Shanghai, which forced the group to close 15% to 25% of its stores in mainland China since March 15. He added that the Chinese government has previously demonstrated its response to control the outbreak quickly (especially in 2020). And he didn’t think the current situation is any worse than it was then. He predicts that the blockade in Shanghai will be eased relatively soon. China has proven its ability to take very strong and broad measures to contain the outbreak in a fairly short period of time, and we believe that China's major luxury markets will rebound as quickly as they have in the past. Analysts at Citibank said, "It may be worthwhile to look to the Chinese market in the second quarter." Citibank plans to maintain a Buy rating on the group's stock.

Companies should see the pandemic with optimism for no reason. In the face of the common difficulties, companies should help and complement each other in terms of the internal resources of the industry and explore the survival ideas of China's cosmetics industry in difficult times. Due to the current severe situation of the prevention and control of COVID-19 in China, many related exhibitions in China's cosmetics industry have been canceled or postponed. On April 13 (Beijing time), Sun Laichun, the chairman of Chinese essential oil skincare brand Forest Cabin, held a sharing meeting online with the theme of "Some Thoughts on Self-Help and Operation of Enterprises under the Regular Pandemic Prevention and Control". Sun Laichun, the chairman of Forest Cabin, shared Forest Cabin's survival method with people in the Chinese cosmetics industry from three aspects: "the strategy that Forest Cabin can take under the COVID-19, Forest Cabin's long-termism behind its optimism to respond to the COVID-19 and how enterprises should practice long-termism". During the COVID-19 crisis, Forest Cabin's strategy is "adjusting the status, finding a method and strong implementation". Above all, to adjust the state, especially for the company's senior staff who must show their best state to their team. Companies must maintain a positive state no matter how many difficulties and setbacks are encountered. Second, to find a way. The truth is that a good state cannot be without a good method. With the general stagnation of offline sales encountered in the Shanghai cosmetics industry, online sales are also restricted due to logistics problems. But how Forest Cabin takes the method to ensure the cash flow of the enterprise so that the enterprise can survive? Sun Laichun said: "The establishment of a sub-warehouse by Forest Cabin can guarantee that if the Shanghai warehouse can not be shipped, Wuhan warehouse, Wuxi warehouse and other warehouses in China for delivery could be transferred to so as to protect the needs of consumers." In addition, some consumers are worried about the presence of viruses in the courier. This can explain to the customer that the goods are not sent from the Shanghai warehouse, shoot the video of the courier disinfection and take the express non-contact delivery and other ways to dispel the customer's concerns. Then, to solve the logistics problem, it is possible to lay out inter-provincial barges to achieve cross-provincial round-trip transportation and ensure that goods can be shipped out of Shanghai. Eventually, to order a strong execution. "When the employees are not in good shape and work in an inactive way, the boss can quickly convey a command or a clear task for them to perform, and then you will find that the ideas and methods they come up with will be more comprehensive than the boss thinks." Sun Laichun said. After the implementation of the strategy, in the face of such a serious pandemic in Shanghai and the sharp decline in foot traffic, Forest Cabin's offline physical store performance was still the same as that of the same period last year. On April 12 (Beijing time), the daily sales revenue of Forest Cabin's store in Shanghai also ranked second in China. At the sharing meeting, Sun Laichun also shared that Forest Cabin planted 280 mu (about 666.67 square meters) of camellia flowers, donated 330 mu of red camellia seedlings and expressed his willingness to encourage farmers to leave 50 million red camellia trees for the world in the future. Not only that, but Forest Cabin also donated $78,600 worth of “Camellia Repair Moisturizing Hand Cream” to China's frontline anti-pandemic personnel. At the end of last year, Forest Cabin also established the first carbon-neutral scientific and intelligent manufacturing base in Shanghai. The plant was built based on the carbon-neutral standards, low carbon and green philosophy, a total cost of $40.8 million, which can reduce energy consumption and facilitate the products selling in foreign countries Forest Cabin's future and export. "Making the skin of human beings and the earth more beautiful" is the mission of the enterprise and the social responsibility of the enterprise. It is easy to understand that making human skin more beautiful while making the skin of the earth more beautiful requires enterprises to practice the concept of green environmental protection development and to protect the earth's home while developing the brand. Sun Laichun said, "Public welfare and charity must be a long-term doctrine that a brand should practice." Currently, more than 400 Forest Cabin's stores exist in China and a total of 700 stores are in prediction. In China's south China, Guangxi, Jiangxi, Jiangsu and other regions where Forest Cabin has not set its foot, it's ready to open chain stores. In the future, Forest Cabin will open stores in a proportion of one-to-one, namely, the construction of a direct-sale store will match a chain store correspondingly. Today, when online e-commerce is so developed, why is Forest Cabin still constantly laying out offline channels and constantly opening brand stores? Sun Laichun said: "If there is no offline store, is it still a brand? A brand still must have a consumer experience because human beings always have the need for a shop. All retail is a service industry and vice versa. Forest Cabin is a retail industry and also needs to provide skincare services to customers because services will increase the loyalty of customers." It is worth noting that Forest Cabin has also launched a new brand strategy to build an OMO model to respond to the COVID-19 through the support of online high growth momentum and a direct operating system. The former "O" of OMO represents online, as the main export of brand promotion and sales, and achieves rapid growth by exerting the potential energy accumulated by the brand. The latter one represents offline, undertaking the brand experience and service so as to ensure public praise. Finally, Sun Laichun has repeatedly said that companies should see the pandemic with optimism for no reason. In the face of common difficulties, companies should help and complement each other in terms of the internal resources of the industry and explore the survival ideas of China's cosmetics industry in difficult times.

P&G India announced at the Sustainability Summit "This is Our Home" in Mumbai that it has successfully achieved its "plastic neutral" goal in the past year. At the 4th China International Import Expo in early November in 2021, P&G also highlighted its sustainability business by exhibiting under the theme of "Smart Life, Sustainable Future". Its sustainability goal "Net Zero 2040" was unveiled on site. On March 31, P&G India announced at the Sustainability Summit "This is Our Home" in Mumbai that it has successfully achieved its "plastic neutral" goal in the past year (from April 2021 to March 2022), according to The Times of India. " In the story, reporter from The Times of India Salman-Chatterjee said that "plastic neutrality" is part of the "carbon neutrality" strategy. While "carbon neutral" means offsetting carbon dioxide or greenhouse gas emissions from production activities in the form of afforestation and energy conservation. "Plastic neutral" means balancing the total amount of virgin plastic produced and used with the total amount of recycled plastic that is recovered and reused. In short, for every kilogram of plastic sold in P&G India, they remove and recycle one kilogram of plastic from the environment, either by funding related organizations or by direct intervention. In fact, P&G is a veteran of sustainability. "Sustainability is a tradition that P&G has maintained for more than 70 years," said Xu Youjie, chief sustainability officer and vice president of communications and public relations for P&G Greater China. And as early as 1956, P&G already released its first environmental safety report. In 2010, P&G made a commitment to make 70% of its laundry loads on the low-energy wash cycle by 2020. P&G achieved these goals in 2019. It is also estimated that since 2015, American consumers have reduced CO2 emissions by approximately 1,500 metric tons by increasing the use of low-energy wash cycles. This amount is equivalent to more than five times the emissions currently generated by P&G's global manufacturing and operational activities, demonstrating that positively influencing consumer behavior can have a significant impact. A global study released by P&G shows that 71% of people want to do more to help sustainability at home, and 82% of parents surveyed said they are inspired by their children to join the effort. However, nearly half of those surveyed were unable to make the choices in their daily family life that would help protect the environment as much as they would like to. For most, "not knowing how to do it" is the biggest obstacle they face in adopting sustainable living habits. Meanwhile, research in China also shows that 43% of the public has been very concerned about global warming and is willing to contribute to low carbon, but when it comes to specific initiatives, only 33% of respondents say they know how they can reduce greenhouse gas emissions. Procter & Gamble also made a great contribution to sustainable movements in China. At the 4th China International Import Expo in early November 2021, P&G also highlighted its sustainability business by exhibiting under the theme of "Smart Life, Sustainable Future". Its sustainability goal "Net Zero 2040" was unveiled on site. From a macro perspective, P&G China's sustainability strategy focuses on three major areas: climate, water, and waste. P&G plays a role in three main dimensions: First, influencing consumers through the P&G brand, which has grown with Chinese families for 33 years and has strong brand penetration. Second, influencing upstream and downstream partners, as the retailer channel is an important link between P&G products and consumers. Third, influencing partners, external experts and internal employees to integrate sustainable thinking into every day life. For example, P&G advocated a paperless office internally to hold a paperless challenge. It planted 4,000 trees in Dunhuang for the team which significantly reduced paper usage. Xu Youjie introduced, "This year, P&G employees' awareness of the concept that 'sustainability is relevant to my daily work' has reached 90%." From a micro perspective, whether it is "Mission 2030" or "Net Zero 2040," P&G hopes to implement sustainability into every step of the product's life cycle. For example, the e-commerce model generates a lot of logistics waste with high material consumption and troublesome disposal for consumers. This year, P&G independently developed a lighter, more convenient and reliable "air capsule", which can reduce the use of packaging materials: the main body of the packaging is made of a single material without additional sets of cartons and tape. Xu Youjie said "Compared with the traditional e-commerce packaging, the amount of materials reduced by 40% ". In terms of consumer experience, this special structure of the packaging, can cushion the impact of the product in the courier process, and reduce the impact of rain and wet on the package, and, without tools, consumers can open the package and release the air in the package through the tear line. To sum up, P&G put forward the "Net Zero 2040" strategy, which also shows P&G's sustainable work in actual product raw materials, production, logistics and recycling, and conveys P&G's corporate social responsibility.

Dermatological-grade skincare brand HEPROA completed nearly 10 million Pre-A round of financing, and the investor is Mingfeng Investment. This round of funds will be used for brand upgrading, team building, and channel expansion. HEPROA is a dermatological skincare brand and the parent company is Shenzhen Haichuang Biotechnology Co., Ltd. The founders are Liu Zhigang, the former vice dean of SHENZHEN UNIVERSITY HEALTH SCIENCE CENTER, and Wang Zhiyao, PhD in immunology from the University of Oxford in the United Kingdom and the chairman of the Asia-Pacific Association of Allergy and Clinical Immunology. The brand adheres to the new concept of microecological research and skincare, based on skin allergic reactions and immunological research. It provides a sophisticated, effective, and safe skincare solution for skin microecological imbalances such as ageing and damaged barriers through continuous refinement of active ingredients. The founding team of HEPROA has been equipped with over 20 years of experience in the research and development of functional skincare products, functional foods, probiotics, and drugs. HEPROA has published hundreds of scientific research papers in many international journals. Previously, it has been providing professional formula research for the more famous skincare foundries in China, and at the same time providing scientific research support for many listed pharmaceutical companies. Relying on the strong scientific research strength of the University of Oxford and Shenzhen University, HEPROA has established the HEPROA-Shenzhen University Joint Laboratory, jointly conducting more than 5,000 active ingredient and skincare science experiments, publishing more than 100 related SCI papers, and submitting more than 30 exclusive invention patents. The brand's core patented ingredient is HEPRO-6A™. HEPROA claims that HEPRO-6A™ is a highly effective patented skincare ingredient extracted from more than 200 strains of probiotics, nearly 1,000 kinds of prebiotics, and more than 300 kinds of natural plants through activity tracking and high-throughput screening methods, which can effectively promote the proliferation of fibroblasts and stratum corneal cells, strengthen the skin microecological barrier, promote type I collagen synthesis, give the skin better firmness and enhance the skin barrier function. At the same time, HEPRO-6A™ can effectively inhibit the excessive secretion of inflammatory factors and oxidation factors induced by harmful substances, alleviate the damage of the stratum corneum of the skin and delay ageing, and thereby six exclusive invention patents have been submitted. According to HEPROA, each product of the brand has been evaluated by cell and animal experiments and all finished products have passed the efficacy test of authoritative third-party clinical clinics for at least 2 months. HEPROA's biggest advantage lies in independent research and development, automatic control of the supply chain not relying on ODM research and development and procurement, strict selection of upstream factories for in-depth cooperation, the use of functional raw materials are directly supplied by the world's top raw material companies and evaluated by the efficacy activity of HEPROA laboratory, so as to ensure that each product of HEPROA is safe and effective. The brand's star product is the DR series, which has been listed for less than a year, and the HEPROA has reached a high score of 4.98 (out of 5 points) on the Taobao store and a repurchase rate of 42.6%. Its star item is the "LET BEAUTY HAPPEN NATURALLY", the highest-selling product in the DR cosmetics flagship store on Tmall, priced at $47. As of April 13, the monthly sales volume is over 1000. The overall score of the DR cosmetics flagship store on Tmall reached 4.9 points (out of 5 points), and the price of the product was $11 to $47. HEPROA revealed that the new upgraded product will be launched in April this year, with the "shiguangzhui" (Light cone) as the inspiration for the exclusive design of the mould bottle body, unique in the dermatological skincare industry, featuring a distinctive brand. The high-grade semi-transparent bottle with a bare gold screw cap and a matte texture perfectly match the brand for the anti-ageing group. In the next three years, HEPROA will also establish a large database of human microecology to prepare for private customized skin and intestinal microecology products. HEPROA has completed the layout in the research and development of new raw materials for skincare products and is expected to complete the application for new cosmetic raw materials such as anti-ageing in two to three years.

On 8 April, UNNY CLUB released a new product "UNNY CLUB MOISTURE NOURISHING FOUNDATION", known as "OUTERMOST LAYER OF SKIN AFFECTION", which is free from taking off makeup, making skins oxidize and creating acnes. There are three shades of this liquid foundation. It is currently on sale in the official flagship store of UNNY CLUB on Tmall. The price is $11 to $16. It is understood that this new makeup foundation is an upgraded version of the "UNNY CLUB MATTE SMOOTH PRESSED POWDER", which claims to be long-lasting for 12 hours and contains the antioxidant factor L-Carnosine. It can be durable and not oxidized, suitable for oily skins. UNNY CLUB is a brand of PELEY. Founded in 2010, PELEY is a new generation of cosmetics brand management group that "empowers the integration of multi-brand R&D and operation". In the past 10 years since its establishment, PELEY has successively created 15 major brands, including UNNY CLUB and RNW, which have a GMV of more than $471 million, covering four major areas of makeup, skincare, personal care, and fragrance, with the sales revenue of more than $314 million in 2020. According to the official website of UNNY CLUB, it was founded in 2014 and is a minimalist natural beauty brand in China. With minimalism as the design concept, it specializes in skin science for Chinese women and creates three series of products like makeup, washing, and skincare by using the brand concept of "simple and pure". It is understood that UNNY CLUB's makeup has several categories such as base makeup, eye makeup, lip makeup, etc. Skincare products cover masks, toner and lotion, sunscreen, and other categories. In addition, makeup sponges, powder puffs, and other beauty tools are included as well. The brand's star product is sunscreen, and UNNY CLUB's sunscreen is divided into two versions for combination skin: "MY FAIR MOIST SUN LOTION" and "UNNY CLUB RELIEF WHITENING SUN CREAM". Its sunscreen products have exceeded 100,000 monthly sales volume in the Tmall flagship store, a mainstream e-commerce platform in China. Zhu Zhengting, a Chinese idol, is the spokesperson for sunscreen products in UNNY CLUB in Asia areas, and Zhengting has nearly 24 million followers on mainstream social platforms in China. In addition to sunscreen products, its facial cleanser, powder, eye shadow, lipstick, nose stickers and other products have also crazed on the Pinduoduo platform, and the sales of a single link have exceeded 100,000 pieces. In 2020, under the influence of the COVID-19, UNNY CLUB also gained a total of more than $390 million of GMV for the whole year, an increase of more than 50% year-on-year, which successfully topped the sales of the new categories such as eyeliner, liquid eyeshadow, eyebrow powder and concealer. Among them, eyeliner and concealer have remained the second place for many years and liquid eyeshadow has rushed to first place in the category. As of now, UNNY CLUB has 8 single categories entering the top 10 of the whole online industry, continuing to consolidate its position as the largest brand in the field of distribution and beauty on Taobao. In the offline market, UNNY CLUB has reached strategic cooperation with cutting-edge beauty collection stores such as KK Group and SanFU, which is regarded as an official offline channel to jointly help UNNY CLUB become the top brand in sales. UNNY CLUB pioneers the model of "buying its goods and delivering complementary products" and also supports the transformation and upgrading of the national CS top 100 small makeup brands joining. As of November 2020, its offline GMV has exceeded $47.1 million. These shining achievements are from UNNY CLUB's multi-category, multi-channel, and strong supply chain. It is understood that each product of UNNY CLUB will pass over 3,000 experiments and over 90 raw material tests before being launched. Due to the far-reaching impact of COVID-19 on overseas supply chains in 2020, it shifted its overseas supply chains to China. At present, its production of products in China accounted for more than 40%. In order to pursue product quality and safety, UNNY CLUB has also specially adopted the method of importing raw materials into the domestic filling. This localization also greatly improves the efficiency of shipments and the circulation speed of distribution. At present, UNNY CLUB's supply chain has covered other countries like South Korea, China, Japan, Italy, Switzerland, and Australia. In March 2021, UNNY CLUB entered China's mainstream live streaming platform Kwai. During the six months of operation, UNNY CLUB's eyeliner, liquid eyeshadow, sunscreen, eyebrow powder, makeup remover, and other products have entered the live broadcast room of a number of hot live streamers through strict selection standards and processes. The volumes and sales of UNNY CLUB's products continue to go up, of which essential oil cleansing makeup remover was sold up to 230,000 pieces in 3 months. In September 2021, UNNY CLUB won the award of "2021 Kwai Beauty Quality Brand".

On April 11, Beijing time, Tencent Smart Retail released the "T+ 2021 Ranking". It is reported that the "T+ 2021 Ranking" covers ten industries and is the first annual value list in the Chinese industry to comprehensively measure the business status of brands' private domains. On April 11, Beijing time, Tencent Smart Retail, a business of Chinese Internet giant Tencent, released China's first industry-wide "T+ 2021 Ranking". In the beauty and cosmetics segment, many cosmetic brands such as Armani Beauty, Clarins, Estee Lauder, YSL Beauty, Forest Cabin and CHANDO made the list. Private traffic is a field that is directly owned by a brand and can be repeated at low cost or even free to reach users. This means that companies can build stronger relationships with customers with private traffic and continue to accumulate customer data to deepen their understanding of customer needs, and thus help increase conversion rates. In the private traffic environment, customer stickiness is enhanced and trust in the brand is consolidated, which will bring a multiplier increase in customer unit price. Moreover, the private traffic also breaks the previous limitation of single-point customer repurchase. Through the sharing mechanism, the repurchase can be continuously fissioned. The private traffic can multiply people by the previous one person spreading to the surrounding family and friends bringing 10 times or even 100 times. Chang Yue, Vice President of Smart Retail Marketing of Tencent, said, "Private traffic is like a heart that can continuously provide momentum for the digital operation and growth of the whole traffic. After defining the strategic positioning of private domains, companies can combine their own situation to extend, implement in a structured way and adhere to long-termism, which will definitely reap a new value. We believe that the endgame of private domain is a new business model of integration of the whole domain linkage." In addition, according to Tencent's disclosure, the daily activity of users of WeChat mini programs exceeded 450 million in 2021, and the physical transaction volume of merchants' own businesses doubled year-on-year. The GMV of mini programs in the beauty sector with Tencent's smart retail cooperation achieved 100% growth in 2021, and the need to develop private traffic has become a consensus in the beauty industry. In today's increasingly fragmented and diversified information access channels, the decision chain for consumers to build awareness of brands, research them in depth and generate purchases is no longer linear. The importance of private traffic is becoming more and more prominent because of its better user experience, which can help beauty brands better improve the key aspects of "social" and "experience". As a more mature sector, many beauty brands and retailers have already explored very diverse and efficient ways to play private traffic. In 2021, LA MER has unified its goal, linking multiple internal core departments EC, CRM and CE to collaborate and build private traffic from none to start, achieving 38 times growth in the number of 1V1 exclusive enterprise WeChat and 7 times growth in the number of community members, perfecting the brand business growth point, and increasing the total UV of brand small programs by 190% and business volume by 85% for the year. As a world-renowned beauty and personal care retailer, Watsons has implemented the O+O platform strategy to break through the limitations of O2O in the past and precisely reach customers through its network of over 4,100 offline stores in China and online platforms such as applets, communities, BA corporate WeChat, service assistants and video numbers exceeding 40 million people. The CEO and senior management of the company are also active in the front line of private traffic operation for a long time, which is a visual manifestation of the "importance of private traffic construction". For example, in early February 2020, the outbreak of the epidemic caused heavy losses in China's offline stores. In order to achieve the closure of stores without closing down, Sun Laichun, chairman of Chinese essential oil skincare brand Forest Cabin, personally went into action and led thousands of store guides to live-stream the mini program together. While the company also placed WeChat ads in the moment to impel the transaction in WeChat Corporate. New customers can click to buy through the Wechat ads. After the transaction and then customers are led to add accounts of WeChat Corporate, coupled with the regulator customers' online repurchase. In this way, Forest Cabin’s performance is shining in the quarter instead of decreasing. Beauty brands that operate in private traffic should first abandon the thinking of selling goods first and need to adhere to the people-oriented creating value for consumers is the core. Secondly, the beauty brand to do a good job in the private traffic has to run through the entire life cycle of consumers, interlocking, that is, to make the user as followers, followers to make value and value for all the time.