Korean cosmetics giant Amore Pacific's brand Innisfree will be withdrawn its store in Chinese market. It aims to reduce the number of stores to about 140. Korean cosmetics giant Amore Pacific's brand Innisfree will be withdrawn its store in Chinese market. It aims to reduce the number of stores to about 140. According to the information, Innisfree had more than 600 stores in China during its prosperous period. In other words, compared with its peak, the withdrawal rate of stores is as high as 77% today. In response to the news of store’s closures, the person in charge of Amore Pacific said that the group is optimizing the channels of Innisfree, and such adjustments will continue into 2022. The person in charge also said that the Amore Pacific Group will carry out a new round of strategic adjustments for the Chinese market, but only the optimization and reduction of the stores of Innisfree, not involving other brands. In addition, Amore Pacific Group also said that in the future, the group will focus on the mid-range and high-end and online areas in the Chinese market. Innisfree targets affordable cosmetics for young women aged 20 to 26. It officially entered the Chinese market in 2012 and has been entering China's second and third tier cities at the rate of 100 new stores per year since 2014. The popularity of Innisfree is inseparable from the popularity of Korean culture at that time. However, the Korean Trend has gradually cooled down in China since 2017 and the performance of Innisfree has been declining. In 2019, it closed 40 loss-making stores and it will close at least 90 more loss-making stores in 2020. In May 2021, it is rumored that it will close about 170 stores in China. In fact, Innisfree is not the first Amore Pacific brand to close a large number of stores in the Chinese market. Etude House, one of the group's brands, closed all its offline stores in China in March 2021 and it retained only its offline beauty collection channel "The Colorist". Other channels have switched to online operations. According to its official website, Etude House entered the Chinese market in 2013 and it had opened 58 brand-direct stores in 25 cities at its peak, including Beijing, Shanghai, Guangzhou and Wuhan. In addition to the Amore's Innisfree and Etude House bites the dust. In 2021, LVMH's brand Benefit also made massive layoffs of Chinese offline counters and shift its focus to online and Sephora channels. Moreover, L'Oreal's active cosmetics brand VICHY has shifted its focus from offline department stores to pharmacies. The poor performance in China is not unique to Amore Pacific as a foreign cosmetics company. In fact, almost all foreign cosmetics companies in China have suffered some degree of defeat.

On January 1, 2022, the Regional Comprehensive Economic Partnership (RCEP) officially entered into force and products such as cosmetics were not included in the list of commitments on tariff reduction. On January 1, 2022, Regional Comprehensive Economic Partnership Agreement (RCEP) officially came into force, and six ASEAN member countries, including Brunei, Cambodia, Laos, Singapore, Thailand and Vietnam and four non-ASEAN member countries, including China, Japan, New Zealand and Australia, officially started to implement the agreement. RCEP is the world's most populous, diversified and promising free trade agreement that China has signed. Data shows that more than 90% of the trade in goods between approved member countries will eventually achieve "zero tariffs" after the agreement comes into force. Among them, cosmetics and other products are not included in the list of commitments on tariff reduction. At present, the "RCEP duty-free list" of light industrial goods is updated. But some products such as cosmetics are not included in the list of commitments on tariff reduction in order to protect the development of local Chinese enterprises. Perfumes, cosmetics and skin care products, hair care products from Japan that imported to China will maintain the current 10% tax rate, fur clothing will maintain the current 23% tax rate. Guo Yongxin, deputy secretary-general of the China National Light Industry Council, said these protective measures leave some time for Chinese light industry enterprises to seize the opportunity and enhance the competitiveness of the industry. " Cosmetics industry in Japan and South Korea indeed boast higher industrial development and stronger capacity. So we implement stage protection. Japan and South Korea will also increase investment in local enterprises of China. Fundamentally, it is still necessary to compete head-on from the perspective of industrial upgrading." Currently, information related to the RCEP including the Chinese and English texts is available on the China Free Trade Zone Service website (http://fta.mofcom.gov.cn/rcep/rcep_new.shtml) and functions related to the tax rates that will come into effect on January 1, 2022 are also online.

As one of the world's top ten beauty giants, how does Beiersdorf view the Chinese market? What are the future development plans? In this regard, Qeyes interviewed Xue Wei, Managing Director of Beiersdorf Northeast Asia. Promoting Digital Construction and Innovation Transformation New face is showed in each year's China International Import Expo. This year, at the oversized interactive booth in Hall 6.1 of the Consumer Goods Pavilion, Beiersdorf made its debut at the Expo with more than a dozen of its brands. In the past year or so, the beauty giant has been making moves such as transforming and upgrading its brands, establishing the second largest global R&D center in China and strategically partnering with Tmall's New Product Innovation Center. Meanwhile, Beiersdorf welcomed a new helmsman in April 2020 - Xue Wei. After a series of transformations and upgrades, Beiersdorf achieved high growth in the first half of 2021 and has been higher than the performance before the pandemic As one of the world's top ten beauty giants, how does Beiersdorf view the Chinese market? What are the future development plans? In this regard, Qeyes interviewed Xue Wei, Managing Director of Beiersdorf Northeast Asia. Rooted in China, long-term optimism in the Chinese market Beiersdorf was founded in 1882 in Hamburg, Germany. The company mainly develops, produces and sells high-quality skin care products, band-aids and adhesive tapes, etc. Its products are sold in more than 100 countries and it is one of the top ten cosmetic groups in the world. The debut of Beiersdorf in the Expo is also considered to be a "renewed relationship" with National Exhibition and Convention Center(Shanghai). Xue Wei introduced that Beiersdorf has been associated with China for 100 years and has been expanding its business in China. During which time one of the company's former factory reserve sites is now National Exhibition and Convention Center(Shanghai). The National Exhibition and Convention Center(Shanghai) was located in Da Hongqiao 10 years ago, Beiersdorf signed a contract to move to Qingpu Industrial Park in order to support the construction of National Exhibition and Convention Center. After 10 years, Beiersdorf, as an exhibitor, set foot on this land again with its brands. It is a return and a new departure. At the Expo, Beiersdorf brought more than ten core brands, including the well-known brands NIVEA, Eucerin, Coppertone and tesa, as well as the new brands Florena, Chaul and Hansaplast, which were recently introduced to China. It is worth mentioning that Nivea LUMINOUS630, the black technology of Beiersdorf, is a breakthrough spot whitening patented ingredient proven by Beiersdorf for 10 years from more than 50,000 ingredients, which can effectively whiten skin and make skin tone clear and bright without irritation. In addition, Skinly, a cutting-edge skin testing device that was first exhibited in China and the world, and VR Journey, the Group's original black technology, also came to the booth to meet Chinese consumers for the first time. Participating in the Expo is a new starting for Beiersdorf. Xue Wei said that the Expo is a good window to showcase. Through this platform, Beiersdorf is able to show Chinese consumers the Group's latest research results in research and skincare and let consumers understand the Group's product matrix, corporate mission, as well as the development and process in sustainable development and other aspects. The debut of the Expo is a strong proof of Beiersdorf's continuous optimism in the Chinese market. Another important action was the official launch of the Beiersdorf Global Innovation Center on November 7. This is the second largest global R&D center of Beiersdorf Group besides its headquarters in Germany with a total investment of about 70 million yuan. The Innovation Center will support new product development in the Northeast Asian market with a focus on the Chinese market as well as in emerging markets and will gradually realize the need to support global R&D in certain categories. "In the past few years, Beiersdorf keep a slow and steady wins the race in the Chinese market. In the first half of last year, Beiersdorf in China achieved relatively stable growth," said Xue Wei. In Beiersdorf’s global strategic program C.A.R.E. + , the Chinese market is one of the Group's focus areas. The headquarter of Beiersdorf Group values the long-term development in China. The group that insists on high quality and high standard of scientific research and skin care will have a great future in the Chinese market. At the same time, the Group hopes to become a link between China and Germany to promote the spirit of "One Belt & Road" and bring more of the company's accumulation, innovation and sustainable development in the field of research and skin care to the Chinese market. Taken advantage of the first year of the new cosmetic regulations, the group defines a bright future of health and quality for consumers and the environment together with the industry. Paying more attention to e-commerce and grasping opportunity to launch new product According to Beiersdorf Group's first-half financial report, the company has fully recovered from the impact of the COVID-19. Its organic sales increased by 16.2% year-on-year to reach 30 billion yuan in the first half of the year including a particularly impressive performance in the second quarter. Its organic sales increased by 28.3% year-on-year in a single quarter. Consumer segment sales grew 13.6 percent to $23.8 billion. "The high growth in the first half of the year was mainly due to the better results achieved by each brand," said Xue Wei. Among them, organic sales of NIVEA grew 9.1% year-on-year with strong sales growth in its body and facial skin care products, which even well ahead of 2019. The scientific skincare brand, Eucerin, saw organic sales increase by 22.1% year-on-year due to increased consumer demand for repair and efficacy products after the pandemic. La Prairie, the Group's premium brand, opened a flagship store in Tmall this year and continued to make efforts in digitalization and e-commerce with sales up 41%. Scientific innovation has contributed to the high growth rate. NIVEA Luminous Spotclear Intensive Treatment Serum has achieved remarkable results since its global launch: sales figures have reached record highs. It ranked number one in facial serum in Europe eight months after its launch and the series' GMV through cross-border e-commerce platforms increased 240% during the Double 11(Chinese Shopping Carnival) compared to another campaign on June 18 in the same year. In addition to deepening the existing brands, Beiersdorf also continues to enrich the brand matrix and introduce new brands, such as Florena (botanical skin care) and Chaul (enzyme skin care). Xue Wei said that Florena is currently operating through cross-border e-commerce. Among them, Florena is a plant extract brand from Italy and its core product is skin care oil. In the past two years, oils are becoming more and more segmented in skin care. Many consumers want to try some new products. At the same time, the ingredients of Fortuna's products are extracted from plants, which is a characteristic of the brand and a major trend in the development of cosmetics. That means more brands will develop in the direction of natural ingredients in the future. The success of several brands is rooted in the brands' emphasis on research and consumer insights but also in Beiersdorf's increased focus on e-commerce and its ability to manage the pace of new launches. According to Beiersdorf's second quarter results, a quarter of the growth in the Consumer Goods business and a third of the growth in the Research & Skincare business unit came from e-commerce. In order to realize the full potential of the digital transformation, Beiersdorf will also continue to invest more in digital projects. On the other hand, the brand Nivea of Beiersdorf Group and other brands are accelerating their new product development strategies. On September 23 this year, the Group also signed a strategic cooperation with Tmall New Product Innovation Center to promote new product development and innovation in the skincare sector which focuses on uncovering new products that are relevant to Chinese consumers' needs. However, Xue Wei said that the current e-commerce is in a stage of revolution and e-commerce now also tends to be fragmented and visible. Consumers may be seeded in any e-commerce and social platform. In response, there is a need to improve the quality of the speed of promoting new products. When building products, a clear positioning and insight into the consumer is the first need. Before the product is launched, we need to dialogue with consumers to understand whether the product can solve the consumer's pain points and what specific problems can our products. Careful insight, patient polishing and returning to the product itself are the right ways to build a good product. Digitalization and innovation are the core drivers of transformation "Digitalization and innovation" are the two core elements of Beiersdorf's transformation. During the conversation, Xue Wei kept mentioning that these two elements are the key to the next transformation of the Group. Beiersdorf's second quarter financial report also mentioned that reaching consumers through digital channels will be one of the core priorities to accelerate the digital transformation of Beiersdorf's successful business model. Xue Wei said that digital transformation is manifested both internally and externally. Internally, the use of big data will enable faster decision-making. Currently, Beiersdorf has established three major centers in Shanghai, namely Innovation Center, Marketing Center, and Manufacturing Center, which is a flexible supply chain that accelerates the production efficiency and decision-making link of the whole chain making BTOC, MTOC, and CTOM all possible. On the external aspect, Beiersdorf has had many success stories of using digitalization to build brands. Through digitalization, it has helped NIVEA to increase its brand personality, transform to a younger age, and build a complete brand matrix so that it can better serve consumers. Xue Wei believes that there is still potential for the company to digitize further. For example, how to reach consumers more quickly through digital, how to have more segmented understanding of consumers, how to understand the needs of consumers in different environments of skin care, etc. Xue Wei said that in China or other regions, consumers will eventually return to the products themselves no matter what changes in the competitive environment. In terms of R&D innovation, Beiersdorf will continue to create more and better products to meet consumers' needs. This is Beiersdorf's biggest advantage in the competition and it is also the DNA of Beiersdorf. Beiersdorf pioneered modern skin care by inventing the patented "water-in-oil" technology 139 years ago. Today, Beiersdorf, the first company to conduct research on human tyrosinase, synthesized the enzyme for the first time in the laboratory to test the real effects of tyrosinase inhibitors. It spent 10 years to find the 630th active ingredient from over 50,000 whitening ingredients. The most powerful whitening and spot-reducing ingredient ever developed by the NIVEA brand of Beiersdorf Group supported by 17 patents: LUMINOUS 630. In addition, Beiersdorf's investment in R&D in China has been increasing in recent years. For example, the Group has built an innovation center in Shanghai that is second only to its headquarters in Hamburg, Germany. It aims to bring more innovative products to Chinese consumers through rigorous experimental data and the support of Germany's cutting-edge research strength. This year, Beiersdorf has reached an in-depth cooperation with Tmall New Product Innovation Center to increase the investment in R&D and consumer insights to make innovative and youthful products to meet consumers' needs for efficacy and for healthy skin. These also fully confirm that research and skincare is one of Beiersdorf's core. Thus, innovation will be another core of Beiersdorf in addition to digitalization. Moreover, green and low-carbon products are also one of Beiersdorf's next priorities. Beiersdorf will minimize the low-carbon footprint of its brands worldwide. NIVEA will be the first "climate-neutral" global skincare brand by the end of 2022. During the Expo, Beiersdorf showcased its first green, low-carbon product line, NIVEA Naturally Good Body Lotions - formulated with more than 98% natural ingredients, while effectively moisturizing skin for 48 hours to leave it smooth, nourished and healthy. At the same time, the packaging uses 50% less plastic than the original standard packaging. This packaging innovation is a major milestone in achieving Beiersdorf's global commitment to "plastic reduction". We hope this will serve as a change for the company to continue to contribute to China's "double carbon goal" in sustainability and to bring innovation closer to consumers. As for the next point of strength in the Chinese market, Xue Wei said, will focus on the creation of brand matrix. Whether it is high-end skin care brands, or functional skin care brands, there is room for breakthrough in their own category. At the same time, this year is the first year of new regulations, regulations have a positive effect on the long-term benign development of the cosmetics industry, which is also a major benefit to Beiersdorf that focuses on scientific research. As a leader in modern skin care, Beiersdorf Group will also take advantage of China's trend of opening up to all and continue to deepen and increase its presence in the world's second largest skin care market so as to bring more innovative and high-quality skin care experiences to Chinese consumers.

The company turned a corner in 2020, despite the difficulties of the pandemic, and said the beauty business has been thriving. Victoria Beckham Holdings, the owner of the fashion label and beauty company, saw a modest decline in turnover and a narrowing of losses in fiscal 2020. According to accounts filed this week at Companies House, the official register of U.K. businesses, turnover fell 6 percent to 36.1 million pounds in the 12 months to Dec. 31, 2020 while after-tax losses were nearly halved to $11,611,700 from $22,413,300. The company said strong online sales and full-year trading at Victoria Beckham Beauty helped boost overall sales as the company's overall sales declined due to the pandemic and a series of blockades around the world. The holding company has an 85 percent stake in Victoria Beckham Beauty, which delivered $9.856 million in sales in its first full year of trading, up from $2.565 million in 2019. The company said that "several successful beauty launches" this year have helped the brand become "a leader in the cleansing, luxury beauty and skincare. The beauty business of Victoria Beckham Beauty continues to launch new lines of skincare and makeup, including lipsticks collection "Posh", the company said.

National Medical Products Administration announced that imported genera-purpose cosmetics will no longer be tested on animals as of May 1, 2021.

The latest scientific research paper on E-AGSE, a new ingredient developed by CHICMAX Group, was published in Cosmetics. The article was proved for the first time that E-AGSE can promote the production of various proteins in the human body and can fight against skin aging and enhance the skin barrier. Recently, the latest scientific research results of E-AGSE (AGSE encapsulation which is "active" grape seed extract inclusions), a new ingredient developed by CHICMAX Group, were successfully published in Cosmetics. The successful publication of E-AGSE in Cosmetics not only further validates the efficacy of this ingredient in anti-aging and skin barrier repair but also demonstrates the determination of  CHICMAX Group's research team to continue to develop its own technology, ingredients and new raw materials, as well as its strong competitiveness in the international cosmetics field. Cosmetics is an open access journal on cosmetic science and technology, published quarterly online by MDPI, an internationally renowned multidisciplinary digital publisher, which provides an advanced international discussion platform for basic and applied research on skin, cosmetic formulation and ingredient research, clinical and experimental research. This journal is widely respected in the global cosmetic science and technology field. This time, the content of the paper published by CHICMAX Group is a further demonstration of the efficacy of E-AGSE, a new PP2A active ingredient developed in-house. The article demonstrates for the first time that E-AGSE can promote the production of various proteins in the human body, such as type I collagen, type III collagen, elastin and silk aggregates, which can greatly combat skin aging and enhance the skin barrier. Moreover, the article demonstrates that E-AGSE not only protects the skin from UVB-induced inflammation, but also protects the skin from UVB-induced DNA damage and reduces melanin production to help maintain a healthy skin barrier. On top of that, the ingredient even promotes the production of proteins and glycosaminoglycans at the DEJ to help tighten the epidermal-dermal junction and improve skin elasticity. Finally, the results of human clinical trials have shown that the extract containing 2% E-AGSE has excellent clinical effects. It not only significantly reduces the appearance of wrinkles, but also in brightening the skin tone, moisturizes and enhances the skin barrier, and further improves the skin condition of sensitive skin and enhances skin tolerance. At present, the research results of PP2A of CHICMAX Group have applied for 2 patents for invention and have been presented at authoritative academic conferences such as SID (Society for Investigative Dermatology) and 5th World-China Cosmetic Technology Summit held this year, which has attracted great attention from the global dermatology and cosmetic industry. Products from the new brand PP2A applied the patented ingredient E-AGSE and are officially launched. The brand is positioned as "Switch for Anti-aging" and its products specialize in age-specific skincare and targeted anti-aging.

National Medical Products Administration （NMPA） has pointed out that "stem cell cosmetics" are a pseudo-concept and it is illegal.

The consumer healthcare "SaaS+ transaction" platform, Linkedcare, has completed a Series D+ round of funding from Cowin Capital and Gan Jiawei. This is the second round of financing for LinkHealth this year. China's consumer healthcare "SaaS+ transaction" platform, Linkedcare, completed a Series D+ round of funding from Cowin Capital and Gan Jiawei. This is the second round of financing for LinkHealth this year. In June of this year, Linkedcare announced the completion of a $100 million Series D round of funding led by Investcorp followed by former shareholders of investment institution including Matrix Partners China. After this round of funding, Linkedcare will strengthen its coverage of small-town and rural markets and capabilities of service and will establish regional service teams in third and fourth tier cities in China in 2022 to significantly expand its coverage area and scale. Specifically, the company will continue to strengthen its supply chain capabilities and scale up SKUs to 30,000+. In addition to the Shanghai warehouse, additional warehouses are expected to be set up in Beijing, Guangzhou, Wuhan and Chengdu in 2022 to radiate more dental institutions. Secondly, it will further increase investment in product development and continue to improve the product strength of eDentist, eDentist Mall and Linkedcare's Yuerong Medical Beauty SaaS software. It is reported that, Linkedcare has established a deep learning algorithm team in order to strengthen the platform construction and AI research and development capabilities,. Founded in 2015, Linkedcare focuses on the consumer medical dental and aesthetic industry. It uses digital technology to promote industrial change and connect the industry upstream and downstream and ecological partners through the "SaaS+X" model: on the one hand, it provides a digital foundation for the supply chain through the SaaS model to connect people, processes, equipment and services. On the other hand, it improves the overall operational efficiency of the industry based on the supply chain and value-added service capabilities. Based on "eDentist" and "eDentist mall", Linkedcare has formed a two-wheel drive business model in the dental field. Since its establishment, the business maintained an annual growth of more than 100% and has so far reached cooperation with 400+ upstream manufacturers, providing 15,000+ SKUs, which can meet the daily procurement needs of dental medical institutions. In the aesthetic medicine industry, Linkedcare Yuerong Aesthetic Medicine SaaS increased its investment in product development and brought a 150% increase in performance compared to 2020. Linkedcare Yuerong Aesthetic Medicine become a SaaS leader in the aesthetic medicine industry. In response to China's relevant policies, Linkedcare Yuerong Aesthetic Medicine increased the development of clinical and quality control functions and supported a series of intelligent clinical system functions such as four-level electronic medical record review and electronic signature. Throughout the industry, SaaS is a key tool for the industry to solve the difficulties of operation and management. With the rapid growth of the consumer healthcare market - the existing size exceeded $94.2 billion and is growing at over 30% - many businessmen also see the opportunities in this category.

When the era of “data dividend ” is going away, how can brands, especially those in beauty industry, grasp new opportunities and embrace new challenges? Recently, Dr. Xia Chen’an, McKinsey’s Global Managing Partner and Head of High Tech and Internet Practice in China Dr. Xia Chen’an , had a conversation with Mr. Huang Tao, Chairman and General Manager of Lily&Beauty. And the following profound insights are provided by them. The annual "Double 11" Chinese Shopping Carnival officially kicked off this week. As early as late October this year, the e-commerce industry has been preparing for the exciting carnival. The "Double 11" carnival, with a history of 12 years, is a great annual event for e-commerce, and it has witnessed the rise and transformation of industry giants. It gave hopes to and facilitated the growth of many merchants and embodied unforgettable memories of a generation of consumers. When the era of “data dividend ” is going away, how can brands, especially those in beauty industry, grasp new opportunities and embrace new challenges? Recently, Dr. Xia Chen’an, McKinsey’s Global Managing Partner and Head of High Tech and Internet Practice in China Dr. Xia Chen’an , had a conversation with Mr. Huang Tao, Chairman and General Manager of Lily&Beauty. And the following profound insights are provided by them. · New channels keep emerging. Without brand equity, no answer could one get in any channel. · Identical products provide the prerequisite for everything. · Channel dividend, media dividend are sometimes a curse. When the dividend in your hand begins to fade away, you would try to maintain its scale and the profits making from it in desperation rather than concentrating on product itself. · When the market changes dramatically, a brand should not only have distinct product identity, but also possess a instant iteration mechanism. · If one side, no matter it is the supply-chain, the brand or the selling side, could make the cake bigger, then all the three sides would tend to divide the work; if no, it will be easy for them to fall into involution. This article presents the full content of the interview in text format. Part 1: Upholding long-termism in the era of revolution Xia Chen’an: From last year on, significant changes were seen in the platforms, the brands and even the whole industry. As a senior e-merchant that has been operating in the industry for many years, could you share your observation with us? Huang Tao: In general, everyone can feel that operating a business is getting harder and harder and various comments from the operators gave proofs to that. We should figure out what is the driven-force behind it. Firstly, China's demographic structure has reached an inflection point. After the generation Y and generation Z, it is estimated that there would be no drastic increase in the number of purchasers buying online. That is to say, the demographic dividend has peaked. Secondly, after years of increasing of consumers’ consuming capability, the total amount of money consumers currently spends online, or the consumption level of people, is not likely to bear any significant growth. Influenced by these two factors, some products are in consumption upgrading and some in degrading when consumers are buying them. Thus, it would trigger a shuffle in the whole online shopping market. Xia Chen’an: When such changes happen to the customers, or in other words, when the so-called “data dividend” goes away, the brands must feel anxious. what effort do you think that can help them overcome their anxiety? Huang Tao: I think the key issue is the “data dividend”. In our company, we would avoid using this word intentionally. Because the large volume of data are actually specific, livid consumers in our eyes. In the process of shopping, a consumer will do some comparison and filtration to find their desired product. Thus, a flow of data is generated. But the final destination of consumers is to find what they want. So the brands and the merchants are supposed to recommend their goods to targeted consumers. Here are two questions: Is it easy for consumers to find what they want? Will it be easier for brands to get customers if they have good merchandise? From both of these perspectives, the industry holds huge potential for improvement. Xia Chen’an: Two buzzwords emerged in the brand side these days: omni-channel and D2C (Direct to consumer). What’s your comments? Huang Tao: Since reform and opening up, our shopping channels have always been changing. For example, when I was a child, we bought things from the open markets, the supply and marketing cooperatives, or the convenient stores. Later, we got supermarkets, department stores, shopping malls and various hypermarkets. Also, people once created TV shopping, tele-shopping and mail shopping. Different new shopping channels emerge all the time. There are a great variety of merchandises: from luxury to massive consumer goods, from rigid-demand goods to nonrigid-demand ones, from active to passive consumption goods. In the field of cosmetics, there are two main sub-fields: skin caring and making up. To put it in a more detailed way, it includes categories like personal care products, perfume, and hair dyes. With so many commodities, there is bound to be a problem: some channels are suitable for sales and some are not. In fact, any time when there is a new communication way, there would be a new shopping channel. In a country like China where the Internet is particularly developed, several new forms of communication tend to appear every year. For example, more and more shopping channels would come with applications like Jinri Toutiao, Xiaohongshu, TikTok, and Kwai. In the new media environment, brands need to reconsider the following question: by which channel can they achieve a larger scale of sales with the least cost. Without taking this point into consideration, it is actually very unwise of the brands if they assure that they are certain to sell more products with one more channel. Xia Chen’an: Brands have also been thinking about this question: if a new channel is created, do I need to pre-empt it or just wait and see for a few days and then move into it when it matures? Huang Tao: It depends on the brand’s own positioning. Because the channel in turn will also affect the brand. For example, some brands may definitely not enter into what is usually considered a lower-end channel. When a brand enters a channel especially in the cosmetics industry, it is actually more important to consider selling products to different consumers through different channels. It has an impact on the brand’s self-positioning and long-term development. In our company, we also often have been asked by brands that should they enter into a certain channel or should they follow a certain format. Now there are even multiple forms of sales within a single channel. For example, there are various ways facilitating selling like live streaming, shopcasting, opening blue V membership service, or setting shopping carts in TikTok. These various forms are in the same channel but the underlying logic behind is completely different. When we observe channels, or discuss with brands about which channel and form to choose and which to avoid, we are actually supposed to come down to the brand equity itself: by carrying out certain practices in a new channel, is my brand equity increasing or decreasing. If divorced from the brand equity, talking about channels is meaningless, or, there would be no right answer. Xia Chen’an: If a brand upholds to be a long-termism especially in the beauty industry, what do you think are the most core elements? Huang Tao: The most core point is to remain reverence for the product. Our company has a three-round strict screening mechanism for products. In the first round, we will do efficacy review directly at the benchmarking products. After the review, we will discuss with one or two hundred KOLs about whether such new products will be welcomed in the market. Living through the above two rounds, we will carry out a sale test involving several thousand sellers to gain feedbacks from consumers. We attach special attention to consumer’s comments and the repurchase rates. How can you build up a brand if your item is a one-shot deal for every consumer? As a good product, it can make consumers desire to buy again and again. Only under such circumstance could a brand gain long-term development. Based on this, we focus on the product first and foremost. Providing products with actual strength is a prerequisite for everything. Another element is whether the product is urgent and irreplaceable for the consumers. Only by fully considering these two factors can we have the potential to build a brand. Xia Chen’an: From the overall channel side especially the online channel, traditional open and shelf e-commerce is still occupying a relatively large market share in the whole cosmetic industry especially in the beauty industry. But there are many new prominent channels that have emerged in recent years. What’s your opinion on the changes in the online channels in the whole beauty industry? Huang Tao: The emergence of online channels including online new media, has brought about something called channel dividend or media dividend, which would bring about a special kind of “brand” . As traditional brands or those brands with a long history respond relatively slow to new channels and new media, some other brands may hold the view that they could seize the channel dividend or media dividend to gain a round of profit through the new channel and new media ignoring their disadvantages to traditional brand in the traditional channel. But I think this format is sometimes a curse. Because every time you grab a dividend, it’s like you are holding a barbell up unsettlingly. Because when the dividend fades away, you would be exhausted in desperate attempts to maintain scales and profits which will distract you away from the research and concentration on the product itself. Because of the presence of such kind of brands, everyone many have ephemeral misjudgment when it comes to new media and new channels. Many brands could be tempted and develop such ideas: it’s more important to grasp channel dividend or media dividend or even sell products personally than focusing on the quality of products. I think that is trying to attend to trifles to the neglect of essentials. In the long run, if you are not able to resist the temptation of new media and new channels that are constantly emerging in the particular environment in China, it will be difficult for you to make good products and good brands. Part II: Produce better products and make the cake bigger Xia Chen’an: In the past few years, we have seen an obvious trend that the market share of foreign brands has been occupied by our domestic brands or “new Chinese-style products”. In your opinion, what is the driven-force behind it and will it last for a long time in the future? Huang Tao: I think the fundamental reason is that Chinese people are more confident about Chinese culture than ever before. National cultural confidence can always affect the market share of brands. In the early years, Chinese people prefer to buy foreign goods due to their distrust of domestic products. Nowadays, China is getting stronger and stronger. Youths after the 1980s, 1990s and 2000s were born in a prosperous and powerful country in which some metropolis are even more advanced than those abroad. Under such circumstance, Chinese people enjoy strong national self-confidence. Triggered by the self-confidence, people will certainly feel that foreign goods are of little advantage to domestic products, what’s more, the later can better match Chinese people’s habits. That has showed a huge opportunity for our beauty industry. But I think there is also a trap existing behind such a beautiful opportunity. Affected by this sentiment, consumers will certainly prefer to buy domestic products of some certain categories. Thus, some sellers would manage to make profits by taking short-cuts. We might have noticed that: the one who extends the fastest would actually fall in the shortest time. That is because consumers will ultimately assess the value of product itself, whether it is practical value, emotional value, or additional value. In the end, products with good quality can live longer. So we can observe some real examples: in the field of the so-called domestic products or new national products, there are some brands gaining profits by exploring and expanding new markets. But soon, they would quickly fall down due to their poor product quality, weak product identity, and low repurchase rate of products, leaving a huge blank in that market. At such points, some foreign brands with particularly strong core competitiveness will gradually fill the market. In fact, it is a pity. If more domestic brands could control their extending pace, focusing on building a better product identity while branching out, they could gradually gain more recognition and love consumers and finally make the repurchase rate of products higher and higher. In this way, I think the market share of domestic products will eventually be a bit more. In the face of the great transformation in recent years, what should the mature brands do? Could you give them some advice? Any mature brand that boasts certain scale has to make certain choices. Because the more identification functions a brand has, the less likely it is to meet all people’s appetites. But for brands with strong functional and general-priced features or even those low-end ones, they might gain massive preference because consumers’ attention for these products doesn’t lie in the identity. From consumers’ perspective, they don’t care whether you are a mature or a new brand. What they actually concern the most is the reliability and credibility of a brand. Xia Chen’an: So, a brand should never forget its original aspiration. It should improve its product identity and think about what benefit can it bring to their customers. Just uphold long-termism and keep moving on. For a brand, can there be some strategies to respond to all changes in the face of these challenges? Huang Tao: The market can be changed by following factors: better products with strong identity features created by dedicated efforts of brands, cheaper products with better performance made by companies with strong technical R&D ability, or more user-friendly products. And every time a brand doing the above affairs, they are actually trying to allow consumers a better life or attempt to give them simple choice. This is something brands always need to consider. On the other hand, an instant iteration mechanism is critical for the brand to undergo the dramatic market changes. The market is changing all the time. But if you have enough technical formulas and swift reflexes, you will never have to fuss over. How can one possess excellent reflexes? Our company has also been improving our reflexes over the past decade or so. We outsourced many non-core business segments including customer service, warehousing and logistics, and even photography and video recording. By doing so, we have allowed the entire company to focus on marketing and brand building. Thus, the company’s efficiency and reflexes have both increased dramatically. I think brands have to think about similar question: which segment should a brand attach great importance to for the improvement of its reflexes? Making sure that no matter how fast the market changes, a brand can always get ahead of peers with faster reflexes and iterations. In that case, the rapid changes in the market are acceptable. Xia Chen’an: Since e-commerce has entered into our life, a series of different branding service companies have showed up with various business models. From the perspective of branding service companies, they would reflect on what models have done well in the past and with what kind of models can they serve brands better in the future. Huang Tao: It is important to define the difference between branding service and branding operation. Generally, when we talk about service, it means I am paid to provide certain service but I am not accountable for the result. This is a so-called service company. Another type is operation company which buy goods and bear any loss or consequences. In our company, we pay for and buy the goods. Thus, the brands have already gained profits. If the products doesn’t sold well, we will take the risk, not the brand. Many people may think that a branding service company just need a few employees without any need to stock, thus, a large amount of capital is also not needed. So the company wouldn’t take any loss if they fail to sell products, which seems to be the best business in the world. But I think that this model is not good because the risk taken by two parties is not equal. Xia Chen’an: What kind of additional value can branding operations provide beyond branding services? How can we all achieve a win-win situation? Huang Tao: It depends on the number of segments of a brand. Design is actually a part of the product. The strong point of the brand companies is that they have a wealth of experience in product development and they are more capable of making a product that meets the consumers’ needs. They have a good command of the “know-how” in this aspect. Once a good product is created, we will soon figure out its targeted audience and proper price by reviewing or evaluating through big data. This is our company’s know-how. That is only one of our know-hows. Our know-how also covers the supply chain in front-end. In the supply chain of cosmetic, some ingredients can only be get from certain raw material suppliers, some processes can only be realized by certain OEMs, and some special-shaped cosmetic bottles can only be done by unique suppliers. The entire value chain of the cosmetic industry is brand-centered with the supply chain upwards and operators or channel operators downwards. Each of them plays a distinctive role. Our company believe that the brands we work with tend to enjoy particularly core strengths and they are concentrated on and driven forward by R&D. They seek to make products that no one else is able to create. In this case, they may abandon the supply chain and sales section to focus on making better products. So it turns to the three sides on the value chain again- the supply chain side, the brand side and the selling side. When one side manages to make the cake bigger, everyone tends to divide the work. If everyone thinks that there is no way to make it bigger, then it’s easy for them to fall into malign competition. Companies may strive to keep its own interests as much as they can without sharing with other sides.

Global beauty company Amore Pacific has partnered with Eastman to increase the sustainability of its plastic packaging. Since December 2021, LANEIGE is the first Amore Pacific brand to utilize packaging made from Eastman Cristal Renew co-polyester with certified recycled content based on Eastman’s molecular recycling technologies. Eastman’s molecular recycling technologies break down hard-to-recycle plastic waste into building blocks used to create new materials that are comparable to traditional materials in clarity, lustre and mechanical properties. Using molecular recycling to make these materials diverts plastic waste from landfills, incinerators and the environment. The process also reduces the use of fossil resources and results in 20%-50% lower greenhouse gas emissions than traditional manufacturing, according to Eastman. LANEIGE’s Water Sleeping Mask featuring Cristal Renew will be available at cosmetics retailer Sephora in the U.S. and Canada and at us.laneige.com.

During the transaction period, if the administrative license of five types of original special-purpose cosmetics such as hair care is expired, these cosmetics can still be produced, imported, and sold. After the transition period, these cosmetics shall not continue to be produced, imported, and sold.

Reckitt sold its skincare brand E45 to Swedish pharmaceutical company that made prescription drug Karo Pharma for $268 million. Reckitt recently announced it sold its skincare brand E45 to Swedish pharmaceutical company that made prescription drug Karo Pharma for $268 million. Officials said Reckitt has reached an agreement on the proposed sale of its E45 and related sub-brands. The brands will have total net revenues of $57 million for the fiscal year as of Dec. 31, 2020. The proposed sale, if completed, would be another step in Reckitt's plan to aggressively manage its portfolio for higher growth following the recent divestiture of its IFCN business in China and its Scholl brand as well as the acquisition of Biofreeze. The sale of E45 is expected to be completed in the second quarter of next year, subject to consultation with employee representatives in France. Karo Pharma said the debt-financed purchase, which does not include any factories, would incorporate Reckitt providing service and manufacturing support to the Swedish group for a limited period.