The Chinese beauty market became the “must-have” for global beauty companies. Recently, major global beauty groups such as L'Oreal, Estee Lauder, Unilever, P&G, Shiseido and others all unveiled their 2022 financial reports. Yesterday, Brazilian beauty giant Natura & Co also released its 2022 and fourth-quarter performance. As for now, the latest ranking of the world's top 10 beauty companies has been released. In 2022, the international economic situation is volatile and the impact of the pandemic is constant. Under this circumstance, what kind of patterns and changes are presented by the top 10 global beauty companies? What trends can be interpreted from the financial reports of these ten companies? The sales of Top 10 beauty companies over $150 billion According to the financial report released by Natura&Co, its net revenue in 2022 was $7.7 billion, down 9.5% year-on-year. Among its four major brands, only one brand Aesop made growth with net revenue of $167.6 million, while Natura&Co Latam, Avon and The Body Shop all experienced declines of varying degrees. With that revenue, this Brazilian beauty group ranked No. 9 in the list of the top 10 beauty groups in the world with Coty just second only as No. 10. It is also the only one of the world's top 10 beauty companies to be based in a non-developed country. CHAILEEDO found that in 2022, the total sales of the top 10 global beauty companies was $151.7 billion. It is estimated that the size of the Chinese cosmetics market last year was about 750 billion yuan ($109 billion), meaning that the sales of the top 10 global beauty companies last year were about 1.4 times larger than the Chinese market. In terms of rankings, L'Oréal Group remains the world's number one beauty group with sales of 38.26 billion euros ($41.2 billion). It surpassed second-placed Unilever by a wide margin of $13.3 billion. L’Oreal also achieved the strongest sales growth in the last 10 years with 18.5%. Unilever, No.2, achieved sales of 25.9 billion euro ($27.9 billion). Estee Lauder in third place achieved sales of $17.74 billion. In fourth to sixth place were P&G ($14.74 billion), Colgate ($14.25 billion) and LVMH ($8.3 billion), while the bottom four companies were Shiseido ($8 billion), Beiersdorf ($7.65 billion), Natura & Co ($6.9 billion) and Coty ($5.3 billion). In the last three years, the global top three are almost the same, with L'Oréal sitting at number one all year round and Unilever and Estée Lauder battling it out for second place. 2020 sees Unilever in second place, and 2021 sees it overtaken by Estée Lauder in third place. The rest of the companies are catching up with each other in fourth to tenth place. LVMH moves from tenth in 2020 to sixth in 2022. Shiseido, the only Asian beauty company, drops from sixth to eighth in 2021 and seventh in 2022. Natura&Co which ranked eighth in 2020 moves to seventh in 2021. Then, in 2022, it fell to ninth place. It should be noted that in the 2020 and 2021 rankings, the sales of Johnson & Johnson included its consumer health segment (including OTC pharmaceuticals and beauty and personal care). But in 2022, Johnson & Johnson split its consumer health business and also reported sales of its beauty and personal care business separately. Therefore, based on the beauty and personal care segment alone, Johnson & Johnson ranked 11th in the global beauty group in 2022, not in the top 10 list. The Coty Group, which has made a strong push in recent years in the beauty segment, especially in the high-end skincare segment, takes its place as the tenth-ranked global beauty company. Big change on reorganisation and business segments Although the Global Top 10 beauty companies have not undergone major changes for the third consecutive year, new changes are poised. In 2022 year, the giant beauty groups have also started a new round of organisational restructuring and personnel changes so far in 2022. In January 2022, Unilever announced a new organisational structure and the elimination of 1,500 management positions, reorganising its three former business units into five business divisions - Beauty & Wellness, Personal Care, Home Care, Nutrition and Ice Cream - each of which will have full responsibility for its global strategy, growth and profits. In March 2022, P&G announced the creation of a specific beauty division (Specialty Beauty), a division that includes brands such as Tula Skincare, Ouai, Farmarcy Beauty, First Aid Beauty and SK-II's North American. Estée Lauder has consolidated the company's brand portfolio into two clusters, led by two people. The one is Executive Group President Jane Hertzmark Hudis, who leads the skin care and hair care brands. The other one is Stéphane de La Faverie, who has played a key role in Estée Lauder's fragrance portfolio and leads the collection of brands that brings together all of the group's Perfume brands. L'Oréal has also opened a new fragrance division in its L’Oreal Luxe including six "single-axis fragrance brands" (brands in the perfume category only) such as Maison Margiela, Atelier Cologne, Viktor&Rolf, Azzaro, Diesel and Cacharel. Unlike the above-mentioned companies, which made minor adjustments according to business type and brand category, Shiseido has reorganised and restructured its entire organisational structure at three levels: research and development, supply network and global brand units, abolishing six old departments and creating seven new ones. Meanwhile, several beauty companies experienced new personnel management. For example, Natura & Co, Johnson & Johnson, Shiseido and Unilever have changed their global hands, while key regions and departments such as Shiseido China, LVMH North Asia, Sephora, Estee Lauder Korea, Unilever China and LVMH Beauty have also ushered in new heads. It is predictable that as the new structures and leaders start to take effect, the head beauty companies and the global beauty landscape will also see new changes. Fragrance, hair care, skin science is the new growth In terms of performance, among the Top 10 of global beauty companies, Estee Lauder, P&G and Natura&Co all saw declines in 2022, while L'Oreal, Unilever, LVMH and Beiersdorf all achieved double-digit growth. In their financial report of the Top 10 of global beauty companies, CHAILEEDO found that fragrance, hair care and skin science are the keywords for growth for these companies in 2022. Firstly, the potential of the perfume and fragrance segment in the post-pandemic era is huge. The competition for "fragrance" was also getting intense among the major groups. In L'Oréal Luxe division, the fastest-growing category was fragrance. Estée Lauder Group saw net sales growth in every region and every fragrance brand in the FY2022. Shiseido Group has also achieved 12% growth in fragrance. LVMH's fragrance business is growing strongly, with Dior, Guerlain and Givenchy growing their fragrance ranges. Secondly, in 2022, the hair care category also showed growth potential that cannot be underestimated. L’Oreal Professional Products division achieved 18.3% growth in 2022 with results-driven mainly by KÉRASTASE. The sales of KÉRASTASE surpassed one-billion-euro mark for the first time last year. In Q2 FY2023 (October-December 2022), when Estée Lauder's results plummeted, its hair care division was the Group's only segment to grow. In Q1 FY2023 (June-September 2022), Estée Lauder also achieved double-digit organic net sales growth in both fragrance and hair care products. In 2022, Unilever also completed the acquisition of Nutrafol, a leading supplier of hair care products, further increasing its presence in the hair care market. It is worth noting that the pandemic has influenced consumer habits and behaviour and people had increasing concerns about health and safety. It pushed the growth related to skin science. L'Oréal's Active Cosmetics division, which emphasizes product safety, efficacy and doctor's recommendations, has led the four divisions for two consecutive years with growth rates of over 30% and achieved double-digit growth in all regions in 2022. The division includes LA ROCHE-POSAY, VICHY, CeraVe, Decleor, SkinCeuticals and the newly acquired premium medical skincare brand SkinbetterScience. At the same time, Beiersdorf, which posted its best results in decades in 2022, also got a taste of the skin science business. In 2022, its Derma division achieved 23.9% organic sales growth where Eucerin and Aquaphor are in, resulting in a strong acceleration of growth in all categories and regions. Vincent Warnery, CEO of Beiersdorf, said that with Eucerin and Aquaphor, Derma segment business has also achieved an important milestone with nominal sales revenues exceeding €1 billion for the first time, three years ahead of its plan. It is worth mentioning that recently, Myriam Cohen-Welgryn, Global President of L'Oreal Active Cosmetics, said that the former L'Oreal Active Cosmetics was officially renamed L'Oreal Dermatological Beauty. Myriam Cohen-Welgryn said: "Did you know that over 2 billion people have skin issues today? That this number just keeps growing as the world population is aging. Or just because more and more people are exposed to pollution or to stress! In parallel, with the selfes boom and the shift to video calls, the way we look is more important than ever: people increasingly turn to medical professionals to meet their quest for health and beauty. This is why L'Oreal Active Cosmetics has become L’Oreal Dermatological Beauty." This may mean that L'Oréal focused more on skin health care and medical aesthetics. When will Chinese companies be on the list? In 2022, we witnessed a downturn in China, which dragged down the results of the major beauty groups. But it represents how significant the Chinese market is to the world's top beauty companies. Despite the decline in sales in 2022, China has become the largest market for the Shiseido Group. The market share of L’Oreal North Asia, where China is located, was already comparable to that of Europe. As a result, the beauty giants are still bullish on China and are accelerating their localisation in the country. In 2022, L'Oréal China and Shiseido China set up investment companies such as Shanghai Meicifang Investment Company and Ziyue Fund in China. Their first investments are Chinese fragrance brand DOCUMENTS and recombinant collagen company Trautec respectively, targeting local emerging brands and upstream technology-based companies in China. In addition to investment, beauty giants are also promoting localisation of their supply chains in China. 2022 saw P&G invest in a live e-commerce innovation centre and a P&G International Trade Supply Chain Control Centre. Unilever's first full-category production and marketing base project in Guangzhou. L'Oreal's first global self-built intelligent operations centre laying the foundation in Suzhou and the 100,000-grade cleanroom at its Suzhou Shangmei factory going into operation. Estée Lauder's China Innovation and Research Centre is officially opened in Shanghai. This series of actions reflect that the beauty giants not only see the consumer potential of the Chinese market, but are also deeply involved in the transformation of the Chinese beauty industry in terms of talent, supply chain and R&D innovation. They are becoming increasingly involved with the Chinese market. Yesterday (March 14), Shanghai Jahwa, China's leading cosmetics company, released its 2022 results, reporting revenue of 7.1 billion yuan ($1 billion) for the period, down 7.06% year-on-year. Coty, the world's 10th largest beauty company, reported sales of $5.3 billion last year, more than five times that of Shanghai Jahwa. China's local cosmetic companies still can not reach the top 10 beauty companies. However, China is really important for global beauty companies. The Chinese beauty market, which became the source of innovation for the global beauty industry, are influencing the competition in cosmetic worldwide. Note 1: The Global Beauty Top 10 sales figures are subject to exchange rate fluctuations and will be in USD as the primary currency for comparison purposes. Note 2: The data in this article is derived from the financial reports of the companies. L'Oréal, Estée Lauder, Shiseido and Natura & Co are the overall businesses. Unilever and P&G are beauty and personal care businesses. Colgate is the oral, personal and home care products division. Beiersdorf is the consumer business. LVMH is the fragrance and cosmetics business. Note 3: Estee Lauder, P&G and Coty statistics are based on fiscal years, not natural years. The rest of the companies are based on the natural year.

The total retail sales of cosmetics achieved the first positive growth from January to February this year since the decline in August 2022. Today, the National Bureau of Statistics announced the retail sales data of consumer goods from January to February in 2023 was 7.7 trillion yuan ($1.11 trillion), up 3.5% year-on-year. In terms of cosmetics-related data, the total retail sales of the cosmetics category from January to February 2023 was 65.6 billion yuan ($9.5 billion), up 3.8% year-on-year. Since the ease of the prevention and control of the pandemic, total retail sales in the cosmetics category have rebounded significantly, achieving the first positive growth since the decline in August 2022. In a vertical comparison, although the cosmetics category achieved positive year-on-year growth of 3.8% from January to February this year, it still showed a decline compared to the average figure for the same period in previous years. Especially since reaching a peak of 40.7% in 2021, it began to show a precipitous decline. This shows that the competitive pressure on the cosmetics market is still not to be underestimated. In terms of customs data, China imported 51,441 tonnes of beauty cosmetics and toiletries from January to February, down 16.4% compared to the same period last year. The import value was 20.7 billion yuan ($3 billion), down 5.1% year-on-year. The National Bureau of Statistics said that the prevention and control of the pandemic turned faster and more stable from January to February this year. The economic cycle accelerated smoothly, production demand improved significantly, leading the economic operation to stabilize and rebounded. However, the external environment is more complex and the lack of demand is still more prominent. So the economic rebound foundation is not solid yet.

Shanghai Jahwa said that the complex Chinese economic situation and endless emergencies were the main reasons for the decline in performance. On the afternoon of March 14, Shanghai Jiahwa released the announcement of the 2022 annual performance express. During the reporting period, the Company achieved operating income of 7.1 billion yuan ($1.03 billion), a year-on-year decrease of 7.06%. Shanghai Jahwa is one of the daily chemical groups with the most extended history in China. Its products cover the three major fields of beauty makeup, personal care and household cleaning, and mother and baby products. It has always been in the leading position in China's beauty makeup. According to the announcement of the 2022 annual performance bulletin, the main reason for the decrease in operating income this time is the complicated economic situation in China and the endless emergencies. In the second quarter of 2022, factories and logistics bases will be shut down. In the second half of 2021, the special channel business adjustment brought about by the major shareholder reform will begin. The lack of e-commerce sales was brought about by the suspension of super anchor partners at the end of 2021. These three things all had a negative impact on company sales. The downward trend of the performance of Shanghai Jahwa has been revealed before. Shortly after the 2022 semi-annual report was released, Shanghai Jahwa lowered its full-year performance target for 2022, lowering its annual revenue from 8.4 billion yuan ($1.21 billion) to 7.5 billion yuan ($1.08 billion). According to the third quarterly report of Shanghai Jahwa in October last year, the company's operating income in the first three quarters was 5.35 billion yuan ($776.8 million), a year-on-year decrease of 8.17%. The performance situation is not satisfactory. In response to the downward trend in performance, Shanghai Jahwa has put forward countermeasures in two directions: brand innovation and distribution channels. From the perspective of brand innovation, Shanghai Jahwa will continue to promote high-end, younger and more specialized products. For example, Herborist in the beauty category has successfully reshaped its brand positioning. Liushen in the personal care category promotes rejuvenation, high-end and all-seasonalization and has achieved initial results. In terms of product marketing, Shanghai Jahwa continues to strengthen its core brand building and accumulate experience. In terms of channels, Shanghai Jahwa's online channels have achieved stable cooperation with multiple platforms and influencers, reducing the business risk of a single platform. Special channels continue to promote retailization, and by the end of 2022, monthly sales have begun to achieve positive year-on-year growth. At the same time, the smart retail of offline channels continued to transform, and the proportion of new retail businesses continued to increase. Shanghai Jahwa also said that in the fields of culture, system and process, and digitalization, the company has made various efforts, hoping that these basic tasks can promote the continuous optimization and improvement of the overall business.

Through AI technology, Perfect Corp. can make it easier and more fun for women to learn about beauty, said the founder and CEO of Perfect Corp. On March 13, Perfect Corp., a leading provider of augmented reality (AR) and artificial intelligence (AI) beauty and fashion technology solutions, recently upgraded the functionality and interface of its virtual makeup trial WeChat mini program, significantly improving the makeup application effect and the perception of using the mini program, as well as improving the overall fluidity of the program. In addition, Perfect Corp. launched the "Perfect Corp. Makeup Virtual Makeup Trial" WeChat app, which supports all makeup categories such as lipstick, eye shadow, eyeliner, eyelashes, blush and foundation. It has now expanded its services to include real-time makeup tutorial services. Founded in 2015, Perfect Corp., which went public on NASDAQ on 31 October EST, is a provider of artificial intelligence (AI) and augmented reality (AR) beauty and fashion technology business solutions. Among the top 20 beauty groups in the world, 17 beauty groups, including L'Oreal and Estee Lauder, use Perfect Corp.'s services. According to the prospectus, Perfect Corp. achieved revenue of approximately 300 million yuan ($43.6 million) in 2021 and the company is valued at approximately 7.4 billion yuan ($1.1 billion). Perfect Corp. aims to help brands enhance their existing businesses, provide consumers with a convenient real-time virtual trial shopping experience and help brands successfully increase their conversion rates. Its investors include Alibaba, Shiseido and Chanel. They are also Perfect Corp.'s partners. "We are delighted to be able to offer virtual beauty tutorials to consumers through Perfect Corp. Teaching. It will help more women solve their pain points in the process of learning beauty. The ever-innovative Perfect Corp. Tutorial service will definitely bring consumers a different kind of beauty experience and fun interaction. Meanwhile, it will also help more beauty brands to progress and develop on the road of digital transformation," said Zhang Huazhen, Founder and CEO of Perfect Corp. This solution not only creates an immersive and interactive consumer experience for the majority of consumers, but also allows them to further understand product information through makeup tutorials. In this way, it can provide an intuitive reference for purchase, thus helping brands to increase interactive stickiness through a more flexible and interactive marketing approach. Through Perfect Corp., a more colorful shopping experience can be created for brands' private domain customers.

Symrise forecasts that the Group's CAGR will reach 5% to 7%, higher than the 3% to 4% growth rate of the relevant market. On March 8, the 2022 financial results of the flavour and fragrance ingredients giant Symrise were released. In the financial year 2022, Symrise sales were €4.618 billion ($4.9 billion), up 20.7% year-on-year and organic growth of 11.4%, significantly stronger than expected. Its net income was €406.1 million ($428.6 million), up 8.3% year-on-year. Its gross profit was €1.7021 million ($1.8 million), up 15.1% year-on-year. Commenting on the results achieved this year, Symrise said in its earnings report that despite the difficult international political and economic situation, Symrise followed through on its strategy for the financial year 2022. Meanwhile, the Group was less affected by the disruptions in supply chains and shortages in the procurement markets due to coronavirus pandemic as well as the war in Ukraine. However, the persistently high level of inflation has in some cases led to significant cost increases for Symrise, which have been largely offset by Symrise's price increase strategy. Dr. Heinz-Jürgen Bertram, CEO of Symrise AG: "2022 was a very successful fiscal year for Symrise once again. We continued to grow profitably He said "Our outlook for 2023 is correspondingly optimistic. We believe that we will continue to grow and create sustainable value in the current year." In terms of segment, sales for the Scent&Care segment in fiscal 2022 were €1.706 billion ($1.8 billion), up 14.4% on last year, with strong growth driven by strong demand for Fine Fragrances and cosmetic ingredients. The acquisition of the fragrance and aroma chemicals business of Sensient Technologies and the acquisitions of Néroli and Romani contributed a total of approximately €55 million ($58 million) to the division's sales. EBITDA for Scent & Care was 3.0% higher than the previous year, at €291 million ($307 million) in 2022 (2021: €283 million). The Scent & Care segment comprises three subdivisions: Fragrances, Cosmetic Ingredients and Aroma Molecules. Specifically, the Fragrances division recorded solid organic growth in the single-digit range. The growth benefited from strong demand in the Fine Fragrances business, which achieved double-digit organic growth, said Symrise. The growth rates were particularly pronounced in Latin America and EMEA. Sales in the Aroma Molecules division declined slightly, with weaker-than-expected customer demand for fragrances contributing to the organic decline in sales. The menthol business, however, achieved single-digit organic growth, particularly in North America. The cosmetic ingredients division continued its strong performance and benefited from the strong demand for high-quality cosmetics. All business units and regions contributed to the business development. In particular, strong demand for sun protection products and products containing active cosmetic ingredients led to high organic growth of double-digit percentages. By region, Symrise's Latin American business recorded €595 million ($628 million), the highest year-on-year growth of 24.7 percent. Its sales in Asia Pacific region were €981 million ($1.035 billion), up 10.4 percent and in Europe-Africa-Middle East was €1.716 billion ($1.8 billion), up 9.4 percent, and North America was €1.326 billion ($1.4 billion), an increase of 8%. As one of the earliest fragrance giants to enter the Chinese market, Symrise, which entered the market in 1982, has several branches in China and attaches great importance to the Group's development in the region. On January 10, 2023, the group opened the official Symrise China Innovation Lab in Pudong, Shanghai. On March 7, 2023, the opening of the Nantong plant of Symrise Cosmetic Ingredients Division launched. Achim Daub, Global President of Symrise Daily Fragrances and Cosmetic Ingredients, publicly stated in 2018 that "10 years ago, China was Symrise's fifth largest market (specifically in the fragrance and care segment), and today it has jumped to become Symrise's third largest market in the world." Following the release of the 2022 financial results, Symrise forecasted the future direction of the Group and reiterated its long-term growth and profitability targets. According to IAL Consulting, the relevant markets are forecast to grow globally by around 3% to 4% in the long term. Symrise forecasts that the Group is confident that it will continue to grow at a faster rate than the relevant markets and will grow by 5% to 7% CAGR in 2023, generating sales of €5.5 billion ($5.8 billion) to €6 billion ($6.3 billion) by the end of 2025. At the same time, Symrise said in its earnings report that the Group will continue its strategy of price increases to further increase revenues and ensure its profitability by keeping a tight rein on costs. It will focus on higher-margin businesses, and reducing process and workflow complexity. It also will be contributed to developing innovative and sustainable products and technologies.

According to incomplete statistics from CHAILEEDO, a total of 16 new sunscreen products were launched in February 2023. In recent years, consumer awareness of sun protection has generally increased. The sales of sun protection products have been climbing year by year. CHAILEEDO data show that since 2017, the overall market size of sun protection has been increasing year by year, with an annual growth rate of more than 5%, and the market size reached 9.3 billion yuan ($1.3 billion) in 2022. However, hit by the epidemic, the launch of new products and marketing moves from the brand appeared conservative last year, with sales of sunscreen, which accounts for 97% of the sunscreen market on the Ali-related platforms, down 12% year-on-year in 2022. During the summer of last year, which was the time that should have been the peak season for sunscreen sales, sales of sunscreen products on Ali-related platforms fell, from 1.8 billion yuan ($260.8 million) in June to 400 million yuan ($58 million) in September. Unlike last year's sunscreen market, since February this year, major brands have piled up to launch new products. According to CHAILEEDO incomplete statistics, a total of 16 sunscreen new products were launched in February, which is mainly sunscreen emulsion and sunproof cream. The sunscreen spray was relatively few. Specifically, these new sunscreen products reflect the following major trends. First, "more than sunscreen+", that is, sunscreen with skincare. The 2022 Sunscreen Trends White Paper released by Tmall Beauty has pointed out that the search UV growth rate for sunscreen efficacy needs such as "skin care", "blemish" and "anti-aging" reached 33.88%. This trend is also evident in the new sunscreen products recently launched by brands. More than six products claim to add skin-nourishing ingredients, CPB new sunscreen products was added skin-nourishing ingredients, which enjoyed ratio increased to 50%. SEKKISEI claimed that the new sunscreen contains up to 70% of beauty essence. Second, the innovative use of new technology has become a new trend. It is understood that the new sunscreen launched by Shiseido claims to be able to transform harmful light into useful light. New sunscreen from CPB focused on beauty-light technology. Estee Lauder's new sunscreen claims to have the efficacy of anti-sun, anti-oxidant, anti-light. Thirdly, the sun protection needs of people with sensitive skin are also receiving increasing attention. Last year, sales of Winona sunscreen, the leading brand for sensitive skin, increased by 82.8% year-on-year. In the same year, Dr. Yu launched the brand's first sunscreen for people with sensitive skin. Fourthly, the price of sunscreen products from local Chinese brands is also showing an increasing trend. The price of new sunscreens from MIHOO and SHELOG both exceeded 100 yuan ($14.5)/50ml, while PROYA's new product surpassed the 200 yuan/50ml, nearly double the pricing of another sunscreen from the brand. CHAILEEDO interviewed the person in charge of LA ROCHE-POSAY, who said that sun protection products are gradually becoming a growth point in the cosmetics market. "People are quite conscious of protecting their skin health while enjoying the heat of the sun, and sun protection has become an essential skincare step for outdoor enthusiasts." "Since the fourth quarter of last year, sunscreen market figures have seen a rapid rebound and are maintaining an upward trend, with market conditions gradually improving." In Shi Ling's view, "This year's culture and travel economy has ushered in the New Year and coincides with the approach of the spring and summer festivals, and the demand for sun protection products will increase accordingly. We believe this is good news for both the general market environment and the sunscreen market." Overall, the sunscreen market is characterized by diversified efficacy, segmentation of the population and high prices for local brands, which can also be seen from the brands' coincidental launch of new products, ushering in new opportunities in the sunscreen market this year.

The second phase of the additional investment project at Symrise Flavor & Fragrances (Nantong) Co., Ltd was recently opened and put into operation. Just a day earlier, BASF announced that it had invested in a new citral plant at its integrated site in Zhanjiang, China. International cosmetic ingredients giants are increasing their presence in China and accelerating local production. It is understood that Symrise has already set up two plants in China. The one is in Pudong, Shanghai and the other is in Nantong, Jiangsu, for the production of cosmetic flavours, food flavours and fragrances. The project opened for production is the second phase of the Nantong plant, which means that the second phase adds production units to the original Nantong plant. According to Lao Shuquan, Director of Symrise's cosmetic ingredients department in China, the second phase of the Nantong plant has an investment of approximately 50 million yuan ($7.2 million), covers an area of 3,700 square metres and has an annual production capacity of 6,000 tonnes. The Nantong plant is currently capable of producing functional ingredients, botanical actives and other ingredients. The plant aims to meet the domestic supply of efficacious ingredients in China and address the strong demand in the local market. It is also an important step in Symrise's vertical integration of the supply chain to enhance its competitiveness. Regarding its next development plan in China, Symrise said it would continue to increase its presence in the Chinese market and provide more support to local brands and customers. It would also provide more comprehensive and precise services to brands. At the same time, it would use its role as a driving force to improve industry regulations and lead the development of higher quality and standardised cosmetic ingredients. The day before the opening of Symrise's Nantong plant, BASF announced that it had invested in a new citral plant at its integrated site in Zhanjiang, China. Upon completion of the investment in the citral plant at the Zhanjiang site in China, BASF's annual production capacity for citral will increase to 118,000 tonnes. BASF is also known to have established a plant in Jinshan, Shanghai and the integration site in Nanjing in 2017 and 2000 respectively. One of the plant in Jinshan, Shanghai is dedicated to the production of oils and waxes for skin care, hair care, sun care and other products. Another ingredient giant, Swiss flavour and fragrance giant Givaudan, has also long established its world's largest plant in Changzhou, Jiangsu Province, China, which was officially opened in October 2020 with an annual production capacity of 38,000 tonnes of flavours and fragrances. The plant will produce a wide range of products such as daily flavours, dental flavours and microencapsulated flavours to serve customers in China and the Asia Pacific region. These ingredients giants making great moves in China show that there is a trend for them to increase their presence in China and localize their production. As one industry source said: "The main reason for the ingredient giants to increase their local production in China is that this market will become the world's leading beauty market. In the future, I believe the ingredient giants will pay more and more attention to the Chinese market and do better services."

COSMAX has recently announced the launch of its customized cosmetics platform "3WAAU". COSMAX said that the cosmetic market has recently developed into an era of ultra-personal customisation, and the 3WAAU platform, which was launched, uses a 1-to-1 targeted questionnaire to recommend the precise choice of 12.6 million formula combinations to suit the needs of the customisers. Currently, 3WAAU has launched shampoo, conditioner and other care products that can be tailored to the needs of dandruff, keratin, hair loss and other care needs, realising a daily customisation service of "1 order, production + delivery within 24 hours". After using the first product, consumers can also adjust the ingredients and "upgrade" the product by sending a simple feedback. COSMAX representative LEE BYUNG MAN said, "3WAAU is the result of the convergence of the customised market and digital transformation. 3WAAU will improve customer-to-customer understanding and provide better service through various experiments." In addition, COSMAX is planning to expand the customisation of 3WAAU to include skincare products and health foods, and to roll out its use in overseas markets. In March 2021, COSMAX OBM launched Brand Bank, which provided brand planning, formulation proposals, design and package development services. It deployed the customised products of COSMAX. In May 2022, it launched a series of "Free Private Customisation" services, offering consumers a free customised formulation experience. In July 2022, COSMAX Chairman said in a public interview that the customized cosmetics market would become the next windfall. CHAILEEDO found that major beauty groups have successively deployed customized cosmetics. For example, L'Oreal Group has launched the YSL SCENT-SATION. Henkel has launched the first B2B2C ultra-personalised professional hair care brand SalonLab&Me. CUSTOM.ME launched the customised cosmetics brand of Amore Pacific. It launched a new essence, which allows consumers to analyse their skin condition through AI technology and then choose a formula that suits their needs in combination with their lifestyle.

The world's four largest fragrance and perfume companies, Firmenich, Givaudan, IFF and Symrise, are recently under antitrust investigation by several official authorities. According to Financial Times, Swiss companies Firmenich and Givaudan, Germany's Symrise and US group International Flavors & Fragrances together control around 60% of the relevant market share. The four major flavour companies are being investigated for allegedly colluding with antitrust authorities in Switzerland, the UK, the US and the EU. Three of the four companies, including Symrise, Firmnich and IFF, have said they will cooperate fully with the investigation. On Wednesday, the Swiss Competition Commission (Comco) carried out fly-overs of the companies at various locations after consultation with the European Commission, the US Department of Justice Antitrust Division and the UK Competition and Markets Authority. “There are suspicions that [the companies] have co-ordinated their pricing policy, prohibited their competitors from supplying certain customers and limited the production of certain fragrances,” Swiss competition regulator Comco said on Wednesday. It added that some indications showed several undertakings active in the production of fragrances have violated cartel law.(A cartel is an organization created between a group of producers of a good or service to regulate supply and manipulate prices.) According to Cosmetics Business, Comco said “Dawn raids started on Tuesday 7 March 2023. At the sites of Firmenich and Givaudan in Geneva we were looking for evidence which might confirm our suspicions for collusion in the fragrance market.” Meanwhile, the European Commission also announced on Wednesday that it had conducted raids on companies involved in the perfume industry and an association in several member states to identify whether there was collusion in relation to the supply of flavours and fragrance ingredients, without disclosing the specific companies. Under EU regulations, companies involved in illegal cartel law are subject to fines of up to 10% of their global turnover. It is worth noting that on 31 May 2022, Firmenich and DSM announced a merger that will bring together a new company, DSM-Firmenich, with total revenues of $3.3 million for the combined fragrance and beauty division. The combined fragrance and beauty division will be a leader among fragrance ingredient companies, the sources said.

Fueguia 1833 is a niche fragrance brand that was founded in 2010. The brand is committed to using natural and vegan ingredients in all of its products, from the research of natural botanical ingredients to the creation of formulation, manufacturing, and artisanal packaging. Since its inception, the company has used only specific natural ingredients as raw materials for its fragrances, all of its formulations use 100% biodegradable ingredients. Julian Bedel, the founder of Fueguia 1833, is persistent in exploring the diversity of plants nature has to offer, with a particular interest in plants from South America. In an exclusive interview with CHAILEEDO, he said that he firmly believes in the "power of natural plants and power of natural ingredients." Fueguia 1833 has developed quite rapidly, and its sales in 2019 exceeded 2 million euros. In 2021, Fueguia 1833 obtained equity investment from the Middle East investor Ilwaddi WLL and actively expanded the local market. How did Fueguia1833 differentiate itself from other perfume brands and gain favor from the capital? CHAILEEDO invited Julian Bedel, to share his experience in brand building and his views on fragrance. An Artist's Journey in Crafting Unique Fragrances “I come from a family of artists, my father and brother that they are painters, and sculptors.” Growing up in his father's studio, Bedel was surrounded by a variety of raw materials such as wood and paint. He gained a lot of inspiration from his life experiences and pursued his passion for the arts. He began his creative journey by crafting guitars and playing music and later ventured into painting and sculpture. When his father sent him a Nobel Prize-winning thesis that inspired the artist, it marked a turning point. “It was about two American physicians, Linda Buck and Richard Axel, who decoded the genome of the olfactory bulb.“ Bedel remembers. The scientific explanation of the effects of volatile molecules on people's sense of smell is presented in this paper. When he read this article, he found “chemical signals that can be understood by people, animals and plants as scent. It’s a universal language.” The artist started to experiment with the method of gathering and blending fragrances, which led to the creation of Fueguia 1833. “Westerns use scent as a decoration, but I think fragrance can bring people mystical experience. It provides something that I think medicine cannot provide in a way.” Bedel posits that fragrances have the power to elicit memories from the past and evoke emotional connections. “Scent is something extremely powerful.” Power comes from natural plants What is the most important element of creating a good fragrance? Bedel thinks the answer to this question is “the magical combination between the formulation and ingredient". "A good painter needs only charcoal and water to create a work of art with a clear subject. But in the case of scent, you need the power of plants," says Bedel. Fueguia1833's products “are different because of the ingredients, extraction, maceration, production methods, formulation and concepts”, but everything is organically combined. Bedel participates in every stage of the fragrance creation process, from the initial concept of the fragrance, botanical research, and formulation to the final design of the packaging. “Our perfumes started as vegan perfumes, so perfumes don't use animal-origin ingredients. In order to substitute animal original ingredients, we use some synthetics. But I do believe 100 % that to achieve our mission, we need the power of scent. the only way is through plants and the careful selection of the active molecules that create this well-being in that.” Bedel told CHAILEEDO. Because of the availability of ingredients, all of Fueguia 1833’s perfumes are produced in limited quantities of up to 400 bottles per fragrance. Different cultures, different consumers In the past 2022, Fueguia1833 released a limited edition unisex fragrance Land of Champions, which aims to pay tribute to the countries that have won the championship. The ingredients come from the World Cup champion countries Brazil, Uruguay, Argentina, Britain, Spain, France, Italy and Germany. “Argentina is one of the eight winning teams in the World Cup, and we have a deep connection with football. Fortunately, we won the championship this year. This World Cup was held in Qatar. I am very grateful to them for organizing this event, so I hope to create some special souvenirs for guests and their guests.” The perfume is limited to 2022 bottles worldwide, and the price of 100ml is 350 euros. Additionally, Bedel says that although perfume had not been prepared for the 2026 World Cup, it was already in the process of being conceived. Fueguia 1833 has opened physical stores in Milan, New York, Tokyo, London, Buenos Aires, and Maldonado, which has allowed Bedel to receive feedback from consumers belonging to different cultural backgrounds. “Thanks to God, he is quite uniform in a way. Humans have similar preferences, as seen in the fact that both Argentines and Chinese love the scent of jasmine.” Bedel also analysis that different cultures will also affect consumers' preference for fragrance selection. He found that Japanese consumers don't like strong scents that overwhelm other people, so they choose lighter fragrances. From the perspective of brand development, Fueguia 1833 will focus on South America this year. "Learning from our existing stores and open little by little. We were a slow company.” Bedel says at the end of the interview. “I just enjoy expanding and being an artist within a new territory and doing it with a lot of humility like doing it very naturally and organically.”

Jing Cheng has worked at Estee Lauder for over 17 years, holding positions such as Vice President of Research and Development at APAC. For recruiting Jing Cheng, it shows that Yatsen will continue to invest in research and development. Jing Cheng, formerly Vice President of Research and Development for Estee Lauder Asia Pacific, has been appointed as Yatsen’s Chief Scientific Officer, effective March 8, 2023, according to the disclosure yesterday by Perfect Diary's parent company, Yatsen. According to Yatsen, Jing Cheng holds a bachelor's degree in polymer science from Shanghai Jiaotong University and a master's degree in fine chemistry from East China University of Science and Technology. In 2009, she completed the Fudan University EMBA program jointly organized by Washington University in St. Louis and Fudan University. Since then, she has worked in the cosmetics R&D industry for 25 years and has extensive R&D experience in headquartered international beauty groups: from July 2000 to July 2001 at Henkel, and from July 2001 to January 2005 at Revlon, where she led R&D quality control in China. Since then she has worked for Estee Lauder for over 17 years and has held various senior management and research positions at Estee Lauder since July 2014, including Vice President of R&D at APAC. Previously, the products under Yatsen have been criticized by consumers for being of too poor quality. After its going listed in November 2020, its R&D expense ratio was approximately 2% by quarter, which is mid-range in the industry. However, throughout 2022, the company's annual R&D investment accumulated 130 million yuan ($18.7 million) in 2022, and its R&D expense ratio continued to rise from 2.4% in 2021 to 3.4% in 2022, continuing to rank in the top tier of global R&D investment levels. Yatsen has publicly stated many times that it regards R&D as the underlying foundation to support the development of the enterprise and will continuously increase its investment to ensure continuous product innovation. It is worth mentioning that in 2021, Yatsen signed a strategic cooperation with three top domestic and international research institutions and upstream and downstream partners at the China International Import Expo in Shanghai, namely Shanghai Ruijin Hospital, COSMAX and Intercos. In 2022, Yatsen signed a joint laboratory cooperation agreement with Sun Yat-sen University, and both parties will continue to carry out in-depth cooperation in the field of precision skincare. Earlier, Yatsen and the National Nanomedicine Engineering and Technology Research Centre had already entered into strategic cooperation, with the two parties forming a joint laboratory to jointly develop and land a number of ingredients, such as Shuaminxiu H, Shuaminxiu L, salicylic acid nano-encapsulated microcapsules and other exclusive ingredients, to apply cutting-edge technological innovations to products for consumers' different skin needs. Yatsen remains rationally optimistic about its performance outlook for 2023. Huang Jinfeng, Founder, Chairman and CEO of Yatsen, said, "In 2022, the company's strategic transformation has begun to bear fruit, and by establishing a business model for high-quality development and a firm layout. We have significantly improved our risk resilience. Looking ahead to 2023, we will continue to invest more in our brand equity and R&D strength to solidify our two core competencies and focus on the sustainable and healthy growth of our multi-brand matrix."

Recently, Japanese makeup group POLA announced that it would close its high-end brands' Amplitude and ITRIM. On March 6, the official website of POLA ORBIS HOLDINGS issued an announcement, saying that due to the severe business environment and lower-than-expected performance, the company decided to shut down two cosmetic brands, Amplitude and ITRIM, and gradually close stores and end online sales. It is expected to be completed by the end of 2023. "Although we have implemented various growth measures, we judge that it will be difficult to find any advantages in continuing to conduct business in the future." POLA Group said in the announcement. In the Japanese beauty market, POLA Group is one of Japan's four largest cosmetics groups, along with Shiseido, Kao and Kose. During its peak period, it also competed with Kose Group for the position of the third-largest cosmetics group in Japan. However, in recent years, POLA Group has gradually fallen into the bottleneck of performance growth, and began to fall behind. According to public data, during the six years from 2017 to 2022, the net sales and revenue of POLA Group only achieved a small year-on-year growth in 2018 and 2021, and the net sales and revenue in the remaining fiscal years declined to varying degrees. At the same time, the group's operating profit margin is declining, and the operating profit margin in 2022 is less than half of that in 2017. Considering that the impact of the epidemic in 2020 will be obvious, the Group's net sales, revenue and operating profit margin will decline significantly. These data show that POLA Group has been going downhill since 2018. According to public information, Amplitude and ITRIM are two high-end beauty brands launched by POLA Group in September 2018, mainly developed in Japanese department stores. CHAILEEDO noticed that these two brands have entered the SKP multi-brand beauty store in Beijing, and have also opened overseas flagship stores on Chinese e-commerce platforms. At present, Amplitude's Tmall overseas flagship store has been closed. The overseas flagship stores of the ITRIM brand on Tmall Global, JD International and Xiaohongshu are still operating normally.