Both Chinese brands Zhiben and Kimtrue said that the other brand/organization used false reviews to discredit their products in order to engage in unfair competition. On the afternoon of January 28th (China Standard Time), Chinese brand Zhiben released a statement on its official Xiaohongshu account, saying that it recently found some users on the Xiaohongshu platform posting false reviews and defaming the brand's products, which seriously infringed on its brand goodwill.

Under the stable development of the beauty market, product efficacy and brand quality are important considerations for beauty and skin care product consumers. A year's plan starts with spring, and the industry changes at a fast clip. What new trends will emerge in 2023? Where do the new growth points lie in the market? Based on the upcoming 6th Chinese Cosmetics Trend Conference on February 13, CHAILEEDO interviews the founders and industry personages of 50 + well-known companies at home and abroad to get the cosmetics industry off to a flying start with a fresh view. CHAILEEDO invited Huang Xiaodong, the president of the Mask Family 1908, to share with us the cosmetic trends in China. CHAILEEDO: What changes within the industry have impressed you over the past year? Huang Xiaodong: The impact of the pandemic, the implementation of new cosmetics regulations, the new normal of involution in the post-dividend era, are all making differences to the development of beauty industry. Scientific research, quality and efficacy have become the foundation for brand's breakthrough, and are also the keywords of industry development. CHAILEEDO: For 2023, do you have any plans for Mask Family 1908's development to share? What's your future exploration and innovation be like in the beauty industry? Huang Xiaodong: In the new round of skin-care competition, the importance of research and development at the front end of the supply chain becomes increasingly prominent. In 2023, the Mask Family 1908 will continue to expand the depth of scientific research, product and brand strength. In addition to improving our independent research and development capabilities, we have established joint laboratories with four leading universities, namely, South China Cooperative Innovation Research Institute, National Engineering Research for Nanomedicine, Jiangnan University and Guizhou Medical University, respectively. We have reached long-term strategic cooperation with West China Hospital Sichuan University and built the Mask Family system integrating production, education, research and medicine to further consolidate the scientific research innovation in the formula, composition, technology and so on, boosting our product power and brand strength. Mask Family 1908 advocates a technology-based interpretation of nature, multiple-dimension exploration of Chinese native medicinal plants, combines with advanced skin science and technology to innovate product efficacy, and aims for simple and effective formula and its relevant application. We hope to blend culture with technology while building on the past glory to open up more windows. CHAILEEDO: Where do you see the Chinese beauty market's trend going in the year ahead? And what kind of opportunities can be exploited? Huang Xiaodong: With an epidemic of skin problems, and the swelling of the component-oriented group and efficacy-oriented group, functional skin care becomes a necessity. Correspondingly, consumers now demand more in product efficacy, safety and quality. At the same time, based on the continuous renewal of the user's demand, the development of the product type is more segmented, young generation-oriented and diversified. Under the stable development of the beauty market, product efficacy and brand quality are important considerations for cosmetic and skin care product consumers. Over the past 15 years, Mask Family 1908 has always been committed to facial mask products, leaving customers the impression of a "Facial Mask Expert". Going forward, we still advance in the route of developing products based on facial mask, and take efficacy as the main focus with targeted skin care as the foundation to further subdivide the efficacy of facial mask products, step up innovation in the four major fields of anti-aging, acne-removing, whitening and repair, deepen communication with users, and meet the needs of customers to the best of our ability.

Skincare product is not a medicine, it is not a purely efficacy-oriented thing, it has a lot of emotional and emotional added value. A year's plan starts with spring, and industry changes do not wait. In 2023, what new trends will emerge in the industry? Where are the new growth points in the market? Based on the upcoming 6th China Cosmetics Trend Conference on February 13, the column "Trend Talks" interviewed 50+ founders of famous companies and industry professionals from home and abroad to help open the door to the cosmetics industry with fresh perspectives. CHAILEEDO invited Shinohara Kazuyuki, President of Kose Cosmetics Sales China, to share with us the cosmetic trends in China. CHAILEEDO: What changes in the industry have impressed you in the past year? Shinohara Kazuyuki: Beauty has become one of the brightest growth tracks in the consumer goods category nowadays. With the development of the brands themselves and the expansion and extension of their product lines, we can see that more and more brands in the industry are taking a more aggressive stance and trying to raise the voice volume of their brands in the younger market (Generation Z). In order to form a deeper link with Gen Z, and then strengthen their awareness and satisfaction to the brand that to pave the way for future purchase conversions. Meanwhile, as the impact of overseas travel stagnation caused by the epidemic, major foreign beauty groups have reinforced their repositioning in Hainan and duty-free channels. CHAILEEDO: Could you please summarize Kose's 2022 and look ahead to 2023 in one word each? What are the reasons? Shinohara Kazuyuki: Looking back at 2022 - key word: Change. Decorte and SEKKISEI, the two cornerstone brands of Kose China, share a common keyword in 2022: Change. For Chinese consumers, Decorte Moisturizing Liposome is a highly recognizable item. At the beginning of the year, we completed the upgrade of this serum to Decorte Liposome Advanced Serum in the Chinese market, thus launching the renewal of the LIPOSOME Skin Care line, the core of the brand. The Decorte Liposome Advanced Repair Cream launched in November gives full play to the specialty of multi layer micro fat capsule technology, and it is expected that it will bring a breakthrough growth to the company. SEKKISEI is a brand with a 37-year history. We have been working hard in recent years to explore young people's favorite communication methods while focusing on product power. 22 years, we have made many new changes and attempts. For example, we have made full use of the influence of our brand spokesperson Hanyu Yuzuru to communicate and interact fully with the young community that loves him at China International Imports Expo and on social networks. We have collaborated with the popular anime Demon Slayer to launch a co-branded line of merchandise. SEKKISEI also continues to invest in the exploration and implementation of sustainable solutions through projects such as the SAVE the BLUE environmental campaign. Looking ahead to 2023 - Keyword: Diversity In the face of different consumer needs and the pursuit of product quality and the phenomenon of consumer upgrading, major international beauty groups are accelerating their efforts in the Chinese beauty market with a matrixed multi-brand model. In the future, Kose will also increase its investment in brand building under this trend. Kose hopes to build a diverse, inclusive and more balanced brand matrix in China. In addition to the two well known brands SEKKISEI and Decorte, Kose will also continue to nurture potential brands such as Kose Infinity and One By Kose. At the same time, Kose is also considering strengthening its brand matrix in the high-end beauty segment. For example, by providing face-to-face service to key customers and high-quality MADE IN JAPAN products to optimize the customer experience. At the same time, we also believe that offline interaction with customers is likely to be gradually restored by 2023. In this epidemic, real interactions and experiences between each others have been limited for a long time. The exclusive value of online will then be reassessed in the future. The trend back to offline will be something to look forward to. In the cosmetics sector, a consultative shopping experience that look and select products at same time, or having a guide service, is likely to regain attention. CHAILEEDO: Where is the next breakthrough point for efficacy cosmetics? Shinohara Kazuyuki: Skincare product is not a medicine, it is not a purely efficacy-oriented thing, it has a lot of emotional and emotional added value. Skincare product, especially high-end skincare product, not only focuses on efficacy, product and technology, but also on the texture and fragrance of the product, which are essential to the success of a skincare product. Good packaging, skin feel, and fragrance will bring a sense of pleasure. Such a sense of pleasure is able to give people a psychological suggestion, and this suggestion will give the spirit to stimulate the body and mind to be happy, so as to achieve a good skin care effect. Our group's brand Decorte has always pursued the concept of "Integrated beauty". Neurotransmitters, which are secreted when people feel happy, are also present in the skin and act on the epidermal cells. When epidermal cells receive Neurotransmitters, they produce IP3, a substance that is essential for promoting epidermal cell differentiation. The production of "IP3" is directly related to the shaping of the epidermis (regeneration of the epidermis and formation of epidermal structures). Therefore, brands like Decorte, which are based on the concept of "Integrated Beauty", will focus more on the creation of new beauty methods than on breakthroughs in ingredients. In the future, we may focus on the adjustment and creation of the body's internal mechanism. For example, by promoting the production of happy hormones to strengthen the body's own power to become beautiful. CHAILEEDO: Traffic is getting more and more expensive. What is the new breakthrough point for brands? Shinohara Kazuyuki: To a certain extent, brand is a kind of energy, reflecting an impulse and willingness to take action deep inside consumers. Therefore, instead of traffic being expensive, it is more likely that users' needs are getting higher and higher in the current competitive environment, thus making the conversion of brand communication further difficult and the cost of acquiring users becoming higher. For us, the new breaking point of the brand should be to enhance the potential energy. First of all, as a beauty brand, we should provide users with high quality rational value and really solve the needs of users. Second, to provide users with differentiated perceptual value, so that they have a good psychological feeling. In this way, we can effectively drive consumers to keep buying.

Since the pandemic, consumers will be more prudent in choosing cosmetics, with more purity and safety on their minds. A year's plan starts with spring, and the industry changes at a fast clip. What new trends will emerge in 2023? Where do the new growth points lie in the market? Based on the upcoming 6th Chinese Cosmetics Trend Conference on February 13, CHAILEEDO interviews the founders and industry personages of 50+ well-known companies at home and abroad to get the cosmetics industry off to a flying start with a fresh view.  CHAILEEDO invited Xie Yong, founder of Dr.Plant and chairman of Beijing Dr.Plant Biotechnology Co., Ltd., to share with us the cosmetic trends in China. CHAILEEDO:  What changes within the industry have impressed you over the past year? Xie Yong: One word to sum it up, focus. The past year was the third year of the pandemic, so the industrial peers all thought that it would take a turn for the better at the beginning of 2022, but our expectation failed. Since the second half of 2022, we can feel that most means proven effective to weather the pandemic are rendered useless. Industry-wise, I get most feeling concerning the brick-and-mortar stores, as many previous business competitors are quitting the brick-and-mortar model including some peers. Offline operation changes remarkably, which is especially shown in business competitors and their products. I can feel an about-turn in their business model. This can also be felt for online business, which is undergoing rapid development, with a lot of segmented brands emerging. But on the whole, the odds for a large-scale operation is low, the industry is still committed to cosmetics industry in the long haul. Some companies with great innovative or R&D capability can secure leading resources while the rest become more online-oriented though. Dr.Plant was basically advance on schedule, but it was only after the summer of 2022 that we felt that demand and spending power were on the wane due to the effect of the pandemic, which affects us greatly. Good thing was that in September, October, and the Chinese Double 11 Shopping Festival, we bounced back and bottomed out the performance, maintaining or even exceeding a little that of last year. But at the end of the year, and I felt it coming down again, and everyone shall share the same feeling. Because the nationwide fight against COVID was all-consuming. With negativity brought by the pandemic, consumers will be more prudent in choosing cosmetics, with more purity and safety on their minds. Skin care products containing plant ingredients mean safety to some extent. Dr.Plant has made some progress in this area, and we have achieved some results in cooperation with the State Key Laboratory of Kunming Plant Research Institute of Chinese Academy of Sciences. And we are very pleased with that. In fact, we have a lot of R&D power in our country. If the cosmetic industry can use some of the country's emphasis on R&D power, then I think it is our industry's luck and our customers 'luck. CHAILEEDO:  For 2023, do you have any plans for Dr.Plant's development to share? What's your future exploration and innovation be like in the beauty industry? Xie Yong: We can't disclose anything specific for now, but one thing is clear that other than the existing Dendrobium extract ingredient, we are continuously pushing in R&D and ingredient, hoping to produce ingredients to represent China. After the reform and opening-up, China has been a major producer in cosmetics for years, but think about it, which product really contains authentic China-made ingredients? Few and far between, including so-and-so acid or so-and-so ingredient, are basically foreign names, which means that the inventors of them are basically foreign companies, Chinese ones play no part in it. That's why we should move fast in making our own stuff. In fact, our civilization and plants have coexisted for millennia. But the discovery chemical composition actually has two or three hundred years of history. It brings uncertainty to the human body and society, and we are not knowing everything about it. But plant ingredients are really safe, because we have been dependent on them for survival, so this is why Dr.Plant is dedicated to studying and developing plant ingredients. In China, there are a lot of very good plant ingredients left undeveloped, and this hinges on our researchers' efforts. Dr.Plant's R&D certainly does not mean a annual plan for 2023. Once our future direction is set, the result will take three to five years to deliver, because we never rush for anything. So what Dr.Plant will bring out in 2023 is what's been planned three or five years ago. R&D is no easy task. First, the cycle is long-drawn-out. Second, it costs a great deal. Third, risks are inevitable, which baffles us for long. Fortunately, we have a group of PhDs from Chinese Academy of Sciences and our own R&D personnel working together. I advocate long-termism and gumption. Enterprise strategy is simple and long-term. Dr.Plant will not change our course, because we only have one ultimate goal, to develop into an R&D-oriented innovative company, that is, unceasingly through product raw material and raw material technology research and development, and it technology research and development, unceasingly find customer demand, give them the right product. The direct impression for most of Dr.Plant is that we are store holders, because we open a lot of stores, like 3000 to 4000 in figure. Fact is, this is not the whole picture, Dr.Plant is devoted to research and development, if it is not enough it technology, it is impossible to manage so many stores, not enough product innovation, cannot have customers to go to our store, cannot meet the demand of so many consumers. CHAILEEDO: Where do you see the Chinese beauty market's trend going in the year ahead? Xie Yong: Changes in the year ahead should certainly be an incremental part of long-term changes. As for the long-term direction, European, American, Japanese and South Korean markets are a good reference, that is, the market is under constant concentration, with also that kind of long-tailed polarized market existing as well. So the result is that, first, a few companies will gather more and more resources. Second, if want to survive, either give away the market or to compete, or occupy some more differentiated market. China is a market with a vast area, very complex hierarchy, and the consumption habits and customs bears big-time differences from other countries, which also creates many opportunities for some brand's long-tailed market. If a brand wants to survive, it is a good way to focus on segmented market, and this is a way to avoid being concentrated. CHAILEEDO: What are the chances of breaking the deadlock for the brick-and-mortar stores in 2023? Xie Yong: I think it should not be limited to the so-called “brick-and-mortar channel”. Instead, we should think of the opportunity of breaking the deadlock as a two-pronged attack, including online and offline approaches. More importantly, the combination of the two approaches can be a real opportunity. Offline business does have an irreplaceable edge, namely trust, as many consumers often consider buying drugs, milk powder and cosmetics in brick-and-mortar stores are more reassuring. Correspondingly, online services can be full of tricks, an advertisement site or a link can vanish for no reason the next day, so how can consumers protect their after-sales rights? It's pretty common these days. But there are still many opportunities online, the key is to locate customers' demand, and cater to the demand and consumption habits, hence producing the right products and using the proper platform to promote them.

We hope Joy Group's two makeup brands, Judydoll and Joocyee, be distinctive. Recently, the National Bureau of Statistics of China released the total retail sales data of consumer goods in October 2022. The total retail sales of cosmetics category was 30.9 billion yuan, a year-on-year decrease of 3.7%. In fact, since the beginning of this year, the market of cosmetics has been declining and reached its lowest growth in five years. CHAILEEDO noticed that one innovative brand, Joocyee, stood out by bucking the trend and performed well under these downturn. In this year's Chinese Double 11 Shopping Festival, it was listed in the top 5 of local color cosmetics brands for the first time. Established in 2019, Joocyee achieved a total revenue of more than 100 million yuan in the first year, with break-even profitability. Its revenue grew to 500 million yuan in 2021 and is still growing steadily in 2022, becoming one of the fastest growing brands in the Chinese color cosmetics market. Meanwhile, Joocyee entered Japanese markets in early 2021 with great popularity. In November 2022, Joocyee has already been sold in more than 400 brick-and-mortar stores in Japan. According to Joocyee, its expected performance in 2022 will increase by more than 40% compared to its 2021 performance in the Japanese market. Joocyee was established by Joy Group, which is a fast-growing unicorn company ($1.2Bilion USD valuation) in the China beauty sector. Joy Group has launched two prominent brands in China, Joocyee and Judydoll, with the latter being ranked as the TOP1 brand for eyeshadow, blush, eyeliner, and contour products in China. With great honor, CHAILEEDO invited Allan Liu, the president of Joy Group, to share with us the experience of founding Joocyee and the brand's thoughts on going global. CHAILEEDO: Joy Group was founded in 2016, when international makeup brands were still occupying most market share, what is the background? Allan Liu: We realized that Chinese consumers have their own unique pursuit of the design, color and formula of cosmetics products, and it is difficult for international makeup brands to make tailor-made products for Chinese consumers. Based on the idea of designing and creating products more suitable for Chinese consumers, we decided to establish the company, and launched our first brand Judydoll in 2017, and our second brand Joocyee in 2019. CHAILEEDO: Joocyee was founded in 2019, when the Judydoll already had a relatively large reputation, why did you want to create Joocyee? Allan Liu: Our first success was Judydoll, which is a mass-market positioning brand with a cute, colorful and playful brand image and whose customer profiles are mostly young girls. With this, we wanted to build a brand in the more premium masstige segment. When studying the positioning of color cosmetics brands, we believe that the most important factor that distinguishes one brand from another is a brand’s aesthetics and emotional resonance. At that time the Chinese makeup market lacked such an aesthetic brand: an independent, chic, and romantic brand tailored to the urban woman. So, we decided to fill the market gap by building just such a brand - Joocyee. CHAILEEDO: Joocyee became profitable after just one year on the market, how was that achieved? Allan Liu: Our fast route to profitability was a direct result of our superior product’s popularity among the targeted customer segments, which resulted in a lot of word-of-mouth advertising. This in turn, meant that we could afford to rein in our marketing dollars while still realizing growth. In addition, as a digitally native company, we excelled at conducting digital marketing campaigns which resulted in high return on the marketing investments we did make. CHAILEEDO: The most well-known label of Joocyee is "designer makeup", how do you account for this? Allan Liu: The concept of "designer makeup" combines two levels of expression of the brand: the pursuit of romantic aesthetics, and the exploration of tailored-made makeup for Chinese women. Firstly, we believe that makeup is the carrier of life, art, and aesthetics, so we established a high aesthetic standard from our designers for our brand and products. The goal was to interpret romantic aesthetics from an oriental perspective by exploring the use of different themes in makeup. Another interpretation of designer brands is that we have designed some products specifically for our targeted audience. Our design is about tailoring products that are practically useful for your target demographic, and we tailored a series of products specifically for Chinese women. We realize that the skin tone, skin type and facial bone structure of Chinese women is very different from that of European and American women - even the climate and environment vary greatly. To help our customers better perceive their skin tone and skin type, Joocyee launched a WeChat and Tmall mini-program this year using advanced AI technology. This technology will intelligently recommend matching makeup products to consumers according to their dermatological characteristics. The program has received a considerable amount of attention and netted many more positive reviews than initially expected. As of November 2022, the program has reached more than 3.5 million visits. CHAILEEDO: At present, there is a phenomenon that a lot of innovative beauty brands are not profitable. What should these brands do if they want to be profitable? Allan Liu: I think a good and profitable brand should really focus on providing your customers with good products. If a brand can establish a worthwhile product for its consumers, it follows naturally that interest will spread via word-of-mouth and repeat purchases. This is one dimension of how we define healthy growth. As a result, I advise that management teams spend more time on the product development phase in order to create world-class products, rather than concentrating too much of their focus on marketing. CHAILEEDO: What is your view on brick-and-mortar stores? Allan Liu: Without the pandemic, we do attach great importance to the brick-and-mortar stores among the colored cosmetic sector because I think these stores are a reflection of the differentiation of our brand from other brands. On one hand, the brick-and-mortar store is a contact point for customers. Especially for our category, consumers can enter an immersive environment through the stores, so they can know what your brand wants to express. Consumers can better understand whether the product is suitable for them after trying them in our physical locations. CHAILEEDO: For international niche makeup brands, if they don't do much research on Chinese consumers, is it hard to enter in or hard to succeed in China? Allan Liu: I think for international niche brands if they have great characteristics in terms of brand style or endorsement, they can find a place in China. Chinese customers have many tribes, and each prefers distinctively products. If a brand want survive in China, there are some ability the brand should have: a unique brand story or brand aesthetics styles, a unique product formulations methods or ingredients etc,. CHAILEEDO: The two makeup brands of Joy Group have also moved abroad, leading consumers to believe that the Joy Group is very optimistic about the international market. Why did Joocyee choose the Japanese market? Allan Liu: I believe that the Joocyee brand aesthetics and products, which is suitable for a modern, chic and romantic urban Chinese woman, would also echo a lot (culturally speaking) with the urban female customers from Japan. Modern oriental women have a kind of commonality. They have the traditional culture of inheritance and introspection, but also have the new era of independent and fashionable female characteristics. In this regard, Chinese and Japanese women are very similar, and it was on this belief that we made the decision to move our products to a “foreign” market. If our group enters the American and European markets in the future, we will consider creating a new brand that is more in line with the European and American markets. CHAILEEDO: What do you think is the key for Joocyee to gain recognition in Japanese markets? What are the differences between Chinese consumers and Japanese consumers? Allan Liu: I think there are two aspects. On the one hand, Japanese consumers' skin tone and aesthetics are closer to those in China, so Japanese consumers will like the packaging style that Chinese consumers like. The products of Joocyee are also very suitable for Japanese consumers' skin types or skin tones. The second aspect is that innovations in Chinese cosmetic products are very advanced and are now absolutely ahead of the world. These innovations in China during the last three or four years, I think, have been very amazing. Just like the lipsticks that used to have problems such as sticking cup and dryness, lipsticks that Chinese makeup brands made can now basically solved that issues. In another example, Judydoll Slim Liquid Eyeliner has adopted a tip of only 0.014mm, so even a novice can apply makeup very smoothly. We are confident that these, and other products, will surely be popular in Japan. Due to the difference in lifestyle, culture and climate, there are minor differences between Chinese and Japanese customers. For instance, as a result of the fast-paced and long-hours working culture in China, China’s working women put a lot more focus on long-lasting foundation products, which are not so sought after by Japanese customers. CHAILEEDO: At present, the number of makeup brands going abroad is much larger than that of skincare brands in China, what’s your view about this phenomenon? Allan Liu: I do believe that both China’s color cosmetics and skin care brands will go global at similar paces very soon. I think that perhaps colored cosmetics are easier to “start from 0 to 1”, because of the strong sense of color cosmetics, consumers can tell if the product is what they need at the first glance or from the first time they use it. So color cosmetics brands can often target their customers more quickly. CHAILEEDO: What are the opportunities and challenges in the process of Chinese brands transitioning into global markets? Allan Liu: The opportunity is that Chinese brands have already got a few best-selling products which are superior in design and quality in comparison to that of their peers global brands’ product offerings. This is thanks in no small part due to the progress in China’s designer community and the innovations in Chinese R&D and factories. We can take these great products global and offer them to our global customers. The challenge is that Chinese companies still have a long way to go in order to build multi-brand and multi-regional organizations. To date, most Chinese companies are still single-brand companies operating in China only. When our businesses go global, our organization has to be able to support our global operations. Our commercial team in each country would have to be able to conduct very localized marketing and sales operations, and our supporting functions such as supply chain, regulations and HRs would need to be able to support the global expansions as well. These capability building would take a few years to build up, but we are confident that we will reach that level. CHAILEEDO: What is the outlook of the Joy Group on its international plans in short term? Allan Liu: We expect that global revenue of Joy Group will account for about 20% to 30% of the total revenue in 5 years. Our target markets are Japan, Korea, Indonesia, Vietnam and other Asian countries. We intend to continue hiring and building a strong local team in major Asian countries to support our long-term growth.

Jiang Shubo: "Biomimetic chemistry, biological fermentation, synthetic biology and precise targeting regulation are the main directions of future cosmetic R&D." A year's plan starts with spring, and the industry changes at a fast clip. What new trends will emerge in 2023? Where do the new growth points lie in the market? Based on the upcoming 6th Chinese Cosmetics Trend Conference on February 13, CHAILEEDO interviews the founders and industry personages of 50 + well-known companies at home and abroad to get the cosmetics industry off to a flying start with a fresh view. CHAILEEDO invited Jiang Shubo, person in charge of the Skinnos brand, to share with us the cosmetic trends in China. CHAILEEDO: What changes within the industry have impressed you over the past year? Jiang Shubo: The biggest change I feel is uncertainty, such as covid-19, new rules, involution, sales … but every coin has two sides and impermanence is the norm, so a sound mentality matters more. CHAILEEDO: For 2023, what development plans does your business have to share? What's your future exploration and innovation be like in the beauty industry? Jiang Shubo: In product planning, we will not follow the tide, which means what most brands are doing now, to repeat development of homogenized multiple series. We will not surpass 15 SKUs (Stock Keeping Unit) on facial care products, because we want to attract and retain customers via "suitability" rather than "quantity". Skinnos has two product lines, the first is the basic care line, namely "Daily Duplex Essence Series", including the released cleanser, essence water, and facial mask. Second is the quick fix line, with targeted products following down the line, such as advanced essence series, anti-aging cream and sunscreen products. In technology, in addition to strengthening exclusive strategic cooperation with the Swiss Naturalabor ZS laboratory on basic research of barriers, material customization and new product formulations, we are also stepping up a joint development project with the Senescence Innovation Platform of Yangtze Delta Region Institute of Tsinghua University. At the same time, we continuously advance the symbolic item "Daily Duplex Essence", and keep on exploring the core active ingredients screening, target pathway mechanism research and optimization of the carrier transportation system, to promote the scientific practice of precision skincare in China. In channel layout, this year will witness intensive effort on offline channels for the Skinnos. In addition to the full set of new beauty multi-brands stores such as Zhuangziyue, Yinhe(Silver Box), beauty choice, will also cooperate with vsp.jd.com, Guoda Drugstore system, South-west beauty CS(Customer Satisfaction) channel and other 2000 institutions in the domestic offline beauty industry. In marketing, this year we have a major product promotion. After the opening of the year, we will launch a "national goods & thriving youth" IP campaign, hoping to spread the brand's energy and value orientation through positivity. For the new-generation consumer brands, the most important thing is not just to provide efficacy, but to create a spiritual connection. CHAILEEDO: Where do you see the Chinese beauty market's trend going in the year ahead? Jiang Shubo: The track will turn more "diversified", such as the emerging need for niche products, men's skincare and aesthetic medicine repairing; Scenes will be more "segmented", such as outdoor camping and stay-home emotional healing that will lead to new demands; R&D will be facing more "involution", with customized raw material becoming each brand's staple, so those with a head get to enjoy the dividends. We see that the main direction of cosmetic research and development is biomimetic chemistry, biological fermentation, synthetic biology and precise targeting regulation. To that end, Skinnos anchors in the "precision skincare" track, and put forward the exclusive "precision skincare" four-quadrant development formula: core ingredient screening, carrier transportation system, formulation design tools, clinical efficacy evaluation, and take the above "precision skincare" paradigm as the R&D guideline. Next, we will base on the scientific logic of the model to solve the key problems of target delivery, active sustained release, transdermal absorption, quantification of efficacy and so on, so as to make truly safe, scientific and effective products.

Since experiencing the epidemic, consumers will be more cautious in the selection of cosmetics, and increasingly prefer to use clean beauty, with the kind of cosmetics that seem to be free of impurities and safer. A year's plan starts with spring, and industry changes do not wait. In 2023, what new trends will emerge in the industry? Where are the new growth points in the market? Based on the upcoming 6th China Cosmetics Trend Conference on February 13, the column "Trend Talks" interviewed 50+ founders of famous companies and industry professionals from home and abroad to help open the door to the cosmetics industry with fresh perspectives. CHAILEEDO invited Haa co-founder Bai Xue, to share with us the cosmetic trends in China. CHAILEEDO: What changes in the industry have impressed you in the past year?

Shortly after CHICMAX had floated on the stock market on December 22, 2022, it invested in a beauty company. "It is very likely to be a company engaged in online operation and service in the beauty." said an industry insider who declined to be named. Recently, the National Enterprise Credit Information Publicity System showed CHICMAX has newly invested in a company with a shareholding ratio of 49%. This move is less than half a month from the listing of CHICMAX. It is understood that the company CHICMAX invested in is named Shanghai Shangxin Cosmetics Co., LTD. (hereinafter referred to as "Shangxin Cosmetics"). According to the National Enterprise Credit Information Publicity System, Shangxin Cosmetics was established on December 30, 2022, with Ye Ouke as its legal representative and the registered capital of 15 million yuan (about $2.2 million). The business scope of the company includes cosmetics wholesale and retail, personal care products sales, etc. It is reported that the major shareholder of Shangxin Cosmetics is Shanghai Jiashifu Information Technology Co., LTD. (hereinafter referred to as "Shanghai Jiasifu"), which holds 51% of the shares and has subscribed 7.65 million yuan (about $1.13 million). The other shareholder is CHICMAX, with a shareholding ratio of 49% and a subscription amount of 7.35 million yuan (about $1.1 million). According to public records, Shanghai Jiashifu, founded in July 2021, is one of the small and micro enterprises with a registered capital of 5 million yuan (about $737,000). The company's shareholders Ye Ouke and Pan Tingting hold 51% and 49% respectively, and the former is the legal representative of the company. The company's business scope includes cosmetics retail, technical service, development, and consultation, internet sales, clothing sales, etc. In addition, according to Liepin.com, Shanghai Jiashifu is currently recruiting e-commerce operation managers (Taobao), distribution directors, and e-commerce customer service specialists, and it requires applicants to "have basic e-commerce knowledge, be familiar with backstage operations of business consultants, and have work experience in cosmetics and skin care or consumer products". An industry insider who declined to be named said, "It is very likely to be a company engaged in online operation and service in the beauty business." The importance of online channels for beauty brands goes without saying. The prospectus of CHICMAX showed that the company's revenue from online channels in the first half of 2022 was 931 million yuan (about $137.2 million), accounting for 73.8% of sales. If it partners with an online operation company, it will undoubtedly further accelerate the company's online channel development. As is known to all, CHICMAX was listed on Hong Kong Stock Exchange on December 22, 2022, and is praised as "the first share of Chinese cosmetics in Hong Kong Stock". Thus, as the first company invested by CHICMAX after its listing on Hong Kong Stock Exchange, Shangxin Cosmetics is of great significance.

On one hand, the industry is facing loads of opportunities of the integration and exchanges of frontier science. On the other hand, no substantive breakthrough has been made whatsoever. A year's plan starts with spring, and the industry changes at a fast clip. What new trends will emerge in 2023? Where do the new growth points lie in the market? Based on the upcoming 6th Chinese Cosmetics Trend Conference on February 13, CHAILEEDO interviews the founders and industry personages of 50 + well-known companies in China and internationally to get the cosmetics industry off to a flying start with a fresh view. CHAILEEDO invited Chen Shaojun, president of the China Association of Fragrance Flavour and Cosmetic Industries(CAFFCI), to share with us the cosmetic trends in China. CHAILEEDO: What industrial changes have impressed you over the past year? What achievements has CAFFCI made? Chen Shaojun: Recently, I have commented on the brief development history of our county's cosmetics industry, saying it was featured by a brilliant history, a tortuous road and a promising future. And I mentioned that, as of June 2021, total sales of cosmetics had been growing faster than retail sales of consumer goods for years except for some months. In 2021, the pandemic persisted, but the cosmetic industry still achieved a great deal, with a year-on-year increase of 14%, which is still higher than GDP by 6.1 percentage points, and higher than the above-norm total retail sales of consumer goods by nearly 2 percentage points. In the first half of 2022, due to the raging pandemic, and with the main cosmetics-producing area Shanghai getting the hardest hit, the year-on-year growth rate of total retail sales of consumer goods dropped below the curve for the first time. As of June (by cumulative value), the year on year growth stood still below the total retail sales of consumer goods by nearly 2% (-2.7 for September, -3.7 for October), which was a real tough going. In 2022, the month-on-month increase was 9.87% in March, showcasing signs of recovery. But in April, it plunged to -37.97%. And while total retail sales of consumer goods have increased by -13.88%, cosmetics dropped by 24 percentage points. But we still need to recognize the resilience of the industry, as the sales then grew by 35.98% in May and by 45.7% in June, 30 percentage points higher than the total retail sales of consumer goods once again. The increase was -40.33% in July and bounced back to 13.83% in August. In September it fell to 10.07% and slid to -2.5% in October. In retrospect, despite the volatile trend of the industry's development, the 2022 scenario is arguably unprecedented. During this period, our Association has kept pace with the times, helping the resumption of work and production through various forms of service to ease difficulties. And we conducted multiple online and offline meetings. In the first half of 2022, five topical meetings with each including over 10 thousand participants were held; An online public service fair was held; multiple anti-pandemic events were made a success; A number of questionnaires and online surveys were conducted; We have also launched the schoolbag donation activities for poverty alleviation; and we participated in many communication meetings with relevant government departments, and allowed to postpone the May 1st deadline to the end of the year(May 1, 2022 is the deadline for cosmetics companies to submit product documentation and certification documents), gaing an industry-wide applaud. CHAILEEDO: Since 2023 is around the corner, do you have any plans for the development of the association to share? What's your future exploration and innovation be like in the beauty industry? Chen Shaojun: I had put forward several suggestions on the status quo of the industry: First, show reverence for the law; Second, step up R&D; Third, focus on the latest frontier science and technology; Fourth, pay attention to the impact of the macroeconomic economy on the industry. In view of where the majority of the small and medium-sized enterprises(SMEs) stand, I propose that enterprises should set store by the K-shaped recovery(A K-shaped recovery is characterized by contradictory trends: Certain professions and classes of people thrive, while others continue on a downward path). In this context, that is, the asymmetric impact of the recession on firms of different sizes, making the strong stronger, and the weak weaker. Second, shore up self-confidence on the basis of full recognition of the importance of SMEs. MEs are the "capillaries" of market economy that is crucial in promoting macro-economic "blood circulation". Once they get debilitated, even a mighty giant will get heavy limbs and suffer slow movement. China's past glory can be attributed to the little-chips-can-light-great-fires grassroots enterprises in the early days of reform and opening up, and it is what sustains China's prosperity till today. But the future of China must lie on SMEs without a doubt. In this regard, SMEs should have firm confidence. Third, how can SMEs turn the corner and continue the glory? My humble opinion: first, strive to develop the ability of scientific research and innovation. Innovation is the primary driving force of national development and the key factor of enterprise competition. The more difficult the situation is, the more enterprises shall be focusing on innovation. The era of relying only on the concept and propaganda has become the past tense as we witness stricter supervision, consumption upgrading and rational consumption. We must have a clear understanding of the current picture. Second, hone the ability to fill up the market. The huge market makes it difficult to compete with big enterprises head-on, but a wise way is to deal with the gaps, stepping up efforts in "SRDI"(Specialized+Refinement+Differential+Innovation) can be another way out. Third, adhere to the national development strategy. Follow closely the national development strategies, look for opportunities and seize them as they pop up. After all, at any time, the big picture rules the small one. Fourth, seek unity with others. In general, the internal systems of small enterprises are not necessarily complete, which requires solidarity and complementarity. Fifthly, show reverence for the laws and regulations and make sure to learn them well. Strict supervision calls for severe penalties, so one single slip can bring eternal regret. CHAILEEDO: Where do you see the Chinese beauty market's trend going in the year ahead? What kind of opportunities for product types can be tapped? Chen Shaojun: After decades of rapid development, the industry R&D and sales are hitting a bottleneck. Despite temporary difficulties, the cosmetics industry is still rising, that is beyond doubt. In R&D, on one hand, the industry is facing loads of opportunities of the integration and exchanges of frontier science. On the other hand, no substantive breakthrough has been made whatsoever. In sales, how the internet dividend works bears resemblance to that of the traditional sales model, which is basically featured by stock-based consumption, also it expects breakthroughs. This leads to the grave involution within the industry, which calls for more endeavor in R&D, innovation, and in-depth research in search of breakthroughs. In addition, the industry should pay attention to cross-border cooperation, such as deep integration with beauty parlours in product and sales models, and expand flexible manufacturing space; Attention should be paid to the new, these enterprises 'thinking often gives the industry new inspiration. In short, we hope that the industry will be make R&D the foundation, efficacy the breakthrough point, science and technology the lead, existing technology the foundation, and take all-round innovation as the mission, leading enterprise as the benchmark to expand step by step. Forge ahead with a down-to-earth attitude and the big picture in mind, thus seizing the opportunity of the industry that turns small growth to a quantum leap.

With the advent of the post-epidemic era, Chinese consumers all the more highlight a healthy lifestyle, indicating a rising demand for products concerning skin health and skin problems. A year's plan starts with spring, and the industry changes at a fast clip. What new trends will emerge in 2023? Where do the new growth points lie in the market? Based on the upcoming 6th Chinese Cosmetics Trend Conference on February 13, CHAILEEDO interviews the founders and industry personages of 50 + well-known companies at home and abroad to get the cosmetics industry off to a flying start with a fresh view. CHAILEEDO invited Huang Jinfeng, the founder, chairman and CEO of YSG, to share with us the cosmetic trends in China. CHAILEEDO: What changes within the industry have impressed you over the past year? Huang Jinfeng: In terms of external factors, the Chinese beauty industry have shifted the past high growth to a slow one, with supply chain, logistics and offline business facing unprecedented challenges. Amid compounding competition, international beauty groups has channeled greater effort into boosting investment and promotion for a bigger share of the market. These factors have brought along mounting challenges to the beauty industry at home, which is still in its infancy. In terms of the industry, despite a slowed overall growth rate of the makeup market, efficacy skincare and other specialized sectors are gaining momentum. In contrast, the development of skin care products also brought tests to the ability of R&D, brand building and channel deployment. Therefore, the epidemic catapulted the cosmetics industry to a quality-oriented era of brand cultivation over the last year. Compared with the previous eyeball-seeking strategy, the attention paid to R&D is on the rise remarkably, elevating the industry to a new stage featured by "internal strength" competition. CHAILEEDO: For 2023, do you have any plans for YSG's development to share? What's your future exploration and innovation be like in the beauty industry? Huang Jinfeng: Over the past five years, Chinese beauty products has seen an explosive growth, therefore YSG seized on the dividend of product type and such high traffic to realize rapid growth. Due to the heavy toll taken from the pandemic and other factors, the Chinese consumer market today is quite a challenging place. At the departure point of the new-five-year, our team started a "Second Startup", which takes brand building as the centerpiece and gathers momentum for entering a new stage with the aim of an out-and-out transformation. Looking forward, the company will continue to uphold strategic transformation, dual driver of R&D and brand with a focus on product innovation and channel optimization. Rather than an immediate profit, we emphasize more on long-term, healthy and sustainable development. CHAILEEDO :Where do you see the Chinese beauty market's trend going in the year ahead? Huang Jinfeng: We have every confidence in the Chinese economy and market. And we will step up our patience as well to be an explorer-cum-doer of unveiling the “beauty” of China. With the advent of the post-epidemic era, Chinese consumers all the more highlight a healthy lifestyle, indicating a rising demand for products concerning skin health and skin problems. Skin care refinement, the pursuit of use effect, and more concern for product component are becoming the young generation's holy grail of skin care pursuit. In this regard, more diversified and group-oriented consumption demands like sensitive skin repair are emerging. This will open up more windows for innovative brands. I believe that in the future, more beauty brands will target Chinese skin characteristics and problems, integrate their own, external and even the global scientific research strength to launch more effective cosmetic products of high quality, a topic enabling huge potential for innovation. CHAILEEDO: Since gaining traffic is getting more expensive. What do you think is the new breaking point for beauty brands? Huang Jinfeng: In recent years, due to the slow growth of the demand for beauty products and the decreasing traffic dividend, the beauty industry has gradually changed from a dividend-driven industry to one driven by product and brand, which shows that the industry is now calling for a competition of all-round capability. Any era has its own share of dividends, it's a no-brainer to seize the dividend to enlarge business quickly, but as the times develop, the traffic dividend will disappear. For a long-term and stable road ahead, companies must always be mindful of possible risks and ponder on the next step upon disappearing dividend. Therefore, YSG initiated a "Second Startup", carrying out a channel-based overhaul and furthering the channel efficiency. So facing the decline of the traffic dividend, we materialize the development of resilience and sustainable growth.

With a growing body of users accustomed to the "order online + experience offline" model, all brands are now undertaking the online operations. A year's plan starts with spring, and the industry changes at a fast clip. What new trends will emerge in 2023? Where do the new growth points lie in the market? Based on the upcoming 6th Chinese Cosmetics Trend Conference on February 13, CHAILEEDO interviews the founders and industry personages of 50 + well-known companies at home and abroad to get the cosmetics industry off to a flying start with a fresh view. CHAILEEDO invited Fan Wenhua, the founder and CEO of Fawa Herb Beauty, to share with us the cosmetic trends in China. CHAILEEDO: What changes within the industry have impressed you over the past year? Fan Wenhua: First of all, the national confidence of consumers is gaining from strength to strength, and the products at home are rising, thus more and more domestic skin care brands are favored and chosen by consumers. Thanks to the trust and choice of the public, Fawa Herb Beauty has topped 5000 stores across the country for now. At the same time, the development of the industry is more healthy and more benign. Now the laws and regulations on skincare products are more sound to further clarify strictly the quality and efficacy of products, thus enabling a standardized development. With a growing body of users accustomed to the "order online + experience offline", all brands are now undertaking the online operations. Fawa Herb Beauty is no exception, both operating in Tiktok and Meituan. This year, the total GMV in Tiktok topped 20 million, with order numbers exceeding 20 million. And we boast the biggest sales in the national beauty industry and has become Titok's annual partner of the year. CHAILEEDO: For 2023, do you have any plans for Fawa's development to share? What's your future exploration and innovation be like in the beauty industry? Fan Wenhua: We will continue to expand offline stores to facilitate the process of deploying enough stores for every city. Next year Fawa Herb Beauty will continue to get more stores closer to our consumers and open them near places that is frequented by the consumers, so as to reduce their choice and time costs. We will stay committed to product R&D and service, ensuring continuous investment in R&D. For now, Fawa Herb Beauty's products have been fully upgraded from previous plant formulations to biotech with 33 national patents gained. Next year, it will continue to work with leading institutions and experts around the world for more innovative and quality products. Service-wise, we will put own strength high on the agenda, and focus on professionism, "Always provide cream-of-the-top service of the same quality", that can we render a better skincare experience. CHAILEEDO: Where do you see the Chinese beauty market's trend going in the year ahead? Fan Wenhua: First, regulations and regulations will continue to be strengthened to promote sound development of the industry, and at the same time the restructuring of the industry will be accelerated. Second, the online-offline integration will be more tightly combined. For consumers, a fragmented consumer environment requires a fragmented service model. Offline experience alone or online channel selling skin care product alone makes it already difficult to solve customers’ main problems and meet their need in skin care, therefore a mutually reinforcing force can then cater to the demand and bring forth benign circulation. Third, technological empowerment will be further enhanced. Users will make their first choice due to the brand effect, but what keeps them coming back must be "efficacy and experience". So more and more brands start employing R&D, AR, AI and other advanced technologies to analyze skin problems and need for better solutions and experiences. Every store of Fawa Herb Beauty is equipped with a panoramic AI skin tester, which has in store hundreds of millions of user investigation reports and a great amount of data. By using high-definition restoration, five-spectrum skin check and other technologies, the tester can provide an in-depth skin visualization report in 10 seconds. Then accordingly, we will provide a targeted facial care plan for each user's actual skin problem, realizing a "one-to-one" skin improvement service. CHAILEEDO: What are the chances of breaking the deadlock for the offline channels in 2023? Fan Wenhua: Digital Uni Marketing, this is not the future, but the present continuous tense, and we will channel great effort into it. Fawa Herb Beauty has already set up the integrated retail platform covering payment collection, inventory, order, operation, and so on, to realize customer-centered cost reduction and efficiency improvement, empowering all-round capability of each store. At the same time, we should embrace online traffic with open arms, whether it be Tiktok, Kuaishou, WeChat channel, or Meituan. Operation should be strengthened in all these platforms to meet customers' diversified purchase and experience needs. Dive deep into what we are good at and improve strength. For offline channel, better product performance, more professional skincare experience, more human service, is always part and parcel of keeping customers. CHAILEEDO: What's the next breakthrough point in cosmetics? Fan Wenhua: Product efficacy. Efficacy is always the demand of the most concern and of the most core requirement. Therefore, it is a good entry point and breakthrough point for the cosmetics industry to make continuous improvements on efficacy and user experience at any moment. The R&D strength will become the "moat" of the brand "castle". Next is the segmented demand track. Customers need experts from each segmented area for their diversified needs. A more vertical and segmented demand indicates the trend going forward and a breakthrough point.

At the end of 2022, Kao Group launched its first men's beauty brand. Before long, Estee Lauder opened its Innovation Research Center in China, one of which focuses on men's skincare products. In addition, Unilever and Shiseido also launched high-end men's skincare brands in the Chinese market in 2022. Will the men's beauty market become the hot cake? The men's beauty market is bustling this year. Estee Lauder, which already owns its high-end men's skincare brand Lance, further announced that regarding the officially opened China Innovation Research Center, it will establish a Men's Effective Skincare Research Center, which will focus on scientific research, product and packaging innovation of men's skincare products, as well as carry out clinical testing for Chinese male consumers. It may be the first time that a global beauty giant has opened a research and development center specifically for Chinese male consumers. Moreover, according to CHAILEEDO, only a few beauty brands, such as MAKE ESSENSE, have published reports of clinical testing for male consumers. Estee Lauder is likely to be the first international beauty giant to announce clinical testing for Chinese male consumers, reflecting its determination to further expand its presence in the men’s skincare market. Other companies showing interest in the men's market include Shiseido, Kao, and Unilever. Not long before Estee Lauder's announcement, Kao Group launched UNLICS, a men's beauty brand aimed at Generation Z men who are not satisfied with their beauty needs. It is understood that this brand is Kao's first cosmetics brand including makeup, specifically for men. UNLICS brand manager from Kao Cosmetics Business said to the public that UNLICS will actively consider entering the Asian market, mainly China, and strive for the global market in the future. This June, Shiseido launched SIDEKICK, a new luxury compound skincare brand for Asian Gen-Z men, with high-profile moves, and announced its launch in the Chinese market on July 1. As an important measure of "Winning Beauty and Skincare", one of the four strategies of Shiseido in China, the launch of SIDEKICK was highly expected by Shiseido and Ananche, the head of Men's Products Business Department of Shiseido Group, was appointed to be in charge of this brand. As one of Shiseido's most significant ventures in the Chinese market, Ananche said to the media that he expects SIDEKICK to become the Top 3 brand in the Chinese men's skincare market within five years. In May, Unilever (China) launched its high-end men's skincare brand EB39, which combines a trendy metaverse concept. The brand name means "Realizing skin self-iteration in 39 days", while EB stands for "ENERGY BUFF". The brand claims that EB39 is the first affordable luxury men's skincare brand launched by Unilever in China, as well as the first metaverse brand and the first algorithm-driven skincare brand. Unilever's iPredict big data tool is used to enable cross-platform digital analysis. At present, the brand's products focus on men's anti-acne, moisturizing and anti-aging, and the main products are the essence categories. Furthermore, L'Oreal, which owns men's skincare brands such as L'Oreal Men and Biotherm Men, has steadily occupied the leading position in the domestic men's skincare market. In the beginning of last year, L'Oreal also began to dip a toe in the water of men's makeup and launched a men's makeup cream, which has achieved good sales. The major beauty giants are interested in the Chinese men's beauty market, because faced with the current situation of sluggish growth and fierce competition in the women's beauty market, beauty giants eagerly want to find potential new growth points. Therefore, the Chinese men's beauty market with huge untapped potential has become the first choice for them to find growth drivers and improve their brand deployment.