Chinese digital technology innovation may be the new opportunity that is attracting many companies to invest and develop in China. 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 Xue Wei, Managing Director of Beiersdorf Group Northeast Asia, to share with us the cosmetic trends in China. CHAILEEDO: What changes in the industry have impressed you in the past year? Xue Wei: The biggest change and common challenge for many industries in 2022 is the impact of the ongoing global epidemic overlaid with geopolitical conflicts. The closed management under the impact of the epidemic has had a major impact on the production of companies, and challenges have been encountered in all supply chain segments of shipping, delivering and incoming materials. The geopolitical conflicts have intensified the global supply chain conflicts, and the global energy supply crisis and the continuous rise of international commodity prices have had an impact on the global industry chain. The good thing is that China has one of the world's most complete supply chains, as well as the world's leading E-commerce market and digital infrastructure. It also provides a better platform for further consumer upgrades in China. And the transportation network in Shanghai is extremely developed, while the industry is highly concentrated. As the situation of the epidemic is getting better constantly, we have made timely adjustments to address these issues well. Under the influence of macro factors such as the epidemic and rising prices, people have tightened their "money bags" and gradually diversified and upgraded their consumption demands. The role of "brand power" in driving consumption is also becoming more and more obvious, as consumers trust more reliable, high-quality brands and products, especially Chinese consumers' brand awareness and identity which is stronger and stronger. Looking at the segmented beauty industry, consumers' demands for maintaining healthy skin and solving skin problems has shifted from simply pursuing ingredients to researching efficacy, and the epidemic has accelerated this trend. The industry will move into an era of efficacious cosmetic management, responding to consumer demands on all fronts, from product development to manufacturing operations and retailing, while transforming to a healthier business structure by segmenting the market and becoming younger constantly. With the new cosmetic regulations launching, it will undoubtedly be more beneficial for us. And for the companies like us that have long adhered to product research and efficacy, to bring our advantages into play while driving the cosmetics industry to flourish. With China's "Carbon Peaking and Carbon Neutrality" strategy in full swing, people's awareness of health and environmental protection is increasing. Organic, natural and healthy ingredients are being sought after and becoming the choice of more and more consumers, and the beauty industry is entering the "Sustainable" era. CHAILEEDO: What strategic development plans can Beiersdorf share for 2023? What kind of exploration and innovation will be carried out in the beauty field? Xue Wei: "Digitalization and Innovation" are the two cores of Beiersdorf's strategy in China, which are manifested in two aspects: internal and external. Internally, we use big data to achieve faster decision-making. Currently, Beiersdorf has established three centers in Shanghai, namely the Innovation Center, Marketing Center and Manufacturing Center, which is a flexible supply chain that accelerates the production efficiency and decision making throughout the chain, making B TO C, M TO C and C TO M possible. Through the construction of digital infrastructure such as CRM, data-based management platform and content management platform, we help enterprise employees to improve the efficiency of work and decision making, thus enhancing the effectiveness in reaching consumers and communicating with them accurately. In addition, we insist on continuously bringing in innovative and high-quality talents, and have the idea of "closed-loop management, digital empowerment, and agile iteration", so as to better implement the concept of "providing better products and services to consumers". Outside the company, Beiersdorf has used digitalization to create many brand success stories. Through digitalization, Beiersdorf has helped its Nivea brand enhance its personality and transform into a younger brand, and has built a complete brand matrix for Nivea to better serve consumers with skin care needs. In terms of innovation investment, to adapt to the complex and changing Chinese market, we have landed the world's second largest innovation research center in Shanghai after our headquarters in Hamburg to customize new products for Chinese consumers. Relying on advanced research technology from Germany, local digital innovation and an eco-system co-created with consumers, Beiersdorf is continuously developing the market in the facial care sector, represented by the Nivea brand's LUMINOUS630 light spot whitening series, and hopes to introduce more high-quality skin care products that meet consumer needs. At the same time, Beiersdorf is focusing on and deepening its commitment to sustainable product development, constantly increasing its investment in green innovation in product formulation and packaging to balance environmental protection, social responsibility and economic success. In addition to using sustainable certified palm oil and its derivatives as raw materials in R&D and production, all product packaging is developed and integrated in a green and sustainable way with the 4 "R" perspective of 100% refillable, reusable or recyclable, and using recycled materials, optimizing the design to achieve lightweight and low-carbon packaging. CHAILEEDO: Several international beauty groups have changed their strategy from "invest in China" to "to invest in China". What do you think of this change? What investment opportunities do you see in the Chinese market? Xue Wei: China's fast-growing domestic consumer market is an important growth opportunity for us in the context of economic recovery. Chinese consumers' rapidly growing demand for high-quality, personalized products naturally brings us huge room for development for foreign companies. Looking into the future, consumers' demands for products will change significantly, and they will continue to increase the demand for product efficacy, which will make technological skincare and precision skincare become the norm in the future. At the same time, we have identified the digital technology innovation in China as an invaluable opportunity, which is an important factor in attracting many companies to invest and develop in China. Nowadays, the "Technology + Skincare" model has become an important future direction for the industry. Therefore, in terms of digital construction, Beiersdorf has been improving the digital infrastructure and proactively building its digital talent pool with digital platforms and tools. Strengthening cooperation with Chinese companies in innovation, especially in the digital economy, is undoubtedly of great importance to the company. China sets clear targets for "Carbon Peaking" by 2030 and "Carbon Neutrality" by 2060. As one of the world's leading countries in green development, Germany has mature development concepts and technological advantages in this area. The two sides can further develop new growth points for cooperation. CHAILEEDO: Compared with other foreign companies, what is the most important feature of Beiersdorf's localization? In the face of the current uncertain environment, what are the latest adjustments and achievements? Xue Wei: The characteristics of Beiersdorf's "Localization" in China are to start from consumers' needs, accelerate digital transformation and innovation, implement sustainable development, rely on the Group's 100-year strong product development technology, and make use of C2B innovation capabilities to tailor more products to meet Chinese consumers' needs. For one, Beiersdorf continues to strengthen its localization in China. We start from consumers' needs and combine digital platforms and e-commerce platforms to create and manage the entire chain for consumers, including their purchasing behavior and loyalty to the brand, so as to further enhance the brand's reputation. Secondly, Beiersdorf's localization in China is committed to creating a digital innovation ecology. Beiersdorf has launched an in-depth cooperation with Tmall New Product Innovation Center (TMIC) to accelerate the conversion of C2B model and co-create digital new product development, such as the Nivea Men's Natural Power Series and Nivea Double Tube Body Essence Series, etc. as a result. In addition, we will continue to maintain and enhance the construction of the digital ecosystem on social media platforms such as WeChat, Weibo, Xiaohongshu and Douyin to achieve ecological co-creation of content. Thirdly, we are committed to green and sustainable innovation and respond to the national "Carbon Peaking and Carbon Neutrality" goal. In China, Beiersdorf has carried out a series of sustainable development plans. We put "green and low-carbon" into the whole chain of business activities, including R&D, production, supply chain, sales and consumer interaction, in order to demonstrate a leading global beauty group's support and action for China's "Carbon Peaking and Carbon Neutrality" construction. We will further increase R&D investment in green innovation for product formulations and packaging, and customize more environmentally friendly products. Beiersdorf will also introduce more products related to "climate neutrality" and resource conservation, thus creating interactive channels with Chinese consumers to save energy and reduce carbon. As a global beauty group, Beiersdorf will continue to innovate in the midst of dynamic change, building new moats and even reaping new benefits from change. CHAILEEDO: How does Beiersdorf see and respond to the challenges of China's up-and-comers? Xue Wei: Beiersdorf respects every rising star and we look forward to working with them to take the industry to a new level. Not only do they have youthfulness and innovation as their entry point, they have also experienced the complexities of the Chinese market and bring new practices and insights to the industry. Whether it is an up-and-coming brand or an established group, there is room for us to break through in our own track, so we will continue to focus on building our brand matrix. Beiersdorf is a group and brand with "long-termism". We focus on the long-term development of skin ecology and strive for it. There is no better example of this philosophy than the transformation of our Nivea brand, which is "to sink its heart and soul into the brand and look to the longer term". As a century-old German skin care brand, Nivea has never lacked the qualities of stability, longevity and rationality, marked by the color blue. But when we face the Chinese market, where "young people win sales", we need to create a more dynamic, soft and tense brand personality for Nivea. We have spent the last year and a half advancing our women's skincare portfolio, continuing to invest in innovation, and advancing our online channels and marketing to achieve a more healthy brand structure. The Chinese skincare market has tremendous potential for growth and we are ready to take on all kinds of challenges in the skincare space and hope to grow together with the industry. Secondly, with the further standardization of the development of the Chinese cosmetic industry, the competition in the industry tends to be healthier and more benign. In addition, Chinese consumers are not only experts in skincare, but also a group of global leaders and innovators, and we hope to grow together with them in the future.

Repairing, soothing, acne, anti-aging, and spot whitening are still the efficacy of the more concerned consumers. With the end of the anti-epidemic, the domestic consumer market will gradually clear up. Beauty brands have also started to push new products, an all-out fight for the new year. Through these new products, we get a glimpse of the cosmetics trends in 2023. So this year, which categories track, efficacy and ingredients will become potential stocks? Oil-based skin care is a big hit, tapping into small category opportunities According to relevant data from brokerage research reports, in 2023, national skin care products will mainly focus on essence, creams, eye creams, masks and other high-level categories to break through, in addition to a number of listed companies to cultivate sub-brands to usher in a breakthrough, will gradually open the local beauty group brand matrix development. A more obvious trend in the category is oil-based skin care which is expected to usher in a wave of high tide this year. First of all, existing brands such as Chanel, ZHUBEN, forest cabin, etc. are increasing their oil products by upgrading or pushing new products, even PROYA also released an essential oil product for the first time; Secondly, oil products are also being subdivided, from face and hand care to body care field, such as the Fanxishop launched a product named Refreshing Scented Hand Essence Oil at the end of 2022 which is focused on oil hand care. According to the "White Paper on Skin Care Hotspots in the Post-Epidemic Era" released by CBNData, oil-based skin care products are favored by contemporary consumers and continue to expand online, and will be in a high growth phase in 2022. CHAILEEDO notes that oil-based skin care has been a high topic of conversation on social platforms, so going into 2023, new and old "players" will choose to make a push on this track. In fact, on another level, the focus on oil products is also related to the "emotional economy". The combination of emotional benefits and aromatic scent of essential oils is not only for skin care, but also for emotional healing. New concepts and products are emerging around "emotions". At the Expo 2022, Amore Pacific shew its bath bomb, a personalized service called "Mind-Linked Bathbot," which is a bath bomb that is customized based on a person's emotional feedback. In addition, international companies such as Evonik, Givaudan, Symrise and L'Oreal are exploring the development of emotion visualization technologies, combined with technologies such as EEG and skin testers, to assist in product development. It is predictable that both ingredient manufacturers and brands will pioneer innovation in emotion-based cosmetics. Repairing, soothing and anti-aging effects continue to be popular In addition to category breakthroughs, "efficacy" is also a very important point for Generation Z. As people's work and life pressures increase, coupled with environmental changes, improper use of cosmetics and other factors, people's skin problems continue to increase, their demand for healthy and effective skincare is growing, and efficacious skincare products have seen rapid development. Specifically in terms of efficacy, repair and soothing, acne, anti-aging, and spot whitening are still the efficacy that consumers are more concerned about. For example, the popularity of anti-aging has continued to rise. 2022 First half anti-aging skin care products in the Douyin, Kwai sales exceeded 10 billion, an increase of 189% year-on-year, high-end line increased by 270%, and the public line increased by 147%. Among them, the fastest increase in anti-primary aging discussion shows the trend of anti-aging lower age. Young anti-aging consumer groups have huge market potential. Anti-aging-related buzzwords include "antioxidant" and "beauty device". In addition, according to CHAILEEDO Intelligence statistics, 56.02% of consumers use anti-aging skin care products three times a week or more, of which 35.64% use anti-aging skin care products every day. Meanwhile, more than 23% of consumers have decided to increase their beauty spending in the first quarter of 2023, and 24% of this group has a clear preference for pursuing anti-oxidation and anti-aging. This all goes to show that using anti-aging skincare products is becoming an important part of people's skincare routine. "Next year's efficacy is still mainly centered on users' universal pain point claims, such as anti-aging, allergy relief and whitening," said Jiang Shubo, the brand manager of SKINNOS, as well. In addition, the ACE product of SKINNOS, "Daily Duplex Essence" will be upgraded with core ingredients and formulations next year, and two types of essence water will be launched according to dry and oil-sensitive skin types, whose main effect is to soothe and repair. The head of the marketing department of NOX BELLCOW also told CHAILEEDO, "NOX BELLCOW will mainly promote soothing and anti-aging effects in 2023, because the mask and skin care products have this trend, and T-zone care and other small categories also have growth." With the upgrading of skincare awareness, consumers' concept of efficacious skincare and their desire to purchase efficacious skincare products will gradually increase, and driven by the rapid growth of demand, the penetration of efficacious skincare products in the skincare circuit will also continue to rise. The "Stars of tomorrow" in ingredients According to i Research, in terms of active ingredients and formulations, niacinamide, sodium hyaluronate, and vitamin E are ranked among the TOP 3 in the list of efficacious ingredients in 2022, while the list of potential ingredients includes retinol, PCA zinc, astaxanthin, etc. According to the incomplete statistics of CHAILEEDO, many star ingredients emerged in 2022, including retinol, bakuchiol, ceramide, salicylic acid, glycyrrhiza glabra, centella asiatica, etc., as well as specialized ingredients such as hydrolyzed conchiolin protein(HCP) and HiMurchaSin. Ocean Engine's "2022 Beauty Ingredient Trend Insight Report" has pointed out that beauty makeup that regarding ingredients as a main point of communicates is more likely to become explosive. On the sales side of Douyin beauty products, the growth rate of GMV of beauty ingredient products as well as the growth rate of product sales are relatively fast, reaching 366% and 367% respectively. From the consumer point of view, the "ingredient party" in previous years and now the "efficacy complex" in the skin care industry is a "sensible consumption wind", thanks to the change in consumer awareness. This forces factories and brands to start with the ingredients of skincare products, focus on the source of the "ingredients" and the technology behind them, and seriously make good products in order to truly gain the recognition of consumers. "Next year, we are more optimistic about the use of whitening and antioxidant ingredients, such as tranexamic acid, ferulic acid, polypeptide, GHK-Cu, etc." Li Fen added. In addition to the current popular efficacy ingredients, Chinese characteristics of plant raw materials ingredients are also deeply concerned by the market, which are widely used in cosmetic products. In the second half of 2022, the domestic well-known ODM company NOX BELLCOW, with a keen market "sense", has locked the "potential stock" of matsutake, starting from the creation of Chinese ingredients, to set up a game with precious ingredients - "matsutake". This is a cross-border cooperation with the precious ingredient - "matsutake". Qiu Xiaofeng, Vice President (R&D) of NOX BELLCOW, said that the research found that the matsutake alcohol, matsutake polypeptide, matsutake polysaccharide and other components in the pineal extract have moisturizing, antioxidant, soothing and whitening effects in cosmetics, and have a wide range of application prospects in cosmetics, with great potential for development. In general, in the post-epidemic period, the meaning of skin care is no longer simply "to be more beautiful", but to be healthier, so the ingredients and products should be developed to a higher level.

New concepts such as micro-ecological skin care, sustainable fashion, and edible makeup and food have been recognized by more than 40% of consumers in the past two years. As the difficult year of 2022 comes to an end, the anticipated year of 2023 has kicked off. Between farewell and rebirth, beauty industry people who have been suppressed for too long are starting to wave their fists in the air and ready to do something big. And how to snatch back the lost 3 years of business opportunities in 2023 has become a real problem for the industry. Recently, Chaileedo released the "China’s Beauty Consumer Trends Report (First Quarter of 2023)" (here and after referred to as the "Trends Report") through insight into consumers' beauty consumption behavior in the past three months, refining and summarizing nine major trends, in order to refer to the future development of the beauty market and help the industry create a better 2023. After skin care, oral cleaning care is sought after In the past 2022, the epidemic caused less travel, restricted consumption scenarios and delayed express delivery capacity, which hit the cosmetics retail market even harder. According to the latest data released by the Domestic Bureau of Statistics, from January to November 2022, the total retail sales of the cosmetics category were 365.2 billion yuan, a decline of 3.1% year-on-year. Correspondingly, some consumer habits have quietly changed. The Trend Report shows that the purchasing habits of over 37% of consumers have shifted to short-term or single purchases of large quantities of beauty products for emergencies, and hoarding has become a new habit for many consumers. As a result, online high-priced beauty consumption and unit prices both increased significantly in the fourth quarter of 2022. Take Douyin as an example, the Top 5 goods of Douyin beauty sales in November are all famous brand sets, and the average minimum price is close to 2,600 yuan. During the Double 11 period, sales of products in the price segment above 1,000 yuan in Douyin accounted for 25% of the total sales of this category. Taking advantage of this trend, major beauty brands launched "Collection Highlights Set", "Must Buy Gift Box" and other promotional and limited preferential products in the form of star CP sets, new and old mixing, and quickly achieved sales conversion. However, the hoarding behavior also to a certain extent prepays consumers' beauty investment. According to the Trend Report, over 37% of consumers believe that their beauty spending will decrease in the first quarter of 2023 due to the Double 11 and Double 12 promotions, the Chinese New Year holiday, and logistics disruptions, and nearly 40% believe that beauty spending in the first quarter of 2023 will be the same as the previous quarter. Nevertheless, the Trends Report also shows that 23% of consumers still believe that they will increase their beauty consumption investment in the first quarter of 2023, and there is still considerable upside space in the market for the next quarter. In addition to the most popular skin care categories, the Trends Report shows that nearly 12% of consumers will increase spending on oral cleaning and care in the first quarter of 2023, and about 1 in 10 say they will increase spending on body cleansing and care, shampoo and hair care and development. Custom cosmetics become an opportunity track From the brand side, the Trend Report shows that in the fourth quarter of 2022, among the top 10 beauty brands that consumers often buy, only four domestic brands: CHANDO, Proya, Winona and INOHERB. Nearly 20% of consumers choose L'Oreal, and more than 14% choose Estee Lauder, which is much higher than that of other brands. At the same time, consumers still prefer international brands beauty. The Trend Report shows that more than half of consumers plan to buy beauty products from famous international brands in the first quarter of 2023; more than 1/4 of consumers plan to buy beauty products from famous domestic brands; and less than 14% of consumers plan to buy beauty products from new and strong domestic brands. So, in this consumer background, what are the opportunities for domestic brands to overtake on a bend in 2023? According to the Trend Report, new concepts such as micro-ecological skin care, sustainable fashion, and edible makeup and food have been recognized by more than 40% of consumers in the past two years. This means that by cutting into these emerging tracks and covering unmet consumer needs, domestic brands can prioritize the minds of such consumers, thus occupying the head of the blue ocean track consumer market, and at the same time giving the brand a positioning that impresses consumers. It is worth mentioning that custom cosmetics, beauty devices and oral care have become new industry hotspots and growth points. The Trend Report shows that 65% of consumers are willing to pay a premium when buying custom cosmetics, with nearly 40% of consumers willing to buy custom cosmetics when the price is 20% higher than similar products. In fact, major beauty groups clearly see the opportunity for customized cosmetics and are scrambling to lay out custom directions. For example, L'Oreal Group launched the YSL Electric Wave Wearing Fragrance Room, Henkel launched the first B2B2C ultra-personalized professional hair care brand SalonLab&Me, COSMAX opened the Acne Skin Essence customization activities, and cdf Haikou International Duty Free City also joined hands with more than 800 international and domestic famous brands to provide exclusive customization services for consumers. According to the Trend Report, "Basic skin care products are currently the first choice of consumers in the field of customized cosmetics, with consumer preference accounting for over 40%. Scalp care products follow closely behind, with nearly 20% of consumers interested in such customized cosmetics." Anti-aging category continues to rise in popularity Of course, custom cosmetics are still a track of opportunity to be developed, with mature markets being the main consumer target. Among these, the anti-aging category has seen the fastest increase in buzz, especially among young anti-aging consumers, who have huge market potential. The Trend Report shows that 56.02% of consumers use anti-aging skincare products 3 times a week or more, of which 35.64% use anti-aging skincare products daily, making anti-aging a part of consumers' daily skincare routine. Another example of CS channel sales from January to November 2022, 9 of the Top 20 hot selling skincare items have anti-aging effects such as firming and wrinkle reduction. In addition, the anti-aging group shows a clear trend of youthfulness. The Trend Report survey found that the percentage of consumers aged 26-30 who are concerned about skin aging is as high as 90.58%, and the main demand of more than half of consumers is to strengthen the skin's muscle base to resist primary aging. Because of this, in the fourth quarter of 2022, many cosmetic companies launched new anti-aging products based on existing ones, such as L'Oreal Paris launched a new Black Gold Essence, HBN launched Super A-alcohol night cream, COSMAX won the Prime Minister's Award of the Korean Technology Award Department for "Anti-Aging Cosmetics Using Piezoelectricity", all of which are seizing the opportunity of the race track. The brand digs the anti-aging track also to some extent feeds the upstream industry, many popular anti-aging ingredients are sought after by companies. According to previous statistics, since the implementation of the new regulations, 45 new cosmetic ingredients have been filed, including 10 new ingredients for antioxidants and 4 for anti-wrinkle agents. Overall, the beauty market in 2023 is still full of opportunities. For beauty companies, on the one hand, to seize the popular track, or even go ahead of consumers to meet the diversified market demand; on the other hand, in the marketing end, need to reach more consumers, so as to establish a deeper emotional link with consumers; at the same time, in addition to continue to dig deep in the growth potential of E-commerce, but also to pay attention to the offline glow of new opportunities, so as to expand the product radiation. Only in this way, everything is possible.

China's functional skincare market is growing rapidly, and the category is segmented, moving from basic skincare to sophisticated skincare. 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 Huang Yongmin, President of Amore Pacific China, to share with us the cosmetic trends in China. CHAILEEDO: What changes in the Chinese cosmetic market have impressed you deeply past year? Huang Yongmin: The Chinese market is a very unique market in the global beauty industry, with a very important position in three major aspects: economy, society and culture, and policies and regulations. The Chinese cosmetics market is promising and will be a golden stage of development for the cosmetics industry for a long time to come. In 2022, we witnessed the strong resilience shown by the Chinese beauty market. As consumer needs become increasingly diverse and segmented, we find younger Chinese consumers paying more attention on skin care, including anti-aging and whitening. Developed social networks have also made cosmetics product information more transparent, which has also given rise to a group of KOLs and skincare hobbyists who research product efficacy. The Chinese efficacious skincare market is growing rapidly, and the category is segmented, moving from basic skincare to sophisticated skincare. Amore Pacific has also launched many efficacy products, such as the lip mask developed and launched by its brand LANEIGE, and the hair loss prevention efficacy shampoo and steam hair mask launched by RYO, which have become the apple of many Chinese consumers' eyes. CHAILEEDO: Many international beauty groups have changed their strategy from "invest in China" to "to invest in China", What do you think about this change? What investment opportunities do you watch out for the Chinese market? Huang Yongmin: As the world's fastest growing and second largest cosmetics market, the Chinese market shows tremendous vitality and potential. We believe that shifting from "invest in China" to "to invest in China" and promoting a "win-win" approach will provide a broader development space for companies and help strengthen the overall competitiveness and innovation of the Beauty Group in China, and truly gain market recognition to develop more beloved products for Chinese consumers. Since we entered the Chinese market in 1992, we have been building a diversified brand strategy and have introduced ten brands that have been recognized by the Chinese market. At the same time, we have completed the first and second phases of the Amore (Shanghai) Beauty Park in Jiading District, Shanghai, which integrates production, R&D and logistics to flexibly respond to the diverse needs of Chinese consumers. Amore Pacific Research Institute in Jiading, Shanghai, will also focus on local product development and local consumer clinical research in the future, further expand communication with Chinese academia, venture capitalists and external institutions, strengthen cooperation, and explore new opportunities for technological innovation to develop products that meet Chinese consumer needs and are suitable for Chinese consumers. Over the past few years, we have listened to the needs of Chinese consumers in a variety of ways, and have partnered deeply with groups such as Alibaba and Jingdong to launch a number of products customized for Chinese consumers through C2B innovation. CHAILEEDO: What are the category opportunities for cosmetics to be explored in 2023? Huang Yongmin: With the changing social environment and the rise of social media, Chinese consumers have increasingly demands for functional skincare. More and more concepts such as morning C and evening A and sensitive skin care are rapidly entering the vision of Chinese consumers, and the consumer mindset for functional skin care is gradually maturing. We believe this track still has very ample space for growth in the future. The combination of sustainability and beauty has become an industry consensus, and many cosmetic companies are releasing medium and long-term sustainability strategies. Consumer demands for environmentally and socially friendly products is increasing, and sustainability is a greater impact on purchasing decisions. In our newly released "Top 5 Sustainability Commitments for 2030", we have committed to reflect 100% of environmental friendly attributes in new products and to develop brand activities that promote sustainable lifestyles for our customers. For example, Innisfree Blue Capsule Cream, which debuted in CIIE last year, is made of renewable and eco-friendly packaging and plastic-reduced replacement packs; the Little Blue Shield series from LANEIGE is Carbon Trust Water Footprint certified and packaged in FSC certified wrapping paper; and the cap and body of primera Soothing Repair Moisturizer are made of renewable plastic and glass, respectively, and the instructions are printed on the box to reduce unnecessary consumption of resources. CHAILEEDO: What is the new breakthrough point for brands when traffic is getting more and more expensive? Huang Yongmin: In the era of increasingly expensive traffic, it is more necessary for brands to return to the product itself, through technical research and market research, to launching beauty brands and products that meet consumer needs, and solve consumers' pain points and with high quality. In addition, it is also important to optimize the quality of service, refine the operation of "private" traffic, so that each consumer can have the best experience. This is exactly what Amore Pacific is all about: putting consumers' needs at the core of everything we do. On the other hand, in order for brands to continue to grow, they have to reach as many new consumers as possible. Today, the online platform is more than just a sales platform, we are gradually shifting it to a composite brand marketing platform that is a "Product Development Center", a "Consumer Research Center", and an upgrade of the entire marketing chain.

The majority of overseas brands have not made much splash after their high-profile official announcement to enter the Chinese market. Take Shiseido's men's skincare brand SIDEKICK for example. Although it has been attracting attention from the outside since it entered the Chinese market with the aura and heat of its parent company, the sales of the brand in its Tmall flagship store can be said to be unsatisfactory. SIDEKICK flagship store sales of a cleansing product are the highest, but only 1000+ people pay for it. There are three other products that show a few hundred people payment, the rest of the number of products payment is only double-digit. Then look at LG Group's pure plain makeup brand Freshian, also with the aura of a well-known beauty group, the starting point of heat and attention is a cut above the general brand, but so far, the brand's performance can be described as mediocre. Freshian flagship store shows that the store is currently online 8 product links, despite being in the Spring Festival holiday purchasing campaign, but the highest sales of a single product link shows 400+ people paid, the number of people paying for one product is in double digits, and the rest of the products show 1 person paid or 0 people paid. Even the brands that are backed by the head beauty group are in such a situation, so the situation of other overseas brands can be imagined. For example, Huda Beauty, a world-renowned online beauty brand that had entered China in a high profile manner, has not withstood the further test of the market after a short period of glory and has recently withdrawn from the Chinese market. So, why do some overseas brands enter the Chinese market will be "not-acclimatized"? "Overseas brands will face up to some problems after entering our country. The first is brand recognition. Unless it is the international head of the big brands, general overseas brands are difficult to quickly obtain the trust of consumers. Second is the supply chain response speed. Most of the supply chain of overseas brands are still abroad, and for domestic consumer channels, the production cycle and logistics cycle of products cannot meet the demand in time. The third is related to the regulations. Domestic regulations are getting stricter and stricter, and the filing and labeling requirements for overseas brands are very hard and cumbersome."Zhang Xiaoen, marketing director of Guangdong Brundo, said. Zhang Xiaoen further said, "The survival space of niche overseas brands in China is not much, mainly because the domestic head brands have basically crowded the consumption market of mid-range channels, and it is difficult for some overseas niche brands to compete with the domestic head brands without brand premium. In this regard, a well-known cosmetic brand responsible person said, "Any brand is not willing to give up the Chinese market, but at present, it can be said that the Chinese market is a stage for Europe and the United States high luxury, big brands, domestic products. The introduction of some small and unknown brands, can not gain the trust of consumers, naturally will not be out of the circle." And Fan Jun, general manager of Shanghai Lanmeiyi Cosmetics Co., Ltd, believes that how overseas brands develop after entering the Chinese market has a lot to do with whether they can fully integrate into the Chinese market. Some brands enter by trade license, some by investment, and the degree of adaptation to the local market is different for different entry methods. But in general, overseas brands entering China need to do a good job of localizing their operations, adapting to local needs and finding their own brand's corresponding consumer groups. The key to getting out of the circle lies in whether they can adapt to the Chinese market and the needs of Chinese consumers, and whether they can solve the pain points of local consumers, which should be the same in any market. So how should overseas brands which are entering the Chinese market develop? An industry source with more than ten years of experience in brand operations believes that overseas brands in the Chinese market first need to build trust in the brand, can enter from niche categories or niche efficacy areas. Secondly, it is recommended that sales localization, and domestic sales teams with mature channels and experience in handling. Finally, to gradually localize the supply chain, we can use foreign technology, raw materials, etc. to repackage in China, and solve the problem of rapid response and delivery of channels in terms of the response speed of the supply chain. "The most appropriate way is finding a strong ally inside the country, such as finding a trusted team to operate directly as an agent. But this is also a certain risk for the brand side. There may be a situation that the overseas brands will be abandoned when the local partners are raised, because it is not difficult for the domestic agency channel operators to find a replacement brand at any time, "Fan Jun said. It can be seen that after entering the Chinese market, localization is the key. The cake is huge, but how to eat and whether to eat, are the overseas brands that want to as well as have entered the Chinese market must think through the problem.

Chinese beauty brands have stepped up R&D to improve the bad image of low-price and inferior-quality Chinese brands. Once, "imported brand" became a byword for "high quality" in China, Chinese brands mostly win customers with acceptable pricetag, even amid the trend of rising Chinese brands, they still can't break away from the "bottleneck" dilemma in cosmetic raw materials(heavy reliance on developed countries in core technologies). It is for the very reason to reverse the tainted image of Chinese brands in consumer, increase the brand sustainability, Chinese brands also shift focus on building R&D center and product laboratory. In fact, many long-established Chinese brands have paved their own R&D road very early. Shanghai Jahwa, for example, set up the R&D Center in the late 1980 s to provide technical support for products and innovation. At present, the R&D Center has been developed into a scientific research platform with a complete R&D system, which involves product creativity, R&D, consumer research, product basic research and other fields. As of September of this year, Shanghai Jahwa had 396 valid patents, of which 22 were granted PCT patents. In addition, Laf and PROYA were established earlier. In early 2004, Laf established Laf Daily Chemical International Research Center in cooperation with American Arch Chemicals Co., Ltd., IFF, Dow Corning Co., Ltd. and first-class chemical research institutions. PROYA established its own R&D center in 2008, "Scientific Skin Care Laboratory", which is equipped with plasma emission spectroscopy, high performance liquid chromatography, integrated video and optical measurement system, VISIA facial image analyzer and other scientific equipment. In 2021, the PROYA established the International Academy of Science, based on its current foundation, focusing on dermatological research and the use of a combination of independent R&D and external cooperation. According to the incomplete statistics of the CHAILEEDO, listed companies like Shanghai Jahwa, BTN, Bloomage Biotech, Chicmax, Uniasia, and to-be-listed companies all have done a lot of work in R&D. For the non-listed companies, such as Jala Group,  Pechoin, and even the innovative brand Florasis, UNISKIN, PMPM, etc., have built their own platform for the development of the system, or rely on the establishment of cooperative laboratories by scientific research institutes to build the unique R&D system. From the regional distribution of these R&D centers, Shanghai, Guangzhou and other first-tier cities with abundant human resources and rapid development of cosmetics industry are the first choice of major cosmetics enterprises. However, there are also some enterprises that develop their own products by innovating local products. For example, BTN has set up R&D centers in Shanghai and Yunnan, and in 2021 has also led the establishment of Yunnan Characteristic Plant Extraction Laboratory, focusing on Yunnan characteristic plant industry and functional skin care products R&D. In June, Jala Group set up the Himalayan Research Center in Linzhi, an eastern part of the Himalayas, to undertake research and development of natural plants, glacial water, minerals and microorganisms with Himalayan characteristics. In a nutshell, the brand of Chinese goods is no longer a byword of cheap and inferior quality because more and more Chinese goods have brought forth their exclusive technology, raw materials. The R&D strength indicates the company's viability.

China has long become an major battlefield for all major beauty groups, international beauty giants have set up their own local R&D departments to seize the Chinese market. Recently, Estee Lauder's China R&D Innovation Center was officially opened, this is the third upgrade of Estee Lauder China R&D Center. It is the world's first comprehensive R&D Center that offers a mix of conception, insight and clinical medicine. It is par for the course for the beauty giants to deploy R&D centers in China, and many of the international groups established their own units at the start of their entry into China. In 2000, after recognizing the enormous potential of Chinese cosmetics market, many international beauty groups began their blueprint on R&D center on the basis of the R&D department to further expand the Chinese market. Procter&Gamble was the pacesetter of establishing R&D center. In 1998, aiming for geographical proximity to Beijing, the economic, cultural, and talent center at that time, P&G moved its R&D unit in Guangzhou to Tsinghua University Science Park and named it Procter&Gamble Technology Beijing Co., Ltd. (Procter & Gamble Beijing Technical Center). Now, this brand has been here to stay for 34 years. It is not just Procter&Gamble that is attracted by Beijing's rapid-developing economy and culture. In 2001, as the first international beauty group to enter China, Shiseido established Shiseido China Research Center Co., Ltd. in Beijing to further meet the needs of Chinese customers. Afterwards the center has been upgraded several times and opened up a branch in Shanghai in 2015, embarking on support for the R&D of Urara, Pure&Mild and Aquair. Beyond that, L'Oréal, Estee Lauder, Cosmax and other international cosmetics enterprises established R&D centers in China in 2004-2005. For example, Estee Lauder set up China's first R&D center in Shanghai in 2005, launching its first product, M·A·C LIP SCRUBTIOUS GOMMAGE LEVRES, within three years. Since then, the center has been responsible for Estee Lauder Super-pomegranate series, Cyber White Extra Brightening series, Clinique Dramatically Different moisturing Lotion series, Hydrating Supercharged Concentrate series, and Estee Lauder's air cushion powder base, Clinique Dramatically Hydrating Different Jelly and other hot-selling products. In fact, the transformation of R&D centers also witnessed the evolution of these international beauty products and continuous expansion of market sway. This December, Estee Lauder upgraded the R&D Center and moved it to the Shanghai Caohejing Development Zone, naming it "Estee Lauder China Innovation R&D Center". At present, the Estee Lauder Chinese team has applied for more than ten international patents, covering Chinese herbal medicine formulations, extraction, personalized diagnosis, powder processing, new material development, new packaging design and so on. The P&G Beijing R&D Center has become the largest R&D center in Asia, and in 2021 P&G set up the Greater China Intelligent Technology Innovation Center in Guangzhou, one of the three largest global smart technology innovation centers, and the first in Asia to specialize in full-link technology innovation in smart manufacturing and supply chains. In fact, from the past development of Chinese cosmetics market, we can see that the investment of all major international beauty groups in China R&D center is accompanied by the continuous expansion of Chinese cosmetics market. At present, China has long become an major battlefield for all major beauty groups. At this year's CIIE, Zeng Xiwen, the president of Unilever's China Public Affairs Department, said the Chinese market is one of Unilever's three major markets in the world. Estee Lauder has also noted that China has become the "Second Home Court" of Estee Lauder Group.

It is the first venture capital investment by L’Oréal in the metaverse & Web3 space. （Credit：Digital Village） Beauty giant L’Oréal’s venture capital fund BOLD (Business Opportunities for L’Oréal Development) has invested in Digital Village, a metaverse-as-a-service platform and NFT marketplace for brands, creators, and communities. This move marks the first venture capital investment by L’Oréal in the metaverse & Web3 space. This investment is also the first made by BOLD’s Female Founders initiative launched in 2022. Founded in 2021, Digital Village is described as a brand positioned as a leading digital and sustainability consultant, offering new and scalable technologies for creating interactive digital identities and assets in virtual worlds. Digital Village’s Advisory Board counts founders and top executives from PANGAIA, The Sandbox, and Wave. “The company revolutionizes commerce and community engagement by equipping brands and creators with the tools to build captivating, immersive virtual experiences in the metaverse,” according to an announcement shared first with WWD. “As L’Oréal continues to explore and define what beauty means in Web3, we seek to work with the most promising startups who adhere to the highest possible visual and technical standards. We are excited to be partnering with Digital Village, whose solutions will be powerful enablers for our brands and whose ideals of sustainability, accessibility, and interoperability in the metaverse or Web3 are ones we share,” said Camille Kroely, Chief Metaverse & Web3 Officer at L’Oréal. “We are excited to be backed by BOLD and look forward to collaborating with L'Oréal to revolutionize the beauty industry through the creation of cutting-edge virtual experiences for L'Oréal's renowned brands. “said Evelyn MORA, Founder and CEO of Digital Village. “Together, we are setting the bar for beauty in the metaverse and Web3, pushing the boundaries of what is possible and setting a new standard for the industry to follow.” Source： L’Oréal

FRÉ Skincare is a skincare brand and is a solution for active women (women who work out), which is a niche category in skincare. Why does FRÉ Skincare want to provide products for this group of consumers? The background is that a trend in the US is called wellness. It started in 2014 when wellness and activity became a religion in the US. FRÉ skincare's first market was the US market. When they analyzed consumer behavior, they found that these women are attracted by activities of workouts and a lot of consumer goods are geared toward them. They also find that these part of women have skin issues when they work out. So FRÉ skincare started to imaging what would be the best possible skin care for them. CHAILEEDO invited Michael Azoulay, Co-Founder & Co-CEO of FRÉ Skincare, to share the experience of building FRÉ Skincare and thoughts about the beauty industry. CHAILEEDO: Can you share your thoughts when you want to create FRÉ Skincare? FRÉ skincare is a solution for active women (women who work out). The idea was to occupy this niche that became more and more relevant in the cosmetic industry. CHAILEEDO: How would you describe your brand vision? At first, we focused on active women. But now we extended it to active people. Our vision is to be the first scent and skincare solution for your active life by creating scent care and skincare products. And we are building a strong social movement because our DNA is pretty much socially oriented. We are very active in the woman of powering movement. So we are contributing to providing the best skincare possible to those active people. CHAILEEDO: At first, Fre Skincare first focused on women who work out. What are the characteristics of such consumers? Such consumers are more connected to Clean Beauty. What they want are ingredients that are fully active and that apply well. We think two things are essential: clean beauty and high-performance skincare treatments, and that's how we build our range of products.. CHAILEEDO: What's the difference between men's and female skin? It's a lot about genetics. At the end of the day, male and female skin and influenced by hormones. But the ingredients that males and females use on the skin are supposed to be the same. Some ingredients that are effective will work both on men and women. CHAILEEDO: FRÉ Skincare launched the new Vitamin C Serum in April this year, which is a new sector. Why do you want to launch this product? Because we provide sun protection and skin care solutions, especially focusing on sun protection. One of the main damage to the sun's skin is dark spots and pigmentation. We wanted to create an efficient product that will fight these problems. Vitamin C is game-changing in this category so it's part of extending sun care. It is a great ingredient for fighting dark spot and eye pigmentation which is things that are outcomes of exposure. CHAILEEDO: FRÉ Skincare engages Talia Sutra, one of the most famous yoga ambassadors in Israel. Why would FRÉ Skincare want to work with her? We are looking for famous people in their category of sport. So we have YOGA teachers, Pilates teachers, and so on. One of the sports that are very popular in the US and Europe is yoga. The reason that we made the partnership with her is that we are very aligned with activity and we are very aligned with yoga. The idea from the very beginning is to work with those professionals. CHAILEEDO: FRÉ Skincare’s ingredients are clean, vegan, and cruelty-free. Do you think clean beauty is the trend of future cosmetics? I think it is the trend of the present cosmetic. Clean Beauty is something that is a must-have today but it's not enough. A brand should not do clean for clean. You should first realize what your brands want to perform. Take FRÉ Skincare as an example, we achieve reducing of dark spots and eye pigmentation, and other effects. Then we decide what ingredients I will use that are compatible with Clean Beauty. Clean is a meaning for us but not an objective. CHAILEEDO: Does FRÉ Skincare intend to enter the Chinese market? At what time? Through which channels? There is no date when FRÉ Skincare to enter the Chinese market. Because it's not our focus right now. But it is definitely the largest market in the world so no skincare company that is developing in itself would not see China as one of the main targets for the next coming two to three years. Although we don’t have the exact date, we are thinking about how to do it. I believe that the first step would be online because we know how to do that. Our plan to enter China can be in one year from now. It depends on opportunities. We are already talked with people in China. Still, we need to achieve our goal in Europe first. CHAILEEDO: What is the skincare trend in 2023? I think that Clean Beauty is still in trend. Moreover, hair is a very stronger and fast-growing development category. That’s what I think the skincare trend is in 2023. CHAILEEDO: What are your marketing plans for the next year? Our marketing plan for the next year is doing B2B in the US and expanding our strategy to omnichannel. Being online through our website is not enough. We are doing partnerships with third-party retailers and business partners. This is the next step for the growth of FRÉ Skincare.

By taking on the OEM business for this new skincare line, Kose said it will further deepen its partnership with Aman to support the luxury and extraordinary experience it offers. "Aman Essential Skin", a new skincare line developed in collaboration with Kose and AMAN CO, will be available in 20 countries around the world, including Japan. It will be used in treatments at Aman Tokyo and other Aman spas in each country. According to the report, Aman (China), The Connaught (U.K.), Le Mélézin (France) and Aman Tokyo (Japan) will start to use the AQ MELIORITY of the leading brand Decorté in their facial and body treatments in October, November and December 2021. This marks the official start of the partnership between Aman and Kose. The "Aman Essential Skin" line, which was developed with the support of Kose and OEM, focuses on the damage caused by UV rays, dryness and other external environments that cannot be avoided in daily life around the world. The products contain two precious botanicals, ancient purple rice bran extract and indigo extract, which provide moisturization, firmness and radiance to the skin. And the formula is free of fragrance, alcohol (ethanol), parabens, sodium lauryl sulfate, gluten and other ingredients. The products are priced at $80-$270. By taking on the OEM business for this new skincare line, Kose said it will further deepen its relationship with Aman, supporting the luxurious and extraordinary experience that Aman offers, while serving as an opportunity to connect with new customers and other stakeholders around the world, evolving to become a company with a worldwide presence. Commenting on the partnership, Kazutoshi Kobayashi, Chairman and President of Kose said, "In the two years since we resonated with Aman's worldview of providing unique luxury experiences and working together to create new value, we are honored to have the opportunity to present that value in the form of cosmetics. By experiencing Aman's detail-oriented 'Aman Essential Skin' line, which we developed together, you can enjoy a time of bliss that you have never experienced in your skin or mind." Publicly available information reveals that Aman was founded in 1988 and now has 34 resorts, hotels and private residences in 20 countries around the world. 2018 saw the launch of Aman Skin Care, a skincare line, followed by the launch of SVA, a wellness formula to maintain optimal health, and "Aman Fine Fragrance", a collection of seven fragrances inspired by Aman residences.

On January 11, Estée Lauder Companies announced the launch of its Voice-Enabled Makeup Assistant (VMA) app, a first-of-its-kind artificial intelligence mobile application designed to help visually impaired users apply makeup more easily and confidently. Estée Lauder Companies said the goal of launching VMA is to support the visually impaired community by furthering self-expression and self-empowerment through a relationship with cosmetics. In the UK alone, the National Health Service (NHS) estimates that more than two million people suffer from vision loss. Estée Lauder has developed this application while connecting with visually impaired consumers who need a technology that allows them to apply makeup with greater independence and confidence. The VMA will continue to be optimized and improved in the coming months. The VMA's groundbreaking smart mirror technology is powered by Estée Lauder's augmented reality and artificial intelligence capabilities and was developed using machine learning. The VMA uses voice command technology to assist users with makeup application. The users receive audio feedback and prompts about whether lipstick, eyeshadow or foundation is applied evenly. Through artificial intelligence technology, the VMA recognizes the makeup on the user's face and assesses the evenness and boundaries of application and coverage, while the VMA identifies any areas of the face that may need more accurate application and describes in an audible manner the areas that may need retouching. “We are committed to building innovative technology solutions that make beauty truly inclusive to everyone. We are thrilled to bring the experience of independently applying makeup to the millions of people that are visually impaired,” said Michael Smith, Chief Information Officer, The Estée Lauder Companies. Monica Rastogi, Executive Director, Corporate Cultural Relevancy and Inclusion and Diversity, The Estée Lauder Companies UK & Ireland said “The launch of our Voice-Enabled Makeup Assistant is an important step in our journey towards makeup accessibility for all by removing barriers to engaging with beauty products and services.” The VMA app will be available through the Apple App Store and esteelauder.co.uk in the U.K. The Estée Lauder brand in the U.K. will be the first to adopt and roll out the technology. Estée Lauder aims to launch on the Google Play Store within the year and in other Estée Lauder brands and markets in the near future.

It is reported that the most recent round of financing in the contact lenses occurred in 2021, Moody completed more than 300 million yuan (about $44.3 million) in consecutive rounds of financing, Kilala also received two rounds of financing totaling more than 400 million yuan (about $59 million). On January 10, colored contact lenses brand 4iNLOOK announced the completion of a strategic investment of more than 100 million yuan (about $14.8 million) in SinoPharm-CICC. 4iNLOOK said that this round of financing will be used to invest in the company's supply chain and brand building, while introducing more cutting-edge talent, improving the underlying technical innovation and new product development, and benchmarking against leading overseas companies to build a more professional myopia prevention and control product and service system. According to public information, 4iNLOOK was established in November 2011 and has been deeply involved in the colored contact lenses industry. It has become one of the leading brands in the colored contact lens sector with its advanced product design and online and offline business model. Currently, 4iNLOOK has over 300 color contact lens franchise chains nationwide in China. Contacts are one of the hottest new consumer categories after the epidemic. According to the Tmall Contact Lenses Industry Crowd Insight White Paper, contact lenses have taken up nearly fifty to sixty percent of the contact lenses market, with a compound annual growth value of nearly 50 percent for the relevant market between 2019 and 2022. It is reported that the most recent round of financing for the contact lenses industry occurred in 2021, with Moody completing more than 300 million yuan (about $44.3 million) in consecutive rounds of financing and Kilala also receiving two rounds of financing totaling more than 400 million yuan (about $59 million). The founder of 4iNLOOK, Mr. Chen Yu, said, "We are very pleased with the investment from our strategic investor, SinoPharm-CICC. With SinoPharm-CICC's top brand advantages and industrial resources in the medical health field, the two sides can work closely together in research and development, production and sales to drive the company into a new phase of development. To build comprehensive myopia prevention and control domestic leading enterprise. 4iNLOOK will continue to cultivate the field of myopia correction and myopia prevention and control, relying on the resources of the state-owned key enterprise to build comprehensive myopia prevention and control of domestic leading enterprises." According to official news, SinoPharm-CICC is a state-owned enterprise with rich medical industry resources as well as deep capital advantages. The company carries out investments in high-quality enterprises in the fields of innovative medical devices, innovative drug research and development, innovative medical services, and the digitalization of medicine. As for this investment, Mr. Li Ke, General Manager of SinoPharm-CICC, said, "As a leading colored contact lens company, 4iNLOOK has rich brand resources and marketing system and has a leading deployment in supply chain and new product development. SinoPharm-CICC currently has a deployment of various life and health products and service resources for consumers in China. The investment in 4iNLOOK is in line with SinoPharm-CICC's long-term development philosophy of building a product and service system with SinoPharm-CICC's characteristics and continuously meeting people's needs for a healthy and better life."