KENZO said that after the closure of its Tmall flagship store, consumers can still buy KENZO products at Sephora channels in China. Recently, LVMH's high-end beauty KENZO issued a store closure announcement, announcing that its official Tmall flagship store will close at 23:59 on December 30, 2022. The announcement said that after the closure, KENZO will continue to serve consumers in the Chinese Sephora channel. CHAILEEDO found that although KENZO closed its store in the Chinese Tmall channel, its international website is still running normally. A total of 44 products are currently available. It is reported that KENZO Beauty opened its Tmall flagship store in October 2021. As of press time, the KENZO Beauty flagship store on Tmall has more than 90,000 followers with two main categories of fragrance and skin care. 23 SKUs are available. According to sales volume provided by KENZO Beauty customer service on Tmall, the highest selling product in its official store is the KENZO Lotus Mask priced at 470 yuan/60ml with a monthly sales of 31 units and total sales of over 20,000 units. For the news of KENZO closing store, CHAILEEDO found on the Chinese social media platform Xiaohongshu, many consumers expressed their regret, and some consumers said they liked KENZO's perfume. In Sephora flagship store on Tmall, KENZO various series of cosmetics are available. The highest sales is KENZO body cream, priced at 490 yuan / 200ml, monthly sales of 36 pieces. KENZO was founded by the famous Japanese fashion designer TAKADA KENZO. One of the main features of KENZO's products is the bright floral patterns. In 1991, the brand's first men's perfume Kenzo pour Homme was launched. In 1993, KENZO was acquired by LVMH. 2000, FlowerbyKenzo was launched, and then became the flagship of Kenzo's perfume series. In 2001, the brand's skincare line KenzoKI was launched. In October 2020, KENZO founder TAKADA KENZO passed away. In the first nine months of this year, LVMH in the Asian market covering China grew sales by 2%, accounting for a decline to 32%. In addition, according to KENZO parent company LVMH previous news, Michael Schriver was promoted as president of North Asia, who has been in LVMH for 25 years. He was responsible for all business in Greater China and South Korea to better help its brands to grasp the opportunities of the Asian market.

On December 6, The Ordinary announced on its official Instagram that it would stop selling foundations and consultants because these categories could not make the brand profitable. (Credit: The Ordinary) The Ordinary is a skincare brand under Deciem. In 2021, Estee Lauder announced the acquisition of Deciem. At present, Estee Lauder has held 76% of the company's equity, and will gradually acquire the remaining shares thereafter. The Ordinary's cosmetics phase-out came after its parent company Deciem decided earlier this year to streamline its brand portfolio. HIF, Hylamide, Abnomaly, and The Chemistry Brand have stopped production, which enables Deciem to focus on the flagship brands The Ordinary and NIOD. (Credit: The Ordinary Instagram) In a statement released in April, Deciem said it would be ”refocusing” its attention on “science-first functional skin care”. This decision is also evidenced by the measure to suspend the launch of the cosmetics series of The Ordinary this week. According to The Ordinary, the Colours Concealers will be discontinued on January 30,,2023, and foundations will be discontinued in June next year. It is worth mentioning that the ordinary cosmetics line currently has four products, and only one face base product has not been discontinued. At present, the price of this product in Tmall Overseas flagship store is 68 yuan ($9.74), and the price of foundation make-up and concealer products that have been suspended this time ranges from 60-70 yuan ($8.5-10). The Ordinary said that the production process of base makeup products is very complex, which requires a large amount of investment from the team. Although the related products are loved by many people, the cost of investment cannot be recovered from the sales, and the products have not been profitable since their launch. However, the Ordinary also said that the base makeup products may return in the future, but its current goal is still to do a good job in skin care lines. “Colour may return in our more distant future. Until then, we will continue to play in the space we know best—sensibly priced, science-proven skincare,” the brand wrote. Source: The Ordinary

The import value of beauty cosmetics and toiletries category in November was 12.57 billion yuan (about $1.8 billion), down 11.54% year-on-year. On December 7, the General Administration of Customs of the People’s Republic of China announced the import and export customs data for November. According to customs statistics, in the first 11 months of this year, China's total import and export value of 38.3 trillion yuan (about $5.5 trillion), an increase of 8.6% over the same period last year. Among them, exports were 21.83 trillion yuan (about $3.13 trillion), an increase of 11.9%. The imports are 1.6 trillion yuan (about $229.3 billion), an increase of 4.6%. In November, the total value of China's imports and exports was 3.7 trillion yuan (about $530 billion), an increase of 0.1% year-on-year and a 4.2% increase from a year earlier. Among them, exports were 2.1 trillion yuan (about $301 billion), up 0.9% year-on-year, up 1.3% month-on-month. The imports were 16.5 trillion yuan (about $2.4 trillion), down 1.1% year-on-year, up 8.3% month-on-month. According to customs statistics, imports and exports to ASEAN, the European Union and the United States and other major trading partners grew. In the first 11 months, ASEAN is my largest trading partner, I trade with ASEAN worth 5.89 trillion yuan (about $844 billion), an increase of 15.5%, accounting for 15.4% of total foreign trade value in China. Among them, exports to ASEAN were 3.42 trillion yuan (about $490 billion), an increase of 22.2%. Imports from ASEAN were 2.47 trillion yuan (about $354 billion), an increase of 7.4%. Among them, beauty cosmetics and toiletries imported 34427.9 tons in November, down 14.26% compared with the same period last year. The imports amounted to 12.57 billion yuan (about $1.8 billion), down 11.54% year-on-year. From January to November this year, the total cosmetic imports of 388,671.5 tons in November, down 11.2% compared with the same period last year. The imports amounted to 138.64 billion yuan (about $20 billion), down 5.8% year-on-year. From the month-on-month trend, the number of tons imported since August has been on a downward trend, and the amount of imports has been growing this month has also declined. Among them, the number of tons fell by 3.4% and the amount fell by 16.4%. In fact, in October this year, 35,637.7 tons of cosmetics and toiletries were imported, down 24% year-on-year. The import amount was 15.04 billion yuan (about $2.2 billion), up 1.4% year-on-year. 354,257.3 tons were imported from January to October, down 10.9% year-on-year. The import amount was 126.08 billion yuan (about $18.1 billion), down 5.2% year-on-year. From the changes on cosmetic imports in January-November 2022, cosmetics and toiletries imports are the highest since the beginning of the year in October. There is a slight recovery trend compared to the obvious decline in September, which is related to the pre-sale of the Double 11 shopping festival in October. Brands need to stock up inventory in advance. However, it is still difficult to escape the downward trend in November just in time for the Double 11. It may be related to the recurring epidemic in China in November. In addition, the cosmetics industry categories have also seen a large decline this year. From the category point of view, color cosmetics, perfume, sunscreen and facial masks have all declined in varying degrees. O&O consulting data show that in the past year (up to June 2022), perfume sales across the network were 13.751 billion yuan (about $2 billion), down 10.26% year-on-year. Colored cosmetics’ sales were over 37 billion yuan (about $5.3 billion) online, down 4.89% year-on-year. And in the recent year ending July 2022, total online sunscreen sales were 12.566 billion yuan (about $1.8 billion), down 2.16% year-on-year. Facial masks sales were 37.66 billion yuan (about $5.4 billion) online, down 11.13% year-on-year.

Driven by the beauty economy, China's home care beauty device market is estimated to reach 25.1 billion yuan (about $3.6 billion) to 37.4 billion yuan (about $5.4 billion) in 2025. However, industry chaos also occurs frequently behind the rapid development. Recently ReFa, Miss Arrivo and other well-known beauty device brands were punished for violations. Recently, Japanese home care beauty device brand, YA-MAN, announced its financial results for the period from May to October 2022. During the reporting period, YA-MAN's consolidated net profit soared 62% year-on-year to 4.5 billion yen (approximately $32.7 million), a record high. It is worth noting that the report also highlighted that its performance in China's e-commerce channel was better than expected, with sales of beauty devices during the Chinese Double 11 Shopping Festival contributing to revenue growth. YA-MAN’s products were selling well on Tmall. AMIRO, another local Chinese beauty device brand, also announced its results during Chinese Double 11 Shopping Festival this year, saying that its omni-channel sales this year were more than 10 times than the same period last year. Its 15-minute sales exceeded the full period of last year's Double 11 sales and its 33-minute sales broke 100 million yuan (about $14.3 million). As overall performance of beauty companies are undertaking pressure, beauty device brands such as YA-MAN, AMIRO still can have such a high volume and maintain high growth. So how exactly is the current Chinese beauty device market? Chinese tens-of-billion-yuan beauty device market at high speed According to data from the Qianzhan Research Institute, the market size of China's home beauty device market was about 10 billion yuan (about $1.4 billion) in 2021. It is estimated to reach 25.1 billion yuan (about $3.6 billion) to 37.4 billion yuan (about $5.4 billion) in 2025 driven by the beauty economy. The rapid growth of the market has also led to the establishment of more and more beauty instrument-related brands. Qichacha data is shown that as of December 2, there are 16,472 beauty-device-related companies in China, with 3,689 new companies in the past three years. In an e-commerce platform, CHAILEEDO searched the term "beauty device" and found that the brands displayed will have more than 100. The price range is very large with the top-selling brands in the price of 300 yuan (about $43) to 6000 yuan (about $860). At the same time, beauty device brands are rapidly expanding their market share under the boost of capital. According to CHAILEEDO incomplete statistics, a total of 13 new beauty instrument brands have received financing from January 2021 to May 2022. These include AMIRO, JOVS and other hot selling Chinese local brands. In the face of the growing beauty device market, international beauty companies have joined the fray in the past two years, launching beauty device products. In 2020, P&G had launched a beauty device called "OPTE AI". In the same year, the Kao Group exhibited EST beauty device at the CIIE. In June this year, the beauty giant L'Oreal showed its latest research and development of new beauty device - Lancôme Absolute Dual-LED Youth Treatment. In September this year, Shiseido collaborated with YA-MAN jointly launching a new beauty device brand Effectim. Why is the beauty device market booming? The explosion of the beauty device market may be related to the fact that consumers are now more concerned about anti-aging. According to the data of CHAILEEDO, China's anti-aging skincare market size reached 83.315 billion yuan (about $12 billion) in 2021, up 21.6% year-on-year, accounting for 26.6% of the skincare market. The anti-aging market share is expected to reach 98.145 billion yuan (about $14.1 billion) in 2022, approaching 100 billion yuan (about $14.3 billion). And, China's anti-aging group is showing a younger trend. It can be seen that skin anti-aging is becoming a mass topic. For this demand, home beauty device is more recognized by consumers compared to skincare products. MarketIDX data shows that the beauty device ranks first in terms of voice in the skincare demand of firming and anti-aging, higher than products or skincare methods such as essence, eye cream and Thermage. And, 58% of consumers will be willing to recommend the home beauty device to friends because it is effective. According to the Home Beauty Device Awareness and Anti-aging Consumer Behavior Research released by DXY.com, 68% of users who bought beauty device believe that the absorption effect of skincare products becomes better after using the home beauty device. Innovation at the marketing is also driving the development of the industry. On Chinese social platforms such as Weibo, TikTok and Xiaohongshu, the booming development of social media has made beauty devices more popular. The Home Beauty Device Awareness and Anti-aging Consumer Behavior Research pointed out that consumers get information on home beauty device mainly from professional science platform or WeChat public account, accounting for about 78%. Industry regulation to strengthen and the enterprise needs to cultivate internal strength However, it must also be seen that the industry has been some chaos due to the low threshold of the beauty device industry. The standards on beauty device is not perfect. While the rapid development of the industry, the brand was punished from time to time due to product non-compliance. In August last year, the Shenzhen Consumer Council released report on 10 hot-selling home beauty devices in a comparative experiment. There are 6 of them had issue of high nickel release, which are easy to cause skin allergies. Two of them does not meet the standard, which led to risk of low temperature burns. In addition, the five tested beauty devices claiming to have instantaneous lifting, secondary cleaning, two years of heat import effect are not as effective as the advertisement. In October this year, the well-known beauty instrument brand ReFa affiliated company and Miss Arrivo agency were fined. The two were fined a total of 650,000 yuan (about $93 thousand). According to the penalty, the official flagship store of ReFa, which was opened on the Tmall platform, sold beauty device, facial creams, hair dryers and other products. In order to increase the sales of the Refa ZhiMeiTrait Yukio RF beauty device, Refa related company released the advertising such as "recommended by Japanese anti-aging experts, a Board of Directors from China Anti-aging Promotion Association" without verification. After investigation, there is no Japanese doctor in the list of board members of China Anti-aging Promotion Association. It means that the advertisement is false. In the advertisement of Miss Arrivo released by Miss Arrivo Beauty Instrument agency in its online store, the person shown in the real-man case did not participate in the instrument efficacy test commissioned by the party concerned and did not have the ability to complete the facial texture instrument test by itself, which is false. CHAILEEDO noted that half of the above several penalties were due to its false advertising. Industry insiders pointed out that the application of home beauty device is a complex skin beauty technology such as radio frequency, microcurrent and light. Because the product is in direct contact with human skin need to address the complex issues of material safety, biological safety, the establishment of various types of home beauty apparatus safety and efficacy evaluation standards is particularly important. In March 2022, the National Medical Products Administration issued an announcement on the adjustment of the Classification of Medical Devices, indicating that by April 2024, radio frequency beauty devices will be included in Class III of medical devices for management. It is important to note that Class III medical devices are the highest level of medical devices and must be strictly controlled. In other words, in 2024, after the radio frequency beauty device is included in the management of Class III medical devices, the corresponding efficacy verification must also be in place. Under the trend of tightening regulation, the entrants are coming to seize the market share. China's beauty device started late and is still in the early stages of development. At this stage, the industry does need more tolerance to encourage innovation. However, this does not mean laissez-faire. The head of the enterprise should lead by example and contribute to a good industry culture.

GsynBioT will develop new and efficient cosmetic products of different categories by studying the functional mechanisms and drug-forming properties of natural compounds to meet the needs of different levels of human health. GsynBioT (Suzhou) Biological Technology Company Ltd. (hereinafter referred to as GsynBioT) announced the completion of a Pre Series A financing round of tens of millions of RMB, led by Addor Capital, followed by CAS Angel Fund and Jianpu Capital, with T9 Capital as the exclusive financial advisor. It is reported that this round of financing transaction was completed in early October this year, and the funds raised will be used for the construction of a GMP-compliant natural product biomanufacturing demonstration line and product application research and development. GsynBioT Zhao Guopin, Chairman of GsynBioT, said that GsynBioT is doing two types of transformation: firstly, to provide a large number of high quality and reasonably priced natural compound monomers to the market. On the other hand, it hopes to work with scientists or companies in drug, health care and cosmetic R&D institutions to conduct in-depth research on the functional mechanisms and drug-forming properties of ginsenoside monomers and other natural compounds. It aims to develop new and efficient products in different categories for different levels of human health needs. The successful completion of the Pre-A round of financing will help GsynBioT to continuously and efficiently launch new products that are beneficial to human health, and help synthetic biology to be "useful". Ginsenoside, as the representative product of GsynBioT, has great commercial opportunities in the markets of pharmaceuticals, health care products, functional foods and cosmetics in the future. At present, through the biosynthesis preparation technology of ab initio synthesis, GsynBioT can achieve high yield, high purity and low-cost production of various monomeric components of ginsenoside, which has significant advantages in the process of occupying the market. At present, GsynBioT has formed a complete biotechnology platform for pathway analysis, design, reconstruction and targeted heterologous synthesis of natural compounds. In the future, it will combine the biological components and database built by the team in the early stage. It will build a global leading technology platform for the synthetic biology of natural products by introducing AI technology to create the rational design of biological components and automated casting technology of cell factories. At the same time, GsynBioT has also made a series of short, medium and long-term deployments in the production and sales of raw materials of natural compounds such as ginsenoside monomers and their product development in cosmetics, health care products and pharmaceuticals. In the short term, it will produce and sell raw materials for cosmetic products. In the medium term, it will develop precise health food products for the "cure for the untreated" as claimed by Chinese medicine or "sub-health" as referred to by modern medicine.

At present, many consumers complained about the process of return and exchange, including stores not being contactable and inconsistent after-sales service in China and across the border. This process may reveal the problem of poor after-sales service of Unilever in China. (Credit: Website) On November 18, THE LAUNDRESS issued a safety hazard notice on its official account on the Chinese social platform Weibo that some products have potential microbial contamination risks. It is recommended to stop using the existing THE LAUNDRESS products. On November 21, THE LAUNDRESS further released a solution regarding the Chinese market. In the announcement, Unilever announced the list of specific products and batches involved and would provide solutions for consumers who purchased the relevant products in official channels in China. According to the Shanghai Municipal Bureau of Market Supervision, which was announced on November 24, Unilever China has recalled 180,640 bottles of THE LAUNDRESS laundry detergent, fabric softener, and household cleaning products produced from January 2021 to November 2022. A total of 180,640,409 bottles of these products are involved. For the reason for the recall, Unilever explained that some of the products were contaminated during the production process, resulting in a high indicator of Pseudomonas spp. In extreme cases, Pseudomonas spp. may enter the body through inhalation, splash into the eyes, or through broken skin, causing infection. Unilever China has issued a recall plan on THE LAUNDRESS on its official account including Weibo, Xiaohongshu, and online official flagship stores from November 24. Consumers who provide proof of purchase of the relevant batches of products from the relevant channels and send back the products can exchange them by way of points (for a new similar product twice the amount originally purchased) or return them for a refund in the amount paid with postage paid on arrival, at the brand's expense. Once this news came out, more consumers began to fall into worry and have begun to prepare to apply for refunds on returns. In the announcement, the company also gave a very complete and detailed refund strategy. However, in practice, many consumers found that things are far from simple. The company and the platform other sets multiple "hurdles", resulting in many consumers can not complete the refund. At present, many consumers complained about the return process, including the store can not be contacted, after-sales inconsistency in China and across the border, and so on. This process has also exposed the problem of poor after-sales service from Unilever. Some consumers found that they also had to distinguish different numbers according to the bottle labels. If the label is simplified Chinese, the products are responsible for the Unilever official. If the label is in English, all are responsible for the e-commerce platforms. (Credit: Xiaohongshu) And in the international site such as kaola.com, Amazon, and other platforms, the return and refund process can be directly completed by contacting customer service. But this process is not smooth on the Chinese platform. (Credit: Xiaohongshu) Many consumers complained, "set the threshold intentionally", and "urged the customer service countless times, no reply yet". Some netizens even posted how to get a refund. "The products bought on cross-border channels can be returned. Then why does Unilever make it difficult for Chinese consumers?" Many consumers questioned. This is not the first time that Unilever has been in trouble. In 2020, Unilever's brand Clear was notified by the relevant authorities for punishment due to unqualified product ingredients. In October of 2022, several Unilever's dry hair sprays were recalled in the U.S. market due to carcinogenic benzene, including Dove's professional hairdressing brand Suave and TRESemme. (For more information, see the CHAILEEDO article. ) Unilever's third-quarter earnings report showed a shrink in its China business, with sales in the region down 20% year-on-year. In the downward market environment, how to deal with the PR crisis is particularly important. The current inconsistent standard is likely to affect the image of the long-running brand. Source: THE LAUNDRESS

The only Chinese cosmetics company with two skincare brands both with annual retail sales of over 1.5 billion yuan is one step closer to going public. On December 4, Shanghai Chicmax Group announced that it had passed the HKSe hearing and released the post-hearing information set. The document shows that in the first half of this year, Chicmax Group's total revenue was 1.26 billion yuan (about $181 million), of which the revenue of three brands, KANS, One Leaf and Red Elephant, accounted for 93.0% of the group's total revenue. According to the prospectus disclosure, Shanghai Chicmax Cosmetics Co., Ltd. is a multi-brand cosmetic company that focuses on the development, manufacturing and sales of skincare and maternal and child care products. According to the Frost & Sullivan report, in 2021, the company is the only Chinese cosmetics company with two skincare brands that both have annual retail sales of more than 1.5 billion yuan (about $215 million). Among them, Red Elephant has already exceeded 1.8 billion yuan (about $258.5 million) in revenue in 2021, topping the Chinese market for Chinese domestic maternity and baby care products. It is reported that Chicmax submitted a prospectus to the Hong Kong Stock Exchange on January 17 this year, officially launching the process of listing in Hong Kong. In the first three quarters of 2021, Chicmax Group revenue was 2.596 billion yuan (about $373 million), an increase of 12.77% year-on-year. During the same period, according to the prospectus, Chicmax Group ranked top three in retail sales of Chinese domestic brands of skincare products, top in Chinese domestic brands of mother and baby care products, and top in Chinese domestic brands of mask products. It is worth noting that Chicmax's profitability is increasing year by year - in 2019, 2020 and 2021, Chicmax's revenue was 2.874 billion yuan (about $412.7 million), 3.381 billion yuan (about $486 million) and 3.619 billion yuan (about $519.7 million), respectively. Profit attributable to owners of the parent company is 62.6 million yuan (about $9 million), 204 million yuan (about $29.3 million), 339 million yuan (about $48.7 million), and 65.3 million yuan (about $9.4 million), respectively. This was mainly due to the increase in revenue from KANS, One Leaf and Red Elephant. In the first half of 2022, Chicmax Group's total revenue was 1.262 billion yuan (about $181.2 million), down 31.1% compared to the same period last year, mainly due to the Nepidemic which affected its production and delivery in Shanghai. As for R&D investment, the total R&D investment of Chicmax Group in the first half of this year was 51.9 million yuan (about $7.4 million), up 4.2% year-on-year, accounting for 4.1% of total revenue. Currently, as of the first half of this year, Chicmax Group has an R&D team of 204 people, including 81 people with master's degree or above, accounting for 39.7% of the total number of people. The revenue generated from self-developed products accounts for 97% of the total revenue. In fact, the online channel is another path for Chicmax's growth. In its prospectus updated in January, Chicmax's online revenue for 2020 was 2.543 billion yuan (about $365.2 million), up 69.0% year-on-year from 2019. As of the first nine months of 2021, Chicmax Group's online revenue was 1.893 billion yuan (about $271.8 million), of which online self-operated stores accounted for 41%. By product category, the skincare category accounted for the highest share, accounting for 73.6% of total revenue of all categories in the first half of 2022, while the mother and baby care category accounted for 25.4%. The revenue share of mother and baby care category is gradually increasing compared with the same period last year.

POLA, Fancl, Shiseido, and so on have been developed in the field of inner beauty. In that way, Chinese top beauty brands certainly will not let go of this windfall. In the era of face value economy, beauty lovers not only rely on external nourishment but also want to use inner beauty to make themselves beautiful. According to CHAILEEDO incomplete statistics, at least a dozen cosmetic-related companies have entered the field of inner beauty in the past two years including BTN, Bloomage Biotech, S’Young and so on. There are as many as seven newly born inner beauty brands. Cosmetic companies have entered the game According to the data released by Straits Research, the global inner beauty market size has reached 52.7 billion yuan (about $7.6 billion) in 2021. Among them, China's inner beauty market is expected to reach 28% of the global market in 2022 and is expected to become the second largest inner beauty market in the Asia-Pacific region. Another public data says that China's oral beauty market size is expected to reach 25.57 billion yuan (about $3.7 billion) in 2025. The booming development of the inner beauty market has attracted a host of cosmetic companies to enter the market. According to CHAILEEDO incomplete statistics, 14 newly born inner beauty brands in recent years. CHAILEEDO noticed that most of the inner beauty products launched by cosmetic-related companies are mainly positioned at the mid-range with the price of the products generally set at less than 600 yuan (about $86). In terms of ingredients, the above inner beauty products are mostly based on collagen and hyaluronic acid. A veteran of the industry pointed out that, "10 years ago when inner beauty products were popular, most of the products were focusing on the collagen. After the media revealed many false propaganda of inner beauty products, the trend of inner beauty came to an end. This year, the cosmetic industry has really taken off again with the trend of inner beauty." As the above-mentioned senior person said, listed cosmetic companies such as Bloomage Biotech, BTN and S’Young have entered the inner beauty this year. In January 2021, the National Health Commission of the People’s Republic of China announced that hyaluronic acid was approved as a "new food ingredient", which undoubtedly gave Bloomage Biotech sufficient place to plough into the inner beauty sector. After this, Bloomage Biotech and Winona have launched their own oral beauty products. And also S’Young targeted the field of inner beauty. In May this year, Beijing QingYan BoShi Health Management Co., Ltd. underwent industrial and commercial changes, adding S’Young as a shareholder, with a shareholding of about 4.3%. It is understood that the company has a inner beauty brand Five Doctors. The brand was created by five female doctors from Peking University. The main ingredient of the series of products of this brand are collagen peptides and elastin peptides. It is worth noting that the brand sales are considerable. Its monthly sales volume is 30,000 + units in its flagship store on Taobao. It is easy to see that China's inner beauty craze has been making a "comeback" with the awakening of a new generation of consumers' health consciousness. Why do inner beauty become popular? In addition to Chinese local cosmetic companies, Shiseido, an internationally renowned cosmetics group, has also said it will pay much attention on the inner beauty sector. In June this year, the Shiseido Group launched a new inner beauty brand, INRYU, developed specifically for Asian women in China. It also made the world debut of a new inner beauty product, Shiseido Probiotic Freeze-Dried Powder, at the Fifth CIIE held recently. The head of Shiseido China's oral beauty business unit said publicly, "Shiseido already has 10 oral beauty brands in Japan, the group's third largest category after skincare and color cosmetics. In 2023, Shiseido Group will establish a global inner beauty business unit, which will focus on China and expand the inner beauty business to the world. " So, why a number of cosmetic companies entered the inner beauty at the moment? TCI, which is a brand has been working in the field of inner beauty for many years. Its executive vice president, Lin Yonghao, analyze that, in terms of market trends, the methods and visualization of efficacy verification are becoming more and more mature with the progress of science. Inner beauty has gone from being stigmatized to becoming a new science. Moreover, there are many large beauty brands in the field of inner beauty to successfully create a second curve of corporate growth including Chinese and international brands. Brands that pioneered the sector include POLA, Fancl, Shiseido and so on. Because of this, it also promotes the Chinese head beauty brands to study the path of successful companies, and then to adjust the strategy and products for their own brands. In the implementation of the Health Food Raw Material Catalogue and Health Care Function Catalogue Management Measures from October 1, 2019, 15 new food ingredients such as hyaluronic acid were approved in 2021, etc. The relaxation of policies and regulations will help the market develop more diversified. 30 years with chance and obstacles According to public information, the earliest inner beauty products in China can be traced back to Taitai Koufuye, which was once popular across China. In 1994, the annual sales of Taitai Koufuye reached 160 million yuan (about $23 million). However, Taitai Koufuye did not always stand in the center of the market. In 2003, Taitai Pharmaceuticals changed its name to Joincare Pharmaceuticals. The company shifted from health care products to medical technology. Taitai Koufuye gradually faded from the public. Just at the same time, Shiseido, DHC and other Japanese companies launched collagen products into China one after another, driving the awareness of the entire collagen inner beauty industry and making collagen a popular category. The other side of the industry's rapid development, however, is the imperfect rules and loopholes in regulation. In 2013, along with the disclosure of "The Beauty Myth of Collagen", the collagen industry focused on rectification. Since then, the inner beauty and even inner health care industry has been in a period of freezing. However, after a few years of silence, the development of cross-border trade and e-commerce has brought new development opportunities for inner beauty products, according to Lin Yonghao, executive vice president of TCI. In addition to international brands such as GNC and Swisse, which have entered the Chinese market earlier, there is also the inner beauty brand YRY, which has become popular in the Wechat business channel in the Chinese market. Overall, the Chinese inner beauty market has seen a high improvement after nearly 30 years of development. However, the sector is also facing new challenges and dilemmas.

Revolution Beauty auditors had serious concerns about the group's accounts due to financial problems. Now, Boohoo may be able to help Revolution Beauty regain. Following the change of ownership of Japanese makeup group DHC, British makeup group Revolution Beauty (REVB.L) has recently received a new owner—British online fashion retailer Boohoo (BOOH.L) has become its largest shareholder. REVB.L is understood to be under suspension for failing to update its financials. Its development in China has also been lackluster. REVB.L had nearly $700 million in revenue in six months Founded in 2006, acquirer Boohoo is a leading British online fashion retailer that went public on the London Stock Exchange in 2014. BOOH.L's revenue for the six months ended Aug. 31, 2022, was 882 million euros (about $929 million), according to its latest earnings data. According to BOOH.L's disclosure, after two capital increases, BOOH.L has become REVB.L's largest shareholder, directly holding 26.47% of REVB.L's issued share capital. At the same time, BOOH.L will officially assume the role of CEO of the group. Back in August this year, BOOH.L acquired 7.1% of REVB.L's shares. In a filing at the time, BOOH.L said the investment also reflected its confidence in REVB.L's growth potential. And in its latest acquisition filing, BOOH.L reaffirmed its confidence. It also stated that its intention is to become a co-stakeholder and long-term partner of REVB.L. REVB.L is a British Mass Beauty and Personal Care business founded in 2014 by Adam Minto and Tom Allsworth. All of its products are inclusive and diverse, claiming to offer a wide range of products at different price points for consumers of all skin tones. All of its products are 100% cruelty-free and vegan, using sustainable and recyclable packaging whenever possible. REVB.L currently sells its products directly to customers online through its website and offline in its brick-and-mortar retail sales. It has sold in 64 countries and territories and its main markets remain in the UK, Europe and North America. In terms of products, REVB.L has a variety of categories such as color cosmetics, skin care, hair care, etc. Its new products launched frequently and has launched many co-branded products with Disney and Warner. It is understood that REVB.L's eight private brands currently have more than 4,000 SKUs, of which color cosmetics products account for 78% of all product revenue. Its colored cosmetic are also its core products. Since its inception, REVB.L has experienced rapid growth and successfully went public in 2021. According to media reports, REVB.L is one of the largest initial public offerings (IPO) in London's junior market in 2021, when its valuation reached 500 million pounds (about $615 million). According to REVB.L's earnings report, its revenue for the six months ended Aug. 31, 2021, rose 39 percent to 78.6 million pounds (about $97 million), and gross margin grew to 47.9 percent. Its color cosmetics category achieved 53% year-on-year revenue growth. However, in the past two years, REVB.L has been plagued by financial problems, with its financial data update stuck in 2021. On September 1 this year, REVB.L's trading was suspended for failing to release its final results for the full year ended February 28. Based on the suspension offer, REVB.L's current market value is about 58.85 million pounds (about $72.4 million). As previously reported by media, the group's auditors had "serious concerns" about the group's accounts. Because of this, the group's auditors refused to sign the annual accounts for February 2022, and the relevant authorities are currently conducting an independent investigation into the group, the results of which are not yet available. New CEO assigned Despite REVB.L's suspension and financial concerns, BOOH.L remains confident. REVB.L's zero-cruelty and vegan is in line with the mainstream beauty trend in Europe and the US. The brand's fast-paced and youth-oriented characteristics also coincide with BOOH.L's fast fashion attributes. It is understood that BOOH.L has not stopped the pace of expansion in the past few years. For example, in 2017 it acquired clothing brand Pretty Little Thing and women's clothing sales website Nasty Gal. In 2019, BOOH.L acquired British women's fashion clothing brand network Miss Pap and clothing brands Karen Millen, Coast, Debenhams, etc. In 2021, it acquired Debenhams' intellectual property assets in preparation for its transformation from a fashion and beauty retailer to a digital department store and marketplace. In addition, BOOH.L was named CEO of REVB.L, where he has been serving as interim COO since October. BOOH.L said in a filing that over the past few months he has witnessed firsthand the excellent quality of REVB.L's employees, BOOH.L said in a filing that he has seen firsthand the quality of REVB.L's employees, brand awareness and product innovation over the past few months, and that he believes there is still tremendous opportunity for REVB.L's future growth. REVB.L shows decline in China REVB.L, which is a hot seller in the UK and North America, is certainly not missing out on the Chinese market, which is a major battleground for beauty groups. On July 3, 2019, REVB.L officially entered Weibo, and its Tmall flagship store opened in the middle of the month. At that time, its main products included unicorn lipstick, highlighter blush series, 24-color REVOLUTION & Soph eyeshadow palette, chocolate eyeshadow palette, etc. Since then, REVB.L has also been more active in China. It launched new products frequently, and often launching sweepstakes and holiday events. For example, in May-June 2020, REVB.L launched 4 trends of new products including highlighter, eyeshadow palette, mascara, etc. However, compared to its initial activity, REVB.L's account on Weibo has not been updated for a long time. Its last update was on February 27 this year. However, many Chinese consumers said that REVB.L’s makeup is patchy and so on. At present, REVB.L Tmall overseas flagship store contains makeup and some skin care products, specifically eye shadow, mascara, lipstick, foundation, VC essence, collagen serum, etc. The price of its single products ranged from 39-179 yuan. Among them, the highest-selling product is 15-shade eyeshadow palette. Its price is only 69 yuan after coupon with monthly sales of more than 600 pieces. Compared to the same price of Chinese affordable makeup, REVB.L's sales are not really high. Take the similarly priced Judydoll for example, its top-selling blush, cosmetic and eyeliner products all sell more than 100,000 pieces per month. This also shows that REVB.L is still positioned in the minds of domestic consumers as a "niche British affordable brand". In fact, it is common that international beauty brands can’t meet China’s market, especially in the last two years under the dual impact of the epidemic and makeup market downturn. Many European and American makeup brands even choose to directly put off from the Chinese market. But on the other hand, since this year, many international beauty giants are further deploying of the Chinese market, Estee Lauder upgraded the Chinese R & D center, Shiseido in the CIIE also said it will be in China to prepare for the second largest R & D innovation center in the world ...... International companies introduce new brands actively. The Chinese beauty and skin care market is still a fertile ground waiting for international brands to develop.

According to Bloomberg, Brazil's beauty giant Natura & Co is working with Bank of America Corp and Morgan Stanley to sell its shares in Aesop. Aesop was founded in Australia in 1987 and was acquired by Natura&Co in 2012, the largest cosmetics company in Brazil. In March 2018, Aesop launched its Tmall overseas flagship store in China, followed by a WeChat mini-program and an official Xiaohongshu account to provide Chinese customers with purchasing services and online consultation through e-commerce. It was not until July 30, 2022, that Aesop officially announced that the first physical store in mainland China would be located in Shanghai. On November 25, Aesop's first store was officially opened on Dongping Road, Shanghai. In 2014, Aesop had net revenues of R$ 240 million ($45.983 million) and in 2021 it will have net revenues of R$ 2.60 billion ($500 million), nearly 11 times more than in 2014. In the Aesop brand's third quarter 2022 financial report, its revenues amounted to nearly R$ 603 million ($115.5 million), representing an increase of 21.5% at constant exchange rates and approximately 7% of Natura's total net revenues. Compared to the two other brands in the same group, The Body Shop’s revenue fell by 19.5%, and AVON’s revenue fell by 8.1%, Aesop's performance was more impressive. But looking at the parent company as a whole, Natura & Co's performance seems to be unsatisfactory. The latest third quarter report in 2022 shows that Natura & Co's net revenue in the first three quarters was R$ 25,959.4 million ($4973.8 million), down 9% year on year. Natura & Co's net loss in the first three quarters was R$ 1969.6 million ($377.3 million), down 658.7% year on year. The net income in the third quarter was R$ 9003.7 million ($1725.1 million), down 5.7% year on year. The net loss in the third quarter was R$ 559.8 million ($107.2 million), down 305.1% year on year. It is possible that the decline in revenue of the business has led to a shift in Natura & Co's attitude toward Aesop. Natura earlier preferred Aesop's initial public offering, but now favors a minority sale due to an unfavorable stock market, people familiar with the matter said. Bloomberg, citing a person familiar with the matter, said parties currently interested include private equity firm CVC Capital Partners, L'Occitane International SA, and Shiseido Co. “The discussions are in early stages and could end without an agreement, the people said.” Bloomberg wrote. Source：Bloomberg

After the Chinese beauty industry experienced “the Darkest Hour”, the restriction adjustment in Guangzhou brought new hope to the beauty industry. On November 29, an industry insider revealed that "about 65% of the national (China) courier network shutdown". The news immediately aroused the industry's concern. In the past few days, the news about the national courier shutdown spread on the Internet, and other industry sources complained that "Yunda Express in a nationwide 4,835 outlets have stopped sending packages", "The delivery in China stopped sending a large part of the goods can not be sent out. The New Year will be coming. Every day I suffered a tough time". “The Darkest Hour” hit e-commerce again. The beauty industry is also almost unable to insist. Delivery shutdown widely thus complaints from customers Due to the multi-region restriction, a large area of logistics and courier shutdown. A number of e-commerce industry practitioners on Weibo said that "the current 65% network of couriers in China shutdown". The source of their data is the statement of the cooperative courier company sending to the merchant. It is reported that the main reason for the courier stoppage is concentrated in the network anomaly, epidemic prevention and control, logistics shutdown, public control, of which 99% of the reasons for the epidemic prevention and control. Rome is not built in a day. The large area of express delivery stoppage lasts a long time. Since November this year, the slow arrival of express delivery has become a key issue of consumer complaints. According to the 2022 Chinese "Double 11" Shopping Festival consumer protection opinion analysis report recently released by the China Consumers Association, during the 25-day monitoring period from October 20 to November 13, a total of 136,000 negative reviews about "courier service issues" were collected, accounting for 24.87% of the total number of complaints, with a daily average of 54,552 pieces. The distribution of information volume showed a low before and after the high trend. The volume of public opinion information was obviously high after November 1, reaching a peak of 81,824 articles on November 12. "Previously the factory was closed and now the logistics are stopped. It is always impossible to send out the goods." The brand located in Guangzhou also told CHAILEEDO that the goods ordered by consumers during the Chinese Double 11 Shopping Festival have failed to be sent out so far. At “the Darkest Hour”, the beauty industry in Guangzhou ignites hope As the national(China) logistics was paralyzed, Guangzhou held a press conference on the prevention and control of the epidemic, saying, "Those who meet the conditions for unsealing should be unsealed in time, and the management of sealing and control should be quickly sealed and unsealed as much as possible." As soon as the words fell, many districts in Guangzhou issued notices to lift the temporary control one after another. This undoubtedly gives hope to the nearly "suspended" Guangzhou beauty industry rekindled. It will also benefit the entire Chinese beauty industry chain. Many netizens have said "It is exciting", "the express can finally be sent out" Guangzhou is very important to the Chinese beauty industry. Qixin.com data shows that the Chinese cosmetics companies have 86,239, of which the largest number of enterprises in Guangdong Province, accounting for 25.5% at the end of 2021. Express logistics is an important part of the supply chain, which is like capillaries to transport nutrients to all organs of the body day and night. And logistics stoppage will inevitably bring a huge impact on all walks of life, more so for Guangzhou, a major beauty province. "Express stop largely. Two of our warehouses are affected." "Because of the express stop and restriction control, the goods can not be sent out from our warehouse." Industry insiders told CHAILEEDO that due to the impact of factories, store closure control and logistics/courier shutdown, the cosmetic business has been greatly affected. With the sudden adjustment of Guangzhou's policy, beauty brands, and factories related to cosmetics heave a sigh of relief. "Great, I can inform my customers to stock up." Guangzhou, a responsible person of OEM said excitedly. And many industry insiders who previously reflected CHAILEEDO that stores and warehouses were controlled also said, "Very much looking forward to it, I hope there will be no change." The person in charge of a brand in Guangzhou said, "We have not yet received news of the unlock of the warehouse, so we will see the situation tomorrow and hope that it can really be implemented in place so that we can have a chance to heave a sigh of relief." However, there is also part of the industry said this, "We are moved, but do not dare to move." After 3 consecutive months of negative growth, the beauty industry is expected to slowly recover Previously, Haizhu District, Baiyun District and so on in Guangzhou were controlled. The entire cosmetics industry chain was affected. Then, many industry sources that, "Because of the restriction, many ingredients and packaging materials can not be shipped out. Cosmetics companies in other areas have also had an impact. Moreover, many warehouses which belong to some cosmetic brands also can not be sent out their goods to customers." It can be said that the whole industry is involved. The person in charge of the brand told CHAILEEDO that its company is headquartered in Baiyun District, Guangzhou, and the brand has about 300 chain stores in the country, which was almost crushed by the severe epidemic in Guangzhou and the multi-point outbreak nationwide. The person in charge said, firstly, because the factory is in Baiyun District, and the recent closure of Baiyun District led to the brand having no way to produce and deliver. New products which were filed recently can not be launched as scheduled. Secondly, as for the transport, due to the logistics and express delivery stop, the products can not be transported to the stores. As for the sales, due to the closure and control, a number of stores are almost in closure. "We need the 3 sides, production, logistics and stores, to be in a smooth situation before we can operate normally." Obviously, what happened to the above-mentioned brands is just the tip of the iceberg of the cosmetics industry during the epidemic. The winter this year is longer and colder than the previous two years. According to the National Bureau of Statistics, the total retail sales of cosmetics in October this year was 30.9 billion yuan, down 3.7 percent year-on-year, while the total retail sales and growth rate both declined compared to the previous month. The total retail sales of cosmetics from January to October was 308.4 billion yuan, down 2.8 percent year-on-year. Since this year, the total retail sales growth rate of cosmetics has been maintained at the lowest level in five years and has been negative for three consecutive months. In fact, a number of senior people who have been in the beauty industry for more than 10 years told CHAILEEDO that November and December are often busy in closing periods for the beauty industry every year, with raw materials, factories and brands busy either rushing to deliver their final orders or preparing for next year. Although many practitioners say “We will see what’s going on next.” Overall, the adjustment of the epidemic prevention policy gives the Guangzhou beauty industry a chance to heave a sigh of relief and gives confidence to the beauty industry. Many people also believe that "with Guangzhou taking the lead, the entire consumer market is also expected to pick up." In this way, the entire cosmetic industry is also expected to slowly recover.

Recently, the National Medical Products Administration released the "Notice on the Piloting of Personalized Cosmetic Services" (hereinafter referred to as the Notice) on its official website, announcing to carry out piloting of personalized cosmetic services in some areas.