Henkel recently announced the launch of SalonLab&Me, a B2B2C ultra-personalized professional hair care brand that combines the expertise of hairdressers with digital experiences to further drive hair personalization. SalonLab&Me, which focuses on ultra-personalized services, was jointly developed by Henkel Beauty Care, a Henkel business division, and Henkel dx, a digital division, according to the report. It combines salon hairdressing consultation and online shopping in order to form a new business-to-business-to-consumer (B2B2C) business model. Henkel expressed that SalonLab&Me innovates the entire industry with its unique business model. The stylist will work with the client to fill out a user-friendly in-app questionnaire to get a detailed understanding of the client's current hair condition. After the hair has been evaluated, the stylist will analyze the hair's internal structure and hair color using the Schwarzkopf SalonLab smart analyzer. Once the analysis is complete, the client receives personalized product recommendations, which include a product package that matches their unique hair needs and contains a complete hair care collection. In addition, the product package can be further customized based on the customer's name, the color of choice, and the customer's preferred fragrance. Henkel says SalonLab&Me is its first ultra-personalized and customized salon-exclusive hair care line. Upon completion of product customization, the process will be completely digital. Customers have their own personal SalonLab&Me account and can view their order history or repurchase items, as well as see personalized and professional articles recommended based on their hair type and the products they have selected. SalonLab&Me links offline salons and customers through smart customization and online e-commerce, and the salon also receives a commission on each customer order after the customer purchases an item. Michael Nilles, Henkel's Chief Digital and Information Officer, said the megatrend of personalization and data-driven innovation is rapidly evolving and Henkel is constantly updating its products, business models, and concepts to create meaningful and substantial experiences and innovations for customers. With the launch of SalonLab&Me, Henkel can support the professional hair care experience with its digital service platform. Stuart Hamid, General Manager of Henkel Beauty & Care Professional in Germany, Austria, and Switzerland, also said that by creating SalonLab&Me as a brand, not only is the business of personalized hair care being innovated, but also the entire industry with its unique business model.

Winning in Efficacy, Welcome the Future. On September 22, the 5th Conference on China’s Cosmetics Trends, hosted by CHAILEEDO, was held in Hangzhou with the theme of "Winning in Efficacy". During the conference, Lao Shuquan, China Director of Symrise Cosmetics Ingredients Department presented the keynote speech "Trends in Efficacy ingredients". Good afternoon everyone. Thanks CHAILEEDO for inviting me! A lot of changes have really happened over the years. My sharing today is not quite the same perspective. I will discuss that how we as an upstream supplier think about this issue. My speech today will involve four aspects: efficacy and regulations, efficacy development, layout of the efficacy of ingredients and future of the efficacy ingredients. 1. Efficacy and regulations Some people will have questions about why efficacy and regulations can be associated together. A wide variety of efficacy has existed in the market. Many efficacy claims on the ingredients, there are claims from the efficacy itself, there are also claims from the means, dosage forms, and so on different perspectives. Speaking of efficacy must speak of regulation. If we don’t speak of regulation, many efficacies will lose legal status. It will grow wild. And there will be irregularities added. Now the regulation controls it. The sellers can't talk nonsense. As for regulation, China's regulations are now ahead of the world. In the future, other countries will make Chinese regulations their standard. The Chinese market can successfully break through the efficacy of the ingredients, China will certainly lead the world. 2. Breakthrough of efficacy ingredients Cosmetics can not be separated from the formula. The formula has a framework of components and auxiliary components. The main cosmetic differentiation is "efficacy components", which mainly brings the soul of cosmetics. This is the core of most cosmetics we buy today. When a factory buys a formula, it buys the formula design, mechanism, and principle of efficacy, which is from the view of cosmetic development. If we look at the ingredients themselves, cosmetics are a product of multidisciplinary crossover, and the development of a single ingredient involves a variety of upstream disciplines. In addition to formulation considerations and safety doses, there are many mechanisms and factors involved in the formulation of this ingredient. Specifically. It should have a certain transdermal mechanism. Pathway target of biological mechanism should be clear and unambiguous. Double-blind test and clinical statistical significance should be considered 3. Layout of the efficacy of ingredients In the cosmetics industry no matter how many kinds of efficacy claims, they all are concluded into four dimensions. Pigment regulation, whitening, spot removal, tanning ...... make changes to the skin tone and make the skin beautiful. Since we are talking about efficacy, we have to go back to regulations. Now China is regulating cosmetic efficacy claims. The ingredients are also regulated. In the past, ingredients are not regulated so much by related authorities but they mainly regulate the product efficacy. Now both of them are regulated. If you want to do new ingredients or new efficacy, here is to take into account the registration and filing of two different places. Now many people are confused about the meaning of record and filing. Many people record a product. Then something wrong and the government punish you. Then what is the meaning of the record? This is a typical failure to understand the difference between the record system and the filing system. 4. Future of the efficacy ingredients The biggest difference is assessable and measurable in the future. to be built on the real and objective biological mechanism. In the future, in the biological mechanism, in the mechanism of action research and screening will certainly be innovative, more real, more focused on science. As a German company, Symrise has been developing many ingredients for more than 100 years and will continue to do so now and in the future. We are currently doing a lot of continuous discussions on green, sustainable, marine ecology, environmental eco-friendliness, green, etc., all of which Symrise is going to think about. Three final words for everyone. Safety is the greatest efficacy. If you are a product manager, a brand manager, a formulator, a boss, or an R&D person, if you have doubts about the safety of something, believe your doubts. Do not let yourself off the hook on safety matters, it is responsible for yourself, responsible for the brand, and responsible for the consumer, and responsible for the entire cosmetic industry in China. Special certificate efficacy is the threshold, and new efficacy is the blue ocean. If a brand does not have a special certificate category of its own, I think the requirements and height of the technology are not enough, to pull their cognition a little higher, special certificate is a big investment for, a long time, but this is a meaningful category, so special certificate is the threshold. The last word, do not fight for the night, slow is fast since to do efficacy is certainly not so fast, my personal view is fast, out of what good efficacy, the world's martial arts only fast marketing culture, is not suitable for the pace of efficacy research and development, I hope that all the real R & D companies, think about this point, quietly to do things. The content shared today is my personal views as an industry practitioner for many years, as a penny for my thoughts, to provoke debate and thinking, thank you. Q&A: At present, many bloggers focused on traffic will share some products that are similar to the products made by big brands but it is cheaper. Consumers can check from some apps and big brands the efficacy of the difference between the ingredients. We know from the concentration of ingredients, the product process, and some technical differences, so how do you look at the phenomenon? Lao Shuquan: It depends on what you are replacing. If it is replacing efficacy, it depends on the formula, the architecture, the product, and the raw material quality control level. Because we do not know what other brands' formulas and quality and ingredient quality are, it can not be said. In addition, I think the claim has some problems. In a product used on the skin, there are other issues to consider such as poor tolerance, it is not easy to replace others. I think a good brand will not give you any major problems in terms of tolerance, safety, and gentleness, no matter how well they do in terms of efficacy. There are always some essential things that cannot be replaced, depending on what you want. Some things cannot be achieved by replacing them, which is the essence of the company's R&D strength, not so easy to replace. Q&A: For imported ingredients, will Symrise promote the localization of ingredients as far as possible? Lao Shuquan: Symrise is already doing it now and it must be done from the perspective of a stable and reliable supply chain. Our new factory built by Symrise in Nantong will be put into production in November this year. This is our localization strategy. Not only the production but also the more basic upstream R&D, etc. We will do all these localization strategies.

Recently, “corporate survival” has become a hot topic. The beauty industry has also encountered various challenges this year, but the competition of efficacy cosmetics is still fierce. CHAILEEDO invited Ding Wenfeng, founder of Winkey  pharmaceutical R&D Co., Ltd, to share with us the trends in Chinese cosmetics. CHAILEEDO: What are the trends of new ingredients next year? Ding: Under the new regulations, the filing applications for new ingredients should be multi-directional and prosperous. First, the basic ingredients, which have a history of use abroad, will be introduced into Chinese. Second, the characteristic resources. Plant resources with traditional Chinese characteristics are encouraged to be applied in skincare products, and the domestic market will actively conduct research and development applications for these new ingredients. Third, the scientific and technological ingredients, especially peptide ingredients. Due to the wide use domestically and overseas and the high market recognition, as well as the characteristics of high safety, high activity and diversity, Winkey has reserved plenty of new peptide ingredients technologies, hoping to empower the industry with innovative technologies continuously. CHAILEEDO: What is the next breakthrough point of efficacy cosmetics? Ding: The breakthrough point of efficacy cosmetics is mainly the efficacy active ingredients. Every brand shall have its unique and exclusive active ingredients to protect its distinctiveness, to enhance the brand value and competitiveness. CHAILEEDO: Will synthetic biology replace animal and plant extracts? Ding: The synthetic biology method is green and environmental-friendly, in line with the industrial and future development trends. The synthetic biology method works by building underlying cells that can perform various tasks envisioned by designers, including producing various compounds. At this stage, the large-scale and industrialized application of synthetic biology is relatively limited. There are few varieties that can be industrialized, and many are still in the conceptual stage. Thus, we have not truly realized more economic and environmental protection production by using the synthetic biology method and peptide ingredients have not yet been produced by this method in a real sense. At present, the mainstream is still chemical synthesis, and a small amount is produced by enzyme engineering or genetic engineering methods. Therefore, the synthetic biology method may be able to replace the production of some chemical synthetic substances at this stage. But due to the complex and multi-component systems of animal and plant contracts, there is no way for synthetic biology to replace animal and plant extracts nowadays.

Winning in Efficacy, Welcome the Future. On September 22, the 5th Conference on China’s Cosmetics Trends, hosted by CHAILEEDO, was held in Hangzhou with the theme of "Winning in Efficacy". During the conference, Sun Laichun, the founder of Forest Cabin brought the theme "Channel Exploration of Chinese High-end Brands" to share. Forest Cabin has a long-standing mission to make people and the planet more beautiful. Let the skin become beautiful is every beauty industry practitioners should stick to the bottom line, we add "let the earth's skin more beautiful". Forest Cabin has been thinking a lot about how to build a mid-to-high-end brand. What we've found is that some of the cosmetics brands that burst onto the scene don't last. Forest Cabin never became an overnight hit, and it never plummeted. Every year it was double digit growth, it was steady going forward, so I wasn't too anxious. Slow down, pace yourself, and look beyond. If you want to build a high-end brand, all the brands in the world have experienced decades of development, generation by generation to cultivate. Forest Cabin adheres to the long-term philosophy, and I think it is possible for you to live a better life and develop faster. I've often been asked by investors that Forest Cabin is growing at a slow rate. Aren't you worried? I said I was worried too. When I was in primary school, I learned a lesson called "The Story of the Little Pine Tree and the Little Mushroom". There is a small pine tree in the forest, planted for three years, but it does not grow tall. One day, after it rained, there was a small mushroom that grew faster than a small pine tree in three days. But as soon as the sun came up, the little mushroom died and the little pine tree still lived. To establish a brand, especially to impact the high-end brand, we should learn from small pine tree. We were in Shanghai in April and May this year, and we thought we weren't doing so well, but we did a general ledger in April and found that we were up 12% in April and 15.9% in May. During the 618 period, we saw a 34.5% year-on-year increase. The main reason is that we have enough goods. During the pandemic in Shanghai, we had an all-staff meeting and 40 workers agreed to stay in the factory and make products without interruption. We thought it would last a week at most, but we lasted 70 days. During the epidemic, the Forest Cabin factory did not stop production, all the live broadcast team stayed in the office without any rest, and all the stores could interact at home through private domain, so our business performance was good. I suddenly realized that our industry is really good, no matter what day it is, you need to wash your face. The beauty industry is the industry of demand. This decade, we focus on nourishing the skin with oil, creating a new sector of oil essence. This is the result of Forest Cabin's three consecutive high-tech enterprises. A term of three years, three terms is nine years. It is not easy to invest more than 100 million yuan in scientific research and more than 100 patented technologies to produce such a bottle of products. To build a high-end brand, you need to endure for a long time and love the brand like a daughter to be successful. This bottle of product from God bless. we found farmers in 2020 at home isolated picking a large number of Camellia. We discussed that it was not easy for the farmer, so we bought it all. We set up a plant extraction group and worked hard for a year and nine months to make our own anti-aging ingredients, which turned out to be popular as soon as the product hit the market. God would not have helped us make this product if we had not helped the farmers. So the brand depends 80% on hard work and 20% on God bless. For a brand to become a high-end brand, it must have a great dream and a noble mission that may go far. In fact, we have a vision to become one of the top five cosmetic groups in the world. I may not achieve it in my lifetime, but I have confidence in the future of Chinese brands. Q&A: Under the epidemic situation, the number of customers and the unit price of customers in these stores of CS channel declined. How did Forest Cabin solve this problem? Sun Laichun：If we solve this problem we save hundreds of thousands of cosmetic stores in China, and we are exploring it. In April and May under the epidemic prevention and control, Shanghai stores are in a state of closure. Stores are closed performance where it comes from? The answer is very simple, physical stores, single-brand stores have their own "personality", have their own private domain fans and members. Our recently opened franchise stores used this method and began to promote with TikTok China and Wechat. It is not a simple online question and answer, but a community exchange and communication. It is to build an independent brand, it will be completely different from the collection store, I hope everyone to feel and experience. The road is hard and not easy.

In the future, we shall choose to slow down, develop products (beauty products) that meet the needs of consumers. The beauty industry has encountered various challenges this year. The total retail sales of consumer goods in China for cosmetics was 245.3 billion yuan(about $34.1 billion) from January to August 2022, down 6.4% year-on-year. However, China's efficacy skincare market has been growing rapidly in recent years, with a compound annual growth rate of 23.4%, and is expected to reach 41.1 billion yuan(about $5.7 billion) in 2022. CHAILEEDO invited Lyu Yixiong, founder and CEO of CHICMAX Group, to share with us the cosmetic trends in China. CHAILEEDO: From your perspective, what is the biggest trend in the cosmetics industry next year? Lyu Yixiong: It doesn’t make any sense to discuss the trends next year, because it would be great if the corporate can survive next year. I think the era of rip-off is gradually over, and we have to slowly adapt to the stagflation of the economy. Our generation has never suffered the economic stagflation. Since the reform and opening up, our economy has been growing. However, the future environment is definitely not so optimistic. So, I believe it is necessary to take it slow, and every enterprise should find its own way and its suitable development route. CHAILEEDO: What is the next new channel for beauty industry? Lyu Yixiong: It will be more difficult to rely on offline channels to sell goods. Since cosmetics are must-have which easily affected by e-commerce. However, e-commerce has become transparent and traditional. Therefore, I’m bullish on offline cosmetic lifestyle brands, but I’m still researching. A lifestyle brand should be built slowly with the goal of 10 years. In the future, we shall choose to slow down, develop products (beauty products) that meet the needs of consumers, and not impose on consumers if they do not need them.

The biggest trend in the cosmetics industry in the future is to focus more on self-iteration. The beauty industry has encountered various challenges this year. The total retail sales of consumer goods in China for cosmetics was 245.3 billion yuan(about $34.1 billion) from January to August 2022, down 6.4% year-on-year. However, China's efficacy skincare market has been growing rapidly in recent years, with a compound annual growth rate of 23.4%, and is expected to reach 41.1 billion yuan(about $5.7 billion) in 2022. CHAILEEDO invited Li Qinya, the founder, chairman and CEO of MEISHANG, to share the Chinese cosmetic trends. CHAILEEDO: From your perspective, what are the biggest trends in the cosmetic industry next year? Lee: In recent years, the Chinese cosmetics market has achieved rapid development in a short period of time with the help of opportunities such as capital influx and new channel marketing, and has made amazing industry achievements. 2022, influenced by multiple factors, the cosmetics industry is feeling no small challenge from product development to marketing and promotion nodes, which means that strategies that were applicable in the past now need to be adjusted. Based on this, I believe that the biggest trend in the cosmetics industry in the future is to focus more on self-iteration: providing consumers with better products by continuously improving quality. On the one hand, we will consolidate our product power and focus on internal cultivation of differentiated products with excellent quality and unique brand connotations; on the other hand, we will cultivate our brand communication power and focus on exploring interactive play and topic volume that will move consumers more. Based on these thoughts, MEISHANG will continue to strengthen the product power with core competitiveness in product development, R&D and supply chain. In addition, we are also steadily building brand power and maintaining efficient linkage and interaction with consumers. We are confident about the future: First, the trend of national beauty products in recent years has made more people pay attention to the industry, and a large amount of high-quality talent and resources bring sustainable momentum to the industry development. Second, the market is gradually returning to rationality, although short-term pressure but in the long run is conducive to the benign development of the industry; third, the consumer base advantage is beginning to appear, after the initial market education, beauty and skin care products consumers have a strong sense of national products and brands national pride and self-confidence. Now, it is necessary to traverse the cycle with the spirit of resilient growth, steady development, and sure to go far. CHAILEEDO: What categories are you optimistic about next year and why? Lee: With more and more entrants in the cosmetics industry, the competition in each segment is very fierce. In such a market environment, for consumers, there are very sufficient brands and categories to choose from, which then also promotes the iteration and upgrading of consumer demand. Based on current observations, there is still a broad market in the future for beauty and skincare categories related to "super segmentation needs". For example, the efficacious skin care category is one of the most promising markets. According to Frost & Sullivan, the size of China's efficacious skincare market will be 56.7 billion yuan in 2021, with a growth rate of 33.6%, and is expected to maintain a growth of more than 30%. The efficacious skincare category is a high growth track with high market consumption potential. CHAILEEDO: Traffic is getting more and more expensive, what is the new breakthrough point for brands? Lee: Due to the impact of the epidemic on offline sales channels and environment, online channels and platforms have become the main position of brand marketing in recent years. As the cost of online traffic is getting higher and higher, the traffic ROI is reduced. How to break the "traffic trap" is also a problem that brands in the cosmetics industry are thinking about and exploring. It is difficult to attract the attention of the public with the same content and marketing methods. As mentioned above, in the current market environment, brands need to refine their brand communication power, explore more interactive ways to move consumers and explore the volume of topics, and establish effective and positive connections and interactions with consumers. We think we still need to return to "content". On the basis of solid products and services, brands need to explore users' consumption pain points, gain deep insight into consumers' psychology, and output quality brand content that can trigger emotional resonance and establish deep connections.

Natural and safe, fine skin care and diversified efficacy will probably become the main trend in the future development of makeup removal products. The previous Tmall Innovation Center's "Makeup Remover and Cleanser Market Trends Insight Report" pointed out that makeup remover products still maintain a higher growth rate of 24.9% into 2021. Among the beauty categories, the Top 10 brands of makeup remover have the highest concentration, which shows Pareto Principle. According to rihuayun data, in the first half of this year, half of the top 10 online makeup removal brands were Chinese brands and half were international brands, of which five were Chinese brands, namely Zhuben, Zhiben, KIMTRUE, MAYCREATE, and Perfectdiary. There are five international brands, namely Maybelline, Bioderma, BANILA CO, Nursery, and L’OREAL. Maybelline and L'Oreal are both brands of the L'Oreal Group. The top 10 brands accounted for 46% of the sales, of which the Top 5 brands accounted for 32.3%. From a market perspective, makeup remover oils and creams have replaced makeup remover water as the object of consumer chase. This change brings development opportunities for Chinese domestic brands and may reverse the situation that the Chinese makeup remover market is dominated by international brands. As more and more brands enter the market one after another, the makeup remover market is getting more and more lively. Data shows that the number of makeup remover products filed in 2021 increased by 12% year-on-year. The number of makeup remover product brands on the market is increasing and products are constantly being updated and iterated. Brand businesses choose quality skin care products ODM developed and created by the makeup remover oil OEM products, which is conducive to enhancing brand competitiveness and occupying more market share. Meanwhile, Chinese makeup remover products, after going through the 1.0 stage where cleaning is the main demand, have started to move towards the 2.0 stage where natural and gentle, removing and nourishing are combined. Data shows that the consumption of mild makeup remover products has increased more than 7 times in two years. According to "CBNData: 2021 Makeup Removal Trends White Paper", in the future, under the background of the gradual homogenization of makeup removal products, natural safety, fine skin care, and diversified efficacy will become the main trend of the future development of makeup removal products. The "China Makeup Remover Market Demand and Investment Planning Analysis Report" survey shows that by 2023, China's makeup remover market size is expected to reach 20.9 billion yuan($2.93 billion). As a bridging category of makeup and skincare, makeup remover has become a hot track on the east wind of industry development.

The annual expenditure of Chicmax on marketing and promotion is about ten times its R&D investment. Founded in 2003, Chicmax's main business includes the production and sales of skincare, facial masks, mother & infant, color cosmetics, and personnel cares etc. It has launched several well-known brands in the cosmetic and mother & infant dual sections, including KANS, One Leaf, and Baby Elephant. According to its financial results for the first half of 2022, the group's total revenue was 1.26 billion yuan ($177 million), of which the revenue from the three brands KANS, One Leaf, and Baby Elephant accounted for 93.0% of the group's total revenue. At the beginning of this year, Chicmax filed a prospectus on the Hong Kong Exchanges and Clearing Limited to prepare for its IPO in Hong Kong. In July, its filing lapsed. on October 5, Chicmax filed the form again for the IPO. CHAILEEDO learns that KANS has been the core support of Chicmax's revenue and the main driver of revenue growth during the reporting period. In 2019~2021 three full years, KANS' revenue continues to be high. In contrast, its herbal skincare brand One Leaf has experienced sluggish growth, with the highest revenue among the three major brands in 2019, but continued to decline thereafter, ranking at the bottom of them in terms of revenue in FY 2021. Chicmax explained that the decline in One Leaf's revenue was related to reduced marketing expenses. It is understood that Chicmax's cost expenditures on marketing are perennially high. From 2019 to the first three quarters of 2021, Chicmax's marketing expenses (sales and distribution expenses) will be 1.325 billion yuan ($186 million), 1.536 billion yuan ($216 million), and 1.119 billion yuan ($157 million) respectively, all accounting for more than 40% of the corresponding annual revenue. According to the prospectus, in 2019-2021 and the first half of 2022, Chicmax generates R&D expenses of 2.9%, 2.3%, 2.9% and 4.1% of revenue respectively. According to this calculation, its annual spending on marketing and promotion is about ten times its R&D investment. In addition, according to the official website of the National Medical Products Administration, Chicmax has been repeatedly found to have ingredients that do not match the product approval. In August 2015, KANS was ordered by the Shanghai Administration for Market Regulation to stop publishing an advertisement for "deceiving and misleading consumers by using advertisements to make false propaganda about goods or services". The company was also required to make public corrections within the corresponding scope at an equal advertising cost to eliminate the impact. At the same time, it was fined 1.1 million yuan. However, according to its prospectus, as part of its strategy, the company will continue to invest significant financial and other resources in the future to promote brand awareness and solicit customers. This includes expanding marketing and sales teams, enhancing KOL marketing and acquiring advertising. The effect of vigorous marketing promotion is obvious. Chicmax said the company hired several KOLs to promote its products. During the reporting period, the revenue generated by the company's top five KOLs accounted for 1.8%, 6.4%, 10.3%, and 5.9% of the corresponding year's total revenue respectively.

On October 7, Watsons announced a partnership with L'Oreal ModiFace to develop an artificial intelligence skin analysis tool for Asian skin needs: Skinfie Lab. Skinfie Lab, jointly developed by Watsons and ModiFace, a L'Oréal technology application company, uses artificial intelligence to analyze customers' skin and create the right skin care plan for them. Skinfie Lab is based on 15 years of dermatology research and uses artificial intelligence to analyze over 16,000 selfie images. It accurately detects skin conditions from customers' selfies, including pimples, fine lines, pigmentation, large pores, wrinkles, radiance, skin firmness, and overall skin condition. Customers simply upload a selfie and answer a few simple questions on their phones, and Skinfie Lab provides a personalized and in-depth skin analysis. Additionally, it makes suggestions for items such as cleansers, masks, toners, serums, eye creams, moisturizers, and sunscreens based on the needs of the user. In addition, customers can instantly purchase products from Watsons' online store. Watson said Skinfie Lab is its latest technology application in Asia and aims to provide customers with a comprehensive O+O (offline and online) service experience. Watson Group's Chief Digital Officer for Asia, Wu Yiqun, expressed that he believes Skinfie Lab's ability to upload a photo for analysis will change the way customers purchase skincare products. It is reported that Skinfie Lab will be first launched in Watsons Hong Kong. By early 2023, it will be extended to Thailand, Taiwan in China, Philippines, Singapore, Malaysia, and Indonesia Watsons. The feature is currently available for trial in Watsons App. In addition to Skinfie Lab, Watsons Group's UK retail brand Superdrug has successfully launched an artificial intelligence skin analysis consultant last year. Watsons claimed that the smart analysis system was well received by customers upon launch, and the sales conversion rate has multiplied as a result. In fact, Watsons has also been working to provide more personalized O+O services to customers through AI and AR technology. For example, ColourMe, an AR virtual makeup trial tool also developed in collaboration with ModiFace, has reached 40 million virtual makeup trials since its launch and has increased sales conversion rates fivefold. Modiface was acquired by L'Oréal Group in 2018. Since then, the company's beauty technology for AR swatches has been fully applied to L'Oréal's brands. Earlier, L'Oréal Group announced the appointment of Jeff Houghton as CEO of ModiFace, effective on October 1, 2022. L'Oréal said that ModiFace will next explore further frontier technologies to bring more innovations to them while providing consumers with a better virtual beauty experience.

Winning in Efficacy, Welcome the Future. On September 22, the 5th Conference on China’s Cosmetics Trends, hosted by CHAILEEDO, was held in Hangzhou with the theme of "Winning in Efficacy". During the conference, Duan Zhiguang, Senior Vice President of Giant Biogene, presented the keynote speech "Ingredient Innovation for Efficacy-Focused Cosmetic Brands". The following is the transcript of the speech. My sharing concluded three aspects. Firstly, introducing our company Giant Biogene. Secondly, introducing recombinant collagen. Thirdly, introducing the efficacy of recombinant collagen. Giant Biogene is a company focused on efficacy skincare products, medical dressings, skin revitalization products, biomedical materials, functional foods and special medical use formulations. Our synthetic biology technology platform has two core technologies: recombinant collagen biomanufacturing technology and highly active rare ginsenoside biomanufacturing technology. Our company's star brands under the name of Kefumei, Collgene, Keyu, Kehen, Kefuping, Liyan, SKIGIN and Can’gan, among which Can’gan is involved in the health field. All these research work of our company is done on the basis of many scientific research platforms, such as National -Local Engineering Research Center, postdoctoral research workstation, academician expert workstation, etc. After more than 20 years of development, we have achieved some success. Giant Biogene is now the pioneer and leader in the industry of professional skincare products based on bioactive ingredients in China. We have been able to produce 33 kinds of recombinant collagen and more than 10 kinds of rare ginsenosides using synthetic biology technology. We are the second largest producer of professional skin care products in China by retail sales in 2021, as well as the largest collagen-based professional skincare company in China for three consecutive years since 2019. Our flagship brands of recombinant collagen, Collgene and Kefumei, are also the third and fourth best-selling brands in the professional skincare products industry in China in 2021. Also, Giant Biogene is the first company in the world to achieve mass production of recombinant collagen skincare products, and the first company in China to obtain a medical device registration certificate for recombinant collagen. Next, let's talk about recombinant collagen. 1.What is collagen? Before talking about recombinant collagen, I will give a brief introduction to collagen. Collagen is a particularly important type of protein in animals, including mammals, and is highly abundant in animals, as well as an important part of the extracellular matrix. The basic unit of collagen in humans, for example, is a triple helix molecule formed by three alpha chains. It is solid and insoluble in water. The molecular weight of one molecule of collagen is about 300 kDa. These collagen molecules are interwoven into a net-like structure and intertwined with elastin and some polysaccharides to form a skin rejuvenation state, making the skin firm and elastic. There are many uses for collagen, and protein materials represented by collagen are important for people's livelihood and national defense. Our country's "Made in China 2025" action plan includes functional proteins in the 9th item of biomedical and high performance medical devices and the 10th item of new materials. Collagen is the material with the lowest immune rejection and the best biocompatibility among all protein materials that we have found so far. 2.Advantages of using synthetic biology technology to obtain collagen Faced with such a good material, our first thought was how to get it. Early on we used collagen from animals or human body. But these two options are not perfect. In this case, the best way is to use synthetic biology. We have been doing this field for more than 20 years and have accumulated some experience. Although the concept of synthetic biology was proposed by the French as early as 1910, it has become widely-known in the past few years. I believe there is still a group of Chinese researchers who are dedicated to technology and have been continuously researching in the field of synthetic biology. But from the present results, there are not so many yet, because there are high technical barriers in this industry. I will focus on the following three types of recombinant collagen. The first type of recombinant collagen is fragment repetition and fragment splicing, for example, the efficacy of the fragment from type I and type III can be spliced and combined, so that two functions can be achieved at the same time, or three functions at the same time. We have a total of 25 kinds in this type of recombinant collagen. In the second category, we have expressed full-length type I, type II and type III recombinant collagen (alpha chain) from Saccharomyces cerevisiae and Saccharomyces cerevisiae respectively, which is a core ingredients for us to develop more medical products in the future. In addition, in the field of beauty, especially in the field of skincare, we are more concerned about whether collagen can be absorbed transdermally and how it is absorbed by the skin, so we also made the third type of recombinant collagen, which is some efficacy fragments. In this case, a small molecule can carry a large molecule into the skin through a non-covalent bond through formulation system optimization and supramolecular technology. Giant Biogene has launched the brands Kefumei and Collgene, and has now been working in this field for more than 20 years. Our products are sold in more than 1,000 public hospitals, more than 1,700 private hospitals, and more than 300 chain brand pharmacies in China. Our products also cover mainstream e-commerce platforms, including Tmall, TikTok China, JD, Xiaohongshu, and Pinduoduo, etc. We believe that more and more companies are entering the sector of recombinant collagen. With the continuous progress of technology, it will become larger and lower in cost, which will surely benefit consumers in the end. I also believe that with so many excellent companies walking together, the future beauty market will definitely get better and better. Q&A: What are the future trends of application on recombinant collagen? Duan Zhiguang: I think the most application should be the medical field, such as medical devices. Currently the recombinant collagen is applied in artificial bone, including some bone powder and some injectable products. The injection products are very good from the market, and we expect it will become a stronger growth point for the company in the future (the moderator added: this is concluded Class III medical device). There will be new brands of Class III devices in the future.

Winning in Efficacy, Welcome the Future. On September 22, the 5th Conference on China’s Cosmetics Trends, hosted by CHAILEEDO, was held in Hangzhou with the theme of "Winning in Efficacy". During the conference, Nikita, co-founder of C+Beauty, presented the keynote speech "The Secret of Fast Growth of Efficacy Mask". The following is the transcript of the speech. Hello, I'm Nikita, and today I'm invited by CHAILEEDO to talk to you about my thoughts on rapid growth in the past year. I hope we can have more discussions with everyone here and grow together rapidly. Our brand is C+Beauty. And our positioning is a scientific and precise skincare efficacy brand. We found that in addition to efficacy, new consumers have more requirements for skin feeling, pleasure and social topics. The skincare products they like are not just the products that packaged by traditional type. They hope that when they wear cosmetics, they can gain some fun to share with their friends. Looking back at our past history, C+Beauty was officially launched in March last year, and the GMV of our brand on one of Chinese leading e-commerce platform Tmall exceeded 10 million yuan in June last year. The GMV of TikTok China reached 10 million in July last year. The entire sales of C+Beauty in 2021 have broken 100 million. So we have ranked the first in some segmented categories of facial mask. We are also the only beauty brand in the Top 10 “TikTok Brands” last year.(TikTok Brands: By posting quality short videos on the TikTok platform. It quickly achieved the original accumulation of followers and then successfully create its own brands based on its own private domain traffic.) We did a very large range of consumer research before launch. We found that consumers have 5 different considerations for mask use or purchase. The pain points of the consumers are: 1. inconvenient. If a facial mask only costs 1 yuan per piece, its effect could be none. This is a very obvious disadvantage. Compared to the small-pack facial mask that only hundred grams for one mask, the traditional facial mask is not easy to carry or storage. 2. Not easy to used up. After using it for one or two months, the jar-formed mask began to dry and crack. Consumers will have a burden to choose, spent hundreds of money to buy so many bottles, can not use up, or not suitable for the skin, and can not be returned, a waste of money and a waste of facial mask. 3.Consumers don’t know how to choose. Because now KOLs will recommend a variety of products to consumers. They will receive different information thus they do not know how to choose, but also afraid to buy is a waste, not suitable, the efficacy of the experience will be quite a lot of different pain points, these pain points are very subdivided. Not suitable, not good is also the efficacy of pain points. When we put them all together and found an opportunity to make a small-pack mask, we didn't mean to make it that way. But we did find so many pain points, then we wanted to make a product that was effective, but affordable for consumers. And how should this be designed? If a 25-year-old woman lives in Hangzhou, she will have at least 3 different problems on her face. Her T-zone may need to remove oil, or cleaning needs such as blackheads. Her cheeks may be dry, or easy to skin red, she will need to replenish moisture, soothing needs. Then there are fine lines in certain places so she may be have anti-aging needs. When we give a particularly precise solution to the segmentation needs, they will be easy to choose and willing to try and repurchase when they feel good. Our team also has more than 20 years of skincare experience, and many of them are from the core staff of various international brands. The big international brands have realized the importance of the Chinese market, but their R&D and foundation is still based on Western skin. However, we still need to target Chinese skin in China. Because in the past, each formulator understanding and cognition are relying on manual to read reports and communicate with people. To a large extent, we all rely on experience to choose which formula, or which technology is the most effective. At present, although we have only been established for one year, we have already used some very advanced technologies in formulating or developing products based on our past technologies and accumulation. In addition to doing a lot of research on ingredients, we are more interested in using medical technology to solve skin penetration problems. This includes the development of oxytocin with the Institute of Chemistry, Chinese Academy of Sciences, which is effective in the treatment of psoriasis, and then we use it in our skincare products. We have also done a lot of scientific tests and found that the penetration rate of the efficacious ingredients is 96% higher when the oleophores are used for oil control ingredients compared to the original equivalent ingredients. And it can really reach the dermis layer without the risk of skin breakage and skin burden. Indeed we want to build a national product barrier. In addition to the ingredients, but also from the technology to put more effort. To sum up what we have just said, we believe that every small demand has a chance to become a big business, just how to better insight and organize it. At the same time product innovation in today's time, to be more extreme, or extreme a little. Finally in the operation side more than just refinement of reach. More is when you expand, the efficient synergy of various channels to achieve the development of a region-wide organization. We are still a relatively small brand, but we still hope to provide the mass consumers with the ultimate cost-effective products at the mass consumption level, which is a very big thing. With our love for cosmetics, research and refinement, we believe we still have the opportunity to grow and develop together with everyone in the future. Q&A: The rise of the category of essence-level small-pack mask is efficient, what is the next strategic upgrade direction of the brand? Is the brand expansion to do extension or continue to deepen the mask category to the small-pack mask to play a broader, more transparent? Nikita: Small-pack mask is our entry-level products. Because the mask, to be frank, in such a competitive category, we can not make much money. But it is wide enough to reach a large enough consumer. People are willing to try. We will be willing to make an entry-level product. Why we will do 15 efficacy, which is growing out, consumers will continue to ask in different channels, we started out with a few efficacy: cleaning, moistening, brightening, anti-acne. When we achieved cleaning mud mask, we slowly found that the oil skin corresponds to a greater demand for cleaning, most of them are people with oily skin. So the oil skin will be more and more. Based on this, we will provide a series of solutions corresponding to oily skin. In addition, we have four to five million users, sensitive skin users will also increase. We will also make a series of solution products for sensitive skin, so as to extend out.

Recently, “corporate survival” has become a hot topic. The beauty industry has also encountered various challenges this year, but the competition of efficacy cosmetics is still fierce. CHAILEEDO invited Xing Hui, CEO of Zhejiang Eserch Pharmaceutical Technology Co., Ltd., to share with us the trends in Chinese cosmetics. CHAILEEDO: From your perspective, what is the biggest trend in the cosmetics industry next year? Xing: Higher quality, more technology and more segmentation. (1) Since 2021, China has intensively issued policies and regulations, made clear regulations on children’s cosmetics, cosmetic efficacy, cosmetic labels, cosmetic ingredients and safety evaluation, and provided specific rectification plans for non-compliant behaviors. The supervision of the cosmetics industry was strengthened, and the development is gradually normalized. The promulgation of relevant policies and regulations has accelerated the process of eliminating inferior enterprises, forced cosmetics enterprises to improve their own construction, further improved powerful cosmetics enterprises, and promoted the high-quality development of the cosmetics industry. (2) The trend of skincare with science and technology is developing increasingly. Now, consumers pay more attention to the quality of products, the safety of product formulations and the research and development of technology. The focus has gradually changed from impulsive consumption due to demand outbreaks to rational consumption that comprehensively considers products before placing orders. Consumers are more willing to pay for cost-effective products with good ingredients. In this era, focusing on skincare ingredients and technology research and development to bring consumers a better product experience will become the biggest trend in the industry. (3) In today’s increasingly competitive industry, it is more promising to focus on market segments. Online channel traffic is getting more and more expensive, while offline stores are suffering from the decline in consumption and the impact of the pandemic. Skincare companies, especially new brands, should think highly of market segmentation based on a specific population, usage scenarios, and body parts, realizing the breakthrough from market segments with intensive cultivation. CHAILEEDO: What are the trends of new ingredients in the cosmetics industry next year? Xing: First, in terms of efficacy, the competition of efficacy skincare remains popular, and active ingredients largely determine the efficacy of products. With the tightening of industry regulation, consumers’ focus on skincare products has advanced to product functions, concentrations, activities, and formulations. The entire development of new ingredients will be carried out to meet these market demands. Now, the persistent high demands include moisturizing, and anti-oxidation/anti-aging, while the rapidly increasing demands include whitening and freckle removal, soothing and repairing, etc. For sun protection efficacy, new safety and efficacy sunscreen ingredients are in urgent need of development in the market. Second, in terms of sources, the development trend of new ingredients is “natural and sustainable”. From a policy perspective, the relevant regulations on cosmetics clearly encourage and support the use of modern science and technology, combined with our country’s traditional advantageous projects and characteristic plant resources to research and develop cosmetics. In addition, the awakening of public awareness of environmental protection also makes “natural”, “safe” and “efficient” cosmetics more popular. At present, many brands are promoting the concept of “sustainable” and “environmental-friendly” by emphasizing that no harmful substances or risky ingredients are added. Manufacturers of industry-related ingredients are committed to developing new ingredients that can combine science with nature to ensure that the natural or naturally extracted ingredients of products can not only work but will not impair human health and the environment. Due to the relatively high manufacturing difficulty and high technical barriers, ingredients without preservatives are also the key point of development. Third, in terms of technology, more and more biomedical technologies have been applied to the development of cosmetic ingredients. Relying on the development of modern biotechnology such as bioengineering and genetic engineering, the technological content in cosmetic ingredients has been qualitatively enhanced. For example, active polypeptide ingredients naturally exist in human skin, with high safety performance, as characterized by low concentration and high activity. With the support of biological fermentation technology and synthetic biology technology, peptides and active protein components will become an important development direction in the future. Moreover, the development of active ingredients will further study the endogenous skin mechanism, such as skin epigenetics, genomics, etc., rather than the skin structure. CHAILEEDO: Will synthetic biology replace animal and plant extracts? Xing: Now, the production technologies of ingredients mainly include four types: animal and plant extracts, chemical synthesis, biological fermentation, and synthetic biology. Natural plant extracts become a fever under the clean beauty trend. At present, consumers are more considerate of green health and life quality, and the clean beauty that claims to be natural, safe, and effective begins to win consumers over. Clean beauty, broadly speaking, is to use pure, safe ingredients and sustainable manufacturing processes to produce safer and more environmental-friendly products. With the pursuit of a natural, hypoallergenic and green formula, it aims to reduce the burden on the skin during use. Some leading international ingredients companies take natural plant extraction technology as one of their core competencies. For example, Crodarom, the sub-brand of Croda, is dedicated to plant extracts through self-developed microwave extraction and ultrasonic-assisted extraction technologies, which can subdivide all combination parameters to select more effective plant extraction technology, reduce environmental pollution, and achieve personalized customization. In a certain period, natural animal and plant extracts are still one of the important sources of cosmetic ingredients. Synthetic biology is the frontier of the new life sciences and the future direction of production technology. In short, the goal of synthetic biology is to program DNA to instruct an organism to respond according to designed specifications to produce the substances we need. The types of cosmetic ingredients that can be developed at present include natural products, such as astaxanthin, resveratrol, glycosides, squalene, etc. With the breakthrough of the underlying technology of synthetic biology and the continuous application of many technologies such as gene editing and enzyme-directed evolution, we can quickly realize the manufacturing of known cosmetic ingredients and greatly shorten the development cycle of new cosmetic ingredients. More interestingly, synthetic biology can break the restrictions and produce some active ingredients (such as recombinant collagen, etc.) derived from scarce animals and plants on a large scale, and at the same time continuously produce many new ingredients and new molecules that cannot be synthesized by traditional chemistry. Since the ingredients of synthetic biotechnology are usually renewable resources such as starch and cellulose, it can not only further reduce costs but also effectively solve the high energy consumption and high pollution of chemical production. The production process becomes greener, safer and more environmental-friendly, obtaining high economic output at smaller environmental costs, which is more in line with the national development plan of “emission peak and carbon neutrality”. Synthetic biology represents faster innovation, which means faster product iteration, stronger growth potential and more market space for imaginative products, and it will gradually replace traditional ingredients production methods in the foreseeable future.