Recently, the human homologous C3 recombinant collagen independently developed by the synthetic biotechnology skincare brand STEE HILL was the first to achieve a human skin permeability test. CHAILEEDO learned that collagen is vital to human health and beauty, but as a large molecule, its permeability is a technical problem that has not been overcome, and it has never been demonstrated to really achieve permeability in human in-vivo skin. This time, STEE HILL adopted photoacoustic technology for the human in-vivo permeability experiment, and the technology and experiment were jointly completed by Chinese scientists Liu Chengbo's team and Zhang Guangxian's team. This technology presents the whole process of collagen being effectively absorbed by the skin, pioneering the first skin penetration technology in the beauty industry, and also solving the industry problem of "difficult absorption of collagen". It is worth mentioning that the world's first recombinant collagen human in-vivo skin permeability experiments abandoned the traditional pig and cow skin animal experiments. Instead, the human homologous recombinant collagen C3 solution was applied to the subject's skin, and the whole process of dermal penetration was visualized through photoacoustic/fluorescent confocal microscopic imaging technology. It is reported that this recombinant collagen of STEE HILL C3, which can penetrate the living dermis of the human body, has been registered in the information database of Chinese cosmetic ingredients and declared for Chinese and foreign patents. Li Jia, the founder of STEE HILL brand, said that STEE HILL brand was founded with the goal of getting rid of the dilemma that the raw materials of China's beauty industry rely heavily on overseas imports. Nowadays, in the development and application of C3 collagen, Chinese synthetic biology begins to lead the world. For the rise of China's beauty industry, independently developed advanced technology and core raw materials are indispensable. It is known that STEE HILL is a mid-to-high-end skincare brand of Meishen Biologicals, and it is also the only new brand in China's beauty industry that is positioned in synthetic biotechnology skincare. Its main product is the "3C baby collagen" series. The brand has already developed a number of products such as creams, serums, lotions, cleansers, and medical dressings based on C3 recombinant collagen. In the second half of 2021, STEE HILL's Tmall flagship store will be opened and a full line of recombinant collagen skin care products will be launched. According to the brand, it officially operated in Q4 of 2021, with a growth rate of over 200% compared to Q3, achieving a gross profit of 87% and a repurchase rate of over 25% of sales data. In August this year, STEE HILL completed tens of millions of RMB angel round financing. Furthermore, STEE HILL has also cooperated with two prominent bio-industry leaders, such as Bluepha and Shandong Focusfreda Biotech, as well as dozens of opinion leaders in the beauty and skincare field, such as Yanantang and Tsinghua skincare senior Wang Zhi, to jointly launch the "Exploitation of the Works of Nature" clean beauty biological raw material library, and jointly initiative for new synthetic biological alternatives to chemical synthetics, zero microplastics in raw materials and production processes, simple and degradable packaging materials, and more alternative technologies to animal testing.

The trends of new cosmetic ingredients is two key: high quality and innovation. 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 Tao Fuping, CEO of Hangzhou Viablife Biotech Co., Ltd., to share with us the trends of Chinese cosmetics. CHAILEEDO: From your perspective, what is the biggest trend in the cosmetics industry next year? Tao Fuping: Personally, I think that the biggest trend in the cosmetics industry next year is new products that made in China, which represented by Chinese brands will increasingly win approval from consumers. It’s not even a short-term trend for next year, but a mid- to long-term trend. Whether it is the enhancement of the country’s comprehensive strength, the growth of a new generation of consumers, the self-confidence and pride of the people, or the increasing competitiveness of Chinese brands, Chinese enterprises, and Chinese ingredients, they will eventually converge into a major trend, that is the new Chinese products will become more and more popular, even going overseas. CHAILEEDO: What are the trends of new ingredients in the cosmetic industry next year? Tao Fuping: The trends of new cosmetic ingredients can be concluded into two keywords: high quality and innovation. As information becomes more and more transparent, consumers pay more attention to ingredients and become more and more professional in understanding the ingredients. Ingredients have become a significant factor in the competition in cosmetics industry. Thus, making high-quality ingredients is in line with future consumption upgrades and high-quality development. Applying more new technologies and creating more new ingredients can bring more efficacy and create more value to consumers. CHAILEEDO: Will synthetic biology replace extracts of animals and plants? Tao Fuping: As a very hot topic in the past two years, synthetic biotechnology has attracted a lot of attention, and there is a lot of room for imagination in the future. As an emerging comprehensive technology developed in the last decade or two, synthetic biotechnology achieves a balance between green environmental protection and large-scale production through the transformation and reconstruction of various organisms, making the biological transformation and reconstruction more scientific, precise and controllable, which can better serve human society and empower industrial development. However, I think as a promising new technology, the emergence of synthetic biotechnology does not imply to replace existing technologies, such as animal and plant extracts and chemical synthesis, but rather to better serve various industries, including the development of the cosmetics industry, to bring consumers greener, healthier, more efficacy products and technologies with excellent quality and reasonable price. There are many excellent technologies and products with existing animal and plant extracts as well, for example, Chinese herbal medicine components are not a single ingredient, but a natural mixture. And chemical synthesis also has some technical processes that are green and environmentally friendly. Therefore, synthetic biotechnology complements existing technologies, rather than replacing them. It serves industrial development and human well-being together with existing good technologies and products.

The current DAU of TikTok has exceeded 600 million and the penetration rate of TikTok E-commerce will further increase next year. Recently, "alive" has become a hot word, and the beauty industry has encountered various challenges this year, but we can also see that the efficacy of cosmetics track is still lively. CHAILEEDO invited the General Manager of the Operations Department of RUOYUCHEN, Po Tian, to share with us the Chinese cosmetic tends. CHAILEEDO: From your perspective, what are the biggest trends in the cosmetic industry next year? Po Tian: First of all, under the background of a recurring epidemic, pressured consumer environment and limited business growth, the sink market has become an important battlefield for brands to compete due to the large population base and strong consumer willingness, and it is predicted that big international brands will further capture the sink market in the next few years. They may also take the "people-friendly" route in their marketing strategy, which will to a certain extent weaken the competitive power of Chinese brands, leading to increased competition in the industry. Secondly, with the rise of the ingredient-centric and the use of collagen and other higher-order ingredients, consumers have higher demands on skincare products, and brands with real technological strength will further strengthen their advantages, such as BLOOMAGE BIOTECH, WINONA, PROYO, etc. Meanwhile, the emerging market of recombinant collagen and artificial biosynthesis will have some development potential and room for development. CHAILEEDO: In your opinion, what changes will there be in the online channel next year? Po Tian: The penetration rate of TikTok E-commerce will further increase next year. In the era of traffic dividend, business is wherever people are. The current DAU of TikTok has exceeded 600 million, so we can see that users are the key force of TikTok ecological prosperity. Although TikTok is still relatively restrained in terms of E-commerce, based on this background, the growth rate of TikTok E-commerce has far exceeded that of traditional E-commerce, and the TikTok E-commerce ecology is gradually improving, so we are continuously optimistic about the development of TikTok, which is an important field for brands to seek new incremental business. This is why we invested in TikTok service provider MOFAN this year. CHAILEEDO: When will the brand that developed and relied on TikTok appear? Po Tian: To some extent, TikTok brands have already appeared, such as old brands that have turned red like Proya and YAYA, as well as new brands in the clothing and fruit wine categories like local apparel brand WHITE T-SHIRT and low-degree fruit wine brand Seventeen Light Years. For new brands to grow fast and become a TikTok brand on the E-commerce platform, they must find the right track, continue to develop, plant a wide range of grass, and find the differentiated selling points of their products, and only through the scenario-based bring-in and the layout of the influencer matrix do they have a chance to break through. In general, the ecological environment of TikTok is actually very friendly to white label goods, and TikTok gives more rights and support initiatives to new brands, so there is still a great chance to become a TikTok brand. CHAILEEDO: Traffic is getting more and more expensive, what is the new breakthrough point for brands from the perspective of agency-operators? Po Tian: New products and content are the key. Mainly divided into 2 stages, the first stage, the existing traffic can be efficiently undertaken and have a good repurchase ability (whether it is the same product repurchase or cross product repurchase); the second stage, according to the product differentiation selling point (preferably to be able to reverse customize the product according to the user's needs), refining the core scenario-based content communication, and then combined with TikTok AD and influencer matrix to do a lot of traffic import, in order to convert and enhance traffic-to-cash. At the same time, cross-category operation is also the next breakthrough for brands after the traffic dividend disappears, which can break the existing industry perception and operational restrictions, and also bring new consumers to the brand.

This return of MG to offline is an attempt to create a second growth curve for the brand. Recently, L'Oreal Group announced that MG's first national specialized beauty salon has landed in Jiaozhou, Qingdao, returning to the offline channel. It is reported that, as the brand's "first store" to return offline, MG has cooperated with Zeyan, a well-known local cosmetic chain store, to return to the CS channel through professional beauty salon products + services. Since its establishment in 2018, Zeyan Beauty Collection Store, with 18 stores and nearly 10,000 members, has been an emerging force in the booming beauty retail industry in Northeast China. For many years, the cosmetic store channel has been a strategic core channel for L'Oreal Group. Affected by the pandemic and various factors, the growth of the beauty industry this year lagged behind the overall growth of total retail sales of consumer goods, while L'Oreal achieved double-digit growth in the cosmetic store channel. Compared with many other channels, the offline channel has the advantage of not only offering a diverse product selection but also having better consumer reach ability and continuously improving the ability of service and experience., said Ke Maide, the L'Oréal China Vice President and General Manager of Consumer Products Division. Lin Xiao, the General Manager of L'Oreal China's Consumer Products Division New Retail and MG brand, said that nowadays, consumers are more cautious in their purchasing behavior decisions, and they pursue higher quality, more cost-effective, and more personalized products and services. Based on industry trends and consumer changes, L'Oreal has tailored its strategy for the cosmetic store channel to diversify products, commercialize services, interactive with the whole area, and differentiate channels. Public information shows that MG, founded in 2003, with an affordable + original "single-piece sales" model, has ranked top among China's domestic masks. In 2012, its sales exceeded 1 billion yuan ($141 million), occupying 26.4% of the Chinese mask market. In 2014, MG was acquired by L'Oreal. According to L'Oreal's financial report in the first half of 2016, MG's market share fell to 2.1%. In 2018, L'Oreal made the first channel adjustment strategy for MG, which is a full-shelf removal from Watsons. It is known that Watsons was once the main sales channel for MG. The data of 2013 showed that MG's retail sales in the Watsons channel amounted to 470 million yuan ($66 million), contributing to 70% of its total sales. L'Oreal responded at the time that MG's exit from Watsons was a strategic decision by the brand to make e-commerce as the brand's main channel. After shifting from offline to online, that year, L'Oreal's financial report revealed that MG had gained double-digit growth. Previously, Lin expressed that the online traffic bonus is disappearing. This time, MG returned offline in order to create a second growth curve for the brand, which is also in line with L'Oreal Group's strategic plan for MG.

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, Xie Yong, Chairman of Beijing Dr. Plant Biotechnology Co., Ltd. gave a keynote speech on "Trends in Botanical Skincare". I think that the trend in the future must be traditional. Only the national and traditional ones are international and potential. For our brand: Dr. Plant, you may not know much about it. This company was founded in 1994, and I didn't decide to open the first offline store until 2004, because we found that the Chinese cosmetics channel hegemony was particularly strong. What does channel hegemony mean? To be a brand, the first thing you have to do is to be a channel. There is no second choice, there is only one choice, to open a single brand store. Why does Dr. Plant open single-brand stores? In fact, early botanical skincare is closely related to Western medicine. Medicine in China is Chinese traditional medicine and Chinese herbal medicine in previous time. Western medicine is essential oils, that is, plant skincare.. Like many clothing brands that were often founded by tailors, many of the old European cosmetic boutiques started out by selling essential oils from plants in skincare stores. Only after industrialization came supermarkets, department stores, and large unified markets like the United States established new rules for large channels. Botanical skincare comes from single brand stores, which is the most traditional way of survival for single brand stores, but at the same time, botanical skincare represents the future. Why? The competitive industry and the the environment have long made this clear. The shape of the future must be a single-brand store. The reasoning is particularly simple, because only customers can get the perfect brand experience and service when they go to the store. Of course, some people will think that the Internet era will eliminate offline stores. I take the complete opposite attitude, I think the Internet will stimulate the rapid development of single-brand stores. The Internet is just a technology, our company has 100 people in IT research and development. IT gives wings to single-brand stores, and many of our transactions are already online. But one thing is very important, the irreplaceable endorsement of the brand, is that there must be a store. Consumers like your brand because it has a store. Why? We can imagine something as important as skincare products. Then a customer bought a bottle of skincare products online and the next day the link can not be found. The customer will think it is not unreliable. But if there is a store, you can go to the store to ask the staff to solve your problem. This is particularly important. Since we are talking about trends, I would like to review the development path of plant-based skincare of Dr. Plant. Founded in 1994, we were a cosmetic agent in Beijing. As I said earlier, after ten years of thinking, we decided that we had to open a store, a franchise store. At that time, it was also a franchise store focusing on botanical skincare, and many other brands were sold in our place. After another four years, we transformed into a botanical skincare specialty store, a single brand specialty store. By 2014, we worked with the Kunming Institute of Botany, Chinese Academy of Sciences to discover the clean beauty from alpine plants. Then our brand Dr. Plant was created. This year, we will focus on the dendrobium ingredient. Just now at the beginning I said an answer to what is the future, plant-based skincare is the future. Where does it come from? From tradition. We have been using botanical ingredients for skincare since the Han Dynasty. For example, dendrobium has been used in skincare products for a long time, and the local people in Yunnan would use the green thorn fruit to apply to babies when they have rashes. We only did one thing, purify the botanical ingredients, produce them industrially, and then use them in cosmetics. Why is that? Because people believe in tradition and heritage, and it's hard to build trust in something new. For example, some very new chemicals, cultivation methods, its damage we do not even know. Now the industrial age is only about 200 years old, and some chemicals and genetically modified technologies are only a few decades old, so there is a lot of uncertainty. But one thing is for sure, what our ancestors used for thousands of years, this is for sure, that's why the future must be traditional. And again, a fact, the whitening aesthetics of China and the West are not the same. Westerners like wheat-colored skin while China advocates whitening skin tone. We work with an Italian company that specializes in skin reviews, and they have orders from many brands around the world. The task list for a well-known brand of efficacy products says that they are looking for 30 white women to do a trial. That means they are not doing the test for Chinese people, but for white people. In addition, the skin structure of the East and West is different. Easterners have a thin stratum corneum and high water content in the skin. This determines two problems: if the stratum corneum is thin, the skin is fragile and easily sensitive. If the water content is high, it means less hydration products can be used. Our skin must be natural and safe, what is natural and safe? It is plant skincare. Now the country has also started to encourage various special plant cosmetic ingredients, so there is no need to worship those ingredients whose names you can't even remember, we have good things ourselves, such as dendrobium. We spent 8 years researching dendrobium active essence. Q & A: Many offline chains have disappeared, why is Dr. Plant so successful offline? Xie Yong: It is persistence. There is no good way. In fact, it is a very simple thing to say, but I think persistence is one of the most difficult things. I especially like Warren Buffett's quote, "A man only needs to be rich once in his life." We don't need to change careers, we have everything if we do one thing thoroughly, that's the value of persistence.

In addition, the market of personalized, diversified and high-quality products will further expand. 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 Junichi Tanaka, General Manager of Kao Business to share with us the cosmetic trends in China. CHAILEEDO: From your perspective, what are the biggest trends in the cosmetic industry next year? Junichi Tanaka: In the future, Chinese consumers' awareness and knowledge on cosmetics will continue to soar, and the demand for personalized, diversified and high-quality products will further expand. In order to respond to diversified customer needs, high efficacy brands will emerge in the affordable market, providing consumers with a richer choice. At the same time, the high-end market will also maintain a steady growth trend. CHAILEEDO: Which categories are you optimistic about next year and why? Junichi Tanaka: At present, the demand for "safe and secure" products that can be used by sensitive skin is expanding. On the other hand, although consumers currently have a high demand for "anti-aging" products, the demand for products that can achieve both "peace of mind and safety" and "high anti-aging effect" will increase even more in the future. In this regard, Kao will continue to focus on research and development and do its utmost to contribute to improving the quality of life for sensitive skin. CHAILEEDO: What is the next big thing for live channels? Junichi Tanaka: Compared to the current practice of relying on top KOLs, the independent operation of brands will become important in the future. Specifically, in the future, live broadcast will not be limited to product promotion, but to improve the quality of activities that can accurately convey the characteristics and advantages of products to customers. When the quantity of information is converted to quality, it will further enhance customer loyalty, strengthen brand and product value, and create growth opportunities.

Mask with good efficacy may help sheet facial mask become popular again. 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 Cui Jing, General Manager of COSMAX (China) and Vice President of COSMAX Group, to share with us the cosmetic trends in China. CHAILEEDO: In the face of regulation changes, what are the 3 most important initiatives for companies? Cui Jing: The first is to strengthen responsible management and assume the role of registrant/filer. Secondly, the company should establish COSMAX (Shanghai) Testing Technology Co., Ltd. to provide value-added services such as efficacy testing. Thirdly, the company should focus on internal regulatory talent training and strengthen the talent team. CHAILEEDO: Where is the next breakthrough for efficacy cosmetics? Cui Jing: I think the next breakthrough is efficacious ingredients. On August 29, COSMAX held its first ingredients supplier strategy meeting. As a cosmetic R&D producer, COSMAX understands that mastering ingredients is the "core chip" of development. From 2018 to 2021, COSMAX has increased the number of new Chinese local ingredients introduced by 2800%. COSMAX has already established a process for introducing new ingredients and will strengthen its cooperation with local ingredients manufacturers in the future to gain a head start in the development of effective cosmetics. CHAILEEDO: What other market opportunities can be explored for facial masks next year? Cui Jing: High efficacy sheet facial mask, interesting one-use masque may become the new direction. As a former fashion item which is sold online, the sheet facial mask has experienced development like a roller costar in the past few years, which was from "unknown" to "extremely popular", and then fell from the peak. Now it may come in handy someday. Excess capacity, price diving, product homogenization resulted in the sheet facial mask into the development of exhaustion. In the future, high efficacy may become a key for making the sheet facial mask to become a heated products again. It is said that fashion is a cycle. I think the mask market is also a cycle. Perhaps the saturation of the sheet facial mask market, masque has the momentum of a rebound. These two years, there have been a number of masque with disposable concepts have become popular. This interesting packaging catered to the using habits of young consumers, like a revolution swept the facial mask market. Cost-effective jars of masque seem to have disappeared from the market, one-use masque become the favorite of the market.

Essence products, with their characteristics of high efficacy, high ATV, and high repurchase rate, have become a must-compete section for brands in China and overseas. From basic skin care to essence, consumers' requirements for facial care are becoming more and more refined, and the essence market has also risen. Recently, according to the data of 2022 Facial Essence Online Consumption Trend Insight by Guoji-Feigua Data, essence products, with their characteristics of high efficacy, high average transaction value (ATV), and high repurchase rate, have become a must-compete section for brands in China and overseas. According to previous data from Beauty Data.AI, China's facial essence sales exceeded 17 billion yuan ($2.363 billion) in the past year, accounting for 10.5% of stable sales in the area of skincare. Data show that the 2022 facial essence market CR5 in TikTok China is only 16%, and the industry concentration is low. For a long time, the highly technically advanced essence market has been held by international head brands such as Estee Lauder, Olay, etc., which have shown a solid market share in the TikTok China platform. Meanwhile, local Chinese brands are also following up on the victory. According to Feigua data, among the Top 10 brands in facial essence sales from January to July 2022, Chinese local brands occupied a total of 6 seats and maintained high growth. It is worth noting that anti-aging has become the focus of Chinese consumers of all ages, and the post-00s have joined the anti-aging group. In this year's Tmall 618 shopping festival, the search volume of "anti-aging" keywords jumped 5 times compared to last year, and the number of orders placed by post-00s was 3 times more than last year. However, the main consumer of the facial essence category is still the pre-mature age group above 31 years old, accounting for more than 50%, and the demand for wrinkle removal and anti-aging is particularly strong. According to a report released by Tmall FMCG industry, TMIC, and Ipsos, "Vitamin-C for morning and Vitamin-A Alcohol" has been popular since last year, with a year-on-year growth of 217% in keyword searches. Moreover, in the concept of anti-aging, in addition to the popular "antioxidant", many brands target the "anti-glycation" section for product development to occupy the market share early. With the rise of the ingredient-centric group, Chinese consumers are paying more and more attention to the efficacy of products. Among them, the main anti-aging efficacy of astaxanthin, and hyaluronic acid ingredients market enthusiasm has been high. As Chinese consumers become more knowledgeable and experienced in skincare, they continue to learn about their skin type and needs and begin to put forward higher demands on the concentration, purity, and ratio of ingredients. This has also led to the development of facial essences in the direction of precision and scientific efficacy. It is worth mentioning that in recent years, many brands have launched new facial essence in a small dosage form. These products have achieved innovation in multiple dimensions such as packaging materials, ingredients, formulations, and technology. For example, the disposable serum is loved by many Chinese consumers by virtue of its aseptic plastic seal, compactness, and lightness. According to Feigua Data, in 2022, "disposable" has become a hot keyword for mid-to high-end head brands in the facial essence market.

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, PMPM's co-founder and CMO, Guo Wenci, brought a keynote sharing on "The Inflection Point of Emerging Brands". Hi everyone, I'm Guo Wenci, the co-founder of the emerging skincare brand PMPM. I am very happy to receive an invitation from CHAILEEDO today and have the opportunity to chat with you. As an emerging brand, I would like to talk to you today about the inflection point of emerging brands. First of all, I purposely went to look up the information. If you look at Fortune magazine's survey on the survival rate of Chinese startups, you will find that less than 7% of startups can survive for more than 5 years, and less than 2% of startups can survive for more than 10 years. So let me summarize simply and crudely, 93% of start-ups will die easily within 5 years. This is the 3rd year of PMPM and we hope to traverse the Product Life Cycle. we hope that over time, each time we hit an inflection point, companies and brands can move up, not down, so that they can keep traversing the cycle. In the consumer goods industry, if we want to determine whether a new consumer brand has survived the 0-1 cycle, we usually say it has to go through two stages. The first stage is whether it has broken 100 million in sales, and the next stage is breaking 1 billion. Today a consumer brand can start from 0 to finish accumulating 1 billion sales, then it is the completion of the first life cycle. I looked at the history of China since the reform and opening up 40 years ago, and as the times progressed, how long did it really take for each brand to go from 0-1 billion since its birth. For example, the first foreign brands to enter China during the reform and opening up period, such as Nike, which first entered the Chinese market in the 1980s, took 24 years to go from 0-1 billion. As brands are established later and later, we find that the time it takes to go from 0-1 billion is getting shorter and shorter. For example, Li Ning took 13 years, Banana took 8 years, Genki Forest took 4 years, and PMPM took 1 year. It's not that the shorter the time it takes means the brand is better. What I want to say is that the rapid change of the times and the booming economy, as well as the continuous progress of the Internet media, make the time for brands to traverse the cycle become particularly short. We used to have 20 years to make a brand from 0-1, but now brands are caught off guard and only have one year to go from 0-1. What is one of the problems we have encountered? It's that the inflection point for emerging brands is coming faster and more rapidly than in the past. In the second year of PMPM brand, the sales broke 1 billion, so the inflection point came very fast. I used to have a theory: in the process of brand growth, the founding team brings the brand up like a snowball, and then goes on to do growth, the founding team stands on top of the bigger and bigger snowball and runs with the snowball. But I found that after the advance of the times shortened the whole life cycle, the founding team did not run on the snowball, but was chased by the snowball. We sometimes find that everything is caught off guard and the inflection point has arrived before we are ready. As PMPM entered its third year this year, we took a very serious sunken look at what we could do to move up rather than down if we were already facing the inflection point for emerging brands today. In addition, we found from the fact that PMPM broke 1 billion sales that the Chinese consumer goods market is now affirming the new Chinese brands. We are grateful that Chinese consumers are now more and more accepting of Chinese original brands and no longer believe that only foreign brands are good brands. At the same time, we also see that there will still be stereotypes of new Chinese brands in the market. For example, some people still say that domestic brands are just not as good as international brands, and some people say that if a brand has such a high growth rate in such a short period of time, it is definitely not a good brand, it is definitely a marketing brand. Others will say that if you are particularly good at telling brand stories and packaging is particularly good-looking, then you are certainly not serious about making products. We two founders started PMPM brand with the heart to be a world-renowned Chinese original brand, because we used to work in foreign companies, so we hope to create a Chinese original brand to the world. This dream is very ambitious, and we are still only through the first cycle, I hope we will not forget this vision today. "Why we started", this is not to be forgotten. We also pay attention to the history of other brands. There is a joke that "humans are repeaters by nature", history repeats itself and we find that when we look at history, we can find some lessons that we can learn from and refer to. You can look at the brands that existed, but have now disappeared, and why they disappeared, and you can look at the brands that survived, and what they did to survive through the cycle. We see several key words, such as science, innovation, insight, value, efficacy, spirit, cognition and so on. This brings us a thought, if the ultimate vision of PMPM today is to be able to become a world-renowned Chinese original brand, then we have to figure out the underlying logic of this industry, what we need to do if we can get to this end point, and what long-term value we can provide for the brand and consumers. We believe that if we want to give birth to a globally renowned Chinese original brand today, it is very important to return to the ability of scientific research and innovation and basic research. Today, as a brand that has only been in business for 3 years, how are we going to build such capacity to catch up with these big international brands with 100 years of scientific research strength, which is not enough by 3 years of strength. But there are many giants in the industry. We can invite them to join this journey and join us to create a new original brand in China together. Q&A: How does a brand create its own classic long-lasting single product when the development of new ingredients cannot keep up with the demand for new brand updates? Guo Wenci: In the research and development of new raw materials, PMPM still insists on standing on the "shoulders of giants", we have a lot of scientific research results that have not been transformed. We can also cooperate with some domestic and foreign authoritative research institutions, like PMPM is also using Ashland, the "giant", to cooperate in the development of exclusive raw materials. There are still many treasures of scientific research in this industry to be explored. Of course, I think that if we want to make a good product today, we don't necessarily need to rely on new raw materials, the ultimate value of a good product is reflected in whether consumers perceive it as a good product. All have "efficacy ingredients" in the "best ratio" of the compounding support. Therefore, it is not necessary to use new ingredients to provide consumers with good skincare solutions, the formula is the key to effectiveness.

Because when the economic slump and industry winter come over at the same time, this shrinking action facilitates hibernation. 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 Liu Chuangao, founder of Sichuan Skin Shop Enterprise Management Co. to share with us the cosmetic trends in China. CHAILEEDO: What is the rule of survival for offline cosmetic stores in the future? Liu: There are too many uncertainties in the economic environment now. Although the whole environment is not good, SKIN SHOP is living quite well this year. Because we have made some shrinking actions: Firstly, we have shut down more than 70 stores one after another, leaving nearly 200. Secondly, we have cut some positions that do not produce direct output, saving tens of millions yuan. Thirdly, we have cut off more than 10 million yuan of advertising expenses. So this year's profits are a little better than in previous years. As far as I know, many peers are also doing some shrinking action. They have closed some loss-making, ineffective stores, which is a very wise approach. Because when the economic slump and industry winter come over at the same time, this shrinking action facilitates hibernation. If we don't hibernate but struggle desperately, we may be frozen to death. But winter may also be the wolf's spring. Those who do relatively well and have sufficient cash flow have the possibility of low-cost expansion at this time. In addition to shrinking, offline cosmetic stores must also do a good job of experience and customer maintenance, and strive to build their stores into a good brand in the minds of consumers. In the future, companies that have a better grasp of the fundamental logic of business, such as brand, quality, price and service, will go farther.

The core point for innovative brands to go offline is whether they can adhere to "sincerity". 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 Pan Qifeng, the offline channel sales director of Guangzhou GRAIN RAIN Biotechnology Co., Ltd. to share with us the cosmetic trends in China. CHAILEEDO: What is the premise of the innovative brand entering offline? Pan: The core point for innovative brands to go offline is whether they can adhere to "sincerity". I think it is a prerequisite for brands to go offline if they consider offline channels as a long-term and stable business channel and are willing to share the sustainable benefits of brand growth with their offline partners. CHAILEEDO: How can innovative brands do well in the offline channel? Pan: Offline channels focus more on consumers' intuitive experience, which means that innovative brands have to spend energy on researching packaging presentation, display methods and activity forms that meet the needs of the channels. This year, GRAIN RAIN has upgraded the product packaging for offline channels, making the color block more uniform when displayed in the terminal. At the same time, we developed a set of "fairy" display and activities of Hanfu(traditional Chinese clothes) for offline terminals, so that consumers can feel the brand awareness, interaction and recognition in the terminal. Both the brand and the channel are inseparable from the support of our users, and we continue to upgrade the formula to provide users with a safer and more effective product experience. For users in different regions and channels offline, GRAIN RAIN provides a variety of series of products to meet the efficacy of different users' skin care needs. "A hundred techniques are better than one sincerity". "Sincerity" is also the core of brand values. We believe that as long as we treat our channels and users with "sincerity", the emerging brands will go steady and well offline.

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 meeting, Tian Yong, Chairman of A&H International Cosmetics, delivered a speech with the theme of "China's Color Cosmetics Trends". Good morning everyone! I am Tian Yong, the founder of A&H International Cosmetics, and I am very pleased to have this opportunity to share with you my views on the present and future of Chinese color cosmetics, as well as global cosmetics trends. When it comes to the future of color cosmetics, the eternal answer that cannot be bypassed in the world, no matter in 10, 20 or 30 years, is: clean, natural, organic, and green. Whether it is the package or the contents, the future should focus on what kind of products are friendly to the environment and the skin. Where exactly is the future of cosmetics? In fact, many years ago, several major global groups made very clear guidelines. In China, there are now also many factories acting and moving forward in this direction - pure, natural, organic and green. Whether it's color cosmetics or skin care products, they have actually entered the era of sustainability. In terms of the current state of Chinese color cosmetics. Chinese brands have had rapid development in the past few years because the country's national strength has increased, national self-confidence has also peaked, and Chinese culture will be quickly delivered overseas. However, as far as China is concerned, how many brands are there that are really large enough and can be remembered by everyone? There are not even more than 10 brands. I believe we can instantly say the name of the brand is definitely less than 10. Let's think about how many brands there are in Japan and South in Korea. People think that nowadays is a very competitive time, but in fact, it is not at all. China has a very, very large consumer base. I believe there should be more than 200 girls in the room, and among them, there may be 20 different consumer groups, which has a gtreat number of segments. But currently, there are not so many categories and brands to satisfy those segments of consumer groups. But in our factory side, there are numerous young people who are very thoughtful and have done a lot of market research, and then developed the products for their target consumer groups that they need and want. To be honest, today's Chinese market is equivalent to a microcosm of the global market, each segment of the population is actually a very large market. Have you really understood in depth what your consumer groups really want? Find the right profile of your consumer group, then you can really provide valuable products to them. When I received this invitation to talk about the trend of cosmetics in China, I think there is no trend in the current situation, because it has just started and there are too many people who are not satisfied. I can say that because there are many segments of people, but there are not so many brands or products that belong to them, and any category can be pushed back. About the future of Chinese cosmetics, I will talk about my perception. The most talked about the word this year is involution, is there? No. In fact, in any industry, including the entire country, we look back 10 or 20 years later, it is normal development. In China, why do people feel that they have to rack their brains and make comparisons? It's because you don't have the means to meet the needs of consumers anymore since consumers are becoming more and more aware of the whole field. In the next 5 or 10 years, the "involution" is the growth of consumers, forcing brands and producers to create more products to match consumer demand and bring more valuable products. So it is not an involution at all. There is also the standard of product perception. For example, if an international brand of lipstick breaks easily, you will say that you are pushing too hard, but if a Chinese brand of lipstick breaks after use, you will say that it is not good quality, is this a double standard? It can be said that Chinese consumers are the most demanding consumers in the world, especially for Chinese brands. Let's take another example, if a international brand foundation has the issue of separation, you will think it is normal. If it was a Chinese brand, would you forgive it? So, please believe in the quality of Chinese brands and their creativity. Share one more fact, when several global groups were looking for ideas and inspiration more than 10 years ago, they went to Japan. From 10 years to 3 years ago, they went to South Korea. Do you know where these major global groups go now when they are looking for ideas and inspiration? To China. That's a fact, and I want to give you a round of applause. I think there must be a place for us in the future, not only in color cosmetics, but also in skincare, and there will be many world-class cosmetic brands with conglomerates in China, and an increasing number of brands in color cosmetics will go abroad, and more and more brands will be loved by women around the world.