The number of new ingredients for special cosmetic products under the registration system will not increase significantly in the short term. As one of the world's leading suppliers of cosmetic ingredients, Symrise has been committed to the R&D, production, and application of various ingredients. For example, SymWhite® 377, one of its core products, has been favored by international famous brands such as Dr.Ci:Labo, L'Oreal, and La Roche-Posay in the field of whitening. CHAILEEDO invited Lao Shuquan, the director of Symrise's cosmetic ingredients department in China, to talk about the future trends of cosmetics in China. In his opinion, it is difficult to speak of a major trend in the short term, and the pace of industry renewal and iteration will become slower. From the raw material side, the number of new ingredients for general cosmetics will increase under the filing system. But with the introduction of new regulations (CSAR), the number of new ingredients for special cosmetics under the registration system will not increase significantly in the short term. He has also said that in such a context, creating a best-selling product mindset is not relevant to the current dynamics. It will take time for the whole industry to digest and absorb the new regulatory changes for quite some time. There is no such thing as a breakout point in the short term for efficacy cosmetics, and it will be characterized by lukewarmness. Meanwhile, the whole industry and brands are gradually tamping down the groundwork for the development and launch of efficacy cosmetics, which also takes time. In the longer term, this will be more favorable to the growth of brands and companies with strength. Since the new regulations have been fully implemented, the year 2022 is both the first year of regulation change and efficacy. In the face of regulatory changes, Lao Shuquan believes that cosmetic companies should do the following three things. First, to calm down with requirements that are higher than the regulations, and steadily strengthen the management foundation of quality and safety control and so on. Second, change the state of emphasizing marketing over R&D, reflecting the essence and advantages of R&D. Third, integrate the supply chain and make full use of excellent supply chain resources. Previously, he mentioned to CHAILEEDO that after the implementation of new regulations, the development cycle has become longer and the development cost has increased. This makes each brand need to pay attention to each product brought to the market, not to put the trial and error cost in the market as much as possible, but to do a good job in the enterprise to fully justify the research work. This also makes the past kind of marketing mind through the Internet medium to obtain traffic and will be changed. Furthermore, for the hot section of efficacy cosmetics in recent years, Lao Shuquan believes that the key to breakthrough is for companies to come up with products that really work. "Combine efficacy for problematic skin solutions, be realistic to be effective, and enter the special certificate category to focus on innovation of new efficacy and explore the possibilities." Therefore, to meet the requirements of the regulations, cosmetic companies should develop products to improve the actual efficacy quality of their products to ensure that every product listed stands up to the test of consumers. This, in turn, is the basic starting point for the development of efficacy products today. On September 22, the 5th Conference on China’s Cosmetics Trends will be held in Hangzhou, China. CHAILEEDO will be live streaming the entire event, register now to book a live stream: https://www.chaileedo.com/events.

On September 14, Proya officially announced Wei Xiaolan as its Chief Scientific Officer, who has nearly 20 years of experience in R&D in the global cosmetics field. According to official information, Wei Xiaolan graduated from the College of Chemistry Molecular Engineering, Perking University, and holds an MBA from New York University: Leonard N. Stern School of Business and a Ph.D. in chemistry from the University of Pennsylvania. In 2018, Wei Xiaolan was the Vice President of Coty Research & Development Asia, which is a world-renowned fragrance and cosmetics giant group. During this time, she helped Coty build a complete local R&D center and an organizational closure of front-end product insights, formulation design, packaging engineering, process, efficacy testing, toxicology, and regulatory departments. Currently, Wei is expanding in multiple areas of cosmetic ingredients, chemical materials, formulation development, and fragrance design, and has published more than 10 papers in globally renowned academic journals and more than 20 patent studies covering compound synthesis, polymer materials, formulation, and efficacy ingredients. Proya said that Wei’s joint will inject more international vision into Proya's research career, and is an important step for Proya to continue to build a global R&D team and move into internationalization. Talent is one of the core assets of a company, and in the past few years, Proya has paid particular attention to the cultivation of R&D talents, thus establishing the image of an R&D-oriented company. According to Proya's interim financial report in 2022 that was previously announced, the amount of Proya's R&D expenses increased by 29.7 million yuan ($4,262,800) in the first half of the year, and the R&D expense ratio was 4.69%, compared to 3.76% in the same period last year. During the reporting period, it was granted 12 new state-licensed invention patents and submitted 17 new invention patent applications, and 4 new appearance patent applications. By the end of the reporting period, it had 104 state-authorized invention patents. In addition, Proya has also established strategic cooperation with BASF, DSM, Ashland, Evonik, and other internationally renowned raw material companies to further empower product development. Not only setting up a perfect and high-quality R&D organization structure but also having a strong R&D team. According to Proya's 2021 annual report, the company has 159 R&D staff, accounting for 5.59% of the total number of employees, including 141 with bachelor's degrees or above. Last year, Proya added the International Scientific Research Institute based on the R&D Innovation Center. At the same time, it is committed to the development of its own patented raw materials, striving to achieve a higher stage from exclusive supply to global originality in the raw material end. It is understood that in the next step, the brand will still put talent, R&D, large single product, and multi-brand in a vital position.

Forest Cabin's omnichannel performance during the Chinese 618 Shopping Festival broke 100 million yuan this year, an increase of 34.5% year-on-year. In addition, the performance in Tiktok China soared a 1000% increase in the same period last year. Forest Cabin is a Chinese brand using traditional Chinese herbs as ingredients, targeting young users in the mid-to-high-end market and its Camellia oil has become a top-selling product. In November 2020, Forest Cabin got hundreds of millions of yuan in Series A financing. Less than 10 months later it completed Series B financing with a more than threefold increase in valuation. CHAILEEDO invited Sun Laichun, founder of Forest Cabin, to talk about the future trends of Chinese cosmetics. In his opinion, the share of local brands in China will continue to go up next year, but the overall industry growth rate will slow down. Sun Laichun is very bullish on skincare essences and fragrances. He believes that essence is the largest skincare category and is a necessity for consumer upgrade, while the fragrance is a must-have product for stress relief and high quality of life. This year, Forest Cabin will launch a limited version of "Haute Perfume". It is known that Forest Cabin's omnichannel performance during the Chinese 618 Shopping Festival broke 100 million yuan this year, an increase of 34.5% year-on-year. Moreover, its performance in Tiktok China soared a 1000% increase in the same period last year. Forest Cabin Camellia oil ranked TOP 1 in the Tiktok China e-commerce best-selling essence oil list, and TOP3 in best-selling facial essence oil list on Tmall, which is the only single product of more than 500 yuan(about $71.9) within the list. Despite the great performance of the online channel, Sun Laichun expressed his concern. He said that sale of Tmall stabilized and that of Tiktok China began to make money, but the cash-burning model will not be able to maintain. Tmall has a strong perception of brand power and is the first choice for shopping, especially for cosmetics. Tiktok China has traffic, but for most of the brands in the past two years, the performance of the profit is worrying. This situation can not last need to refine the operation and maintain with profits. In the face of increasingly expensive traffic, he believes that although innovative brands are the hope of China's national cosmetics, they cannot form a strong brand with stickiness just by casting traffic to operate. Once the online rules change, it will be exceptionally difficult. Offline channels have stability and are easy to form strong brand power by service. In 2021, Forest Cabin open online and offline channels. It takes online as the traffic entrance and it offers services and experience to undertake the traffic in offline channels. Through the private domain operations and CRM management to activate fans, it formed a sales closed loop of "OMO model" . It is reported that Forest Cabin previously announced that it will open the offline arrangement of the affiliate model in 2022 in order to further expand the stores. Sun Laichun also said in the online streaming that the essence of the private domain is a tool to improve the efficiency of the service. He believes that developing in the long term also needs strong brand power, so the brand bonus is a long-term bonus. Retail brand + direct marketing (associates) is the business model to ensure brand power, and this model will be the future trend of Chinese high-end brands. On September 22, the 5th Conference on China’s Cosmetics Trends will be held in Hangzhou, China. CHAILEEDO will be live streaming the entire event, register now to book a live stream: https://www.chaileedo.com/events.

On August 11, the NMPA (National Medical Products Administration) solicited the public for comments on the "Cosmetic Inspection Agency Accreditation Conditions (Draft for Comments)" (hereinafter referred to as "Accreditation Conditions"), the personnel's education, length of practice and supporting hardware and other aspects of the extremely high requirements.

The manufacture and sale of counterfeit goods have been banned repeatedly, and the Qingpu Branch of Shanghai Public Security Bureau seized more than 2 million trademarks such as "Love Life", "Head & Shoulders" and "Pantene".

In China, cosmetic manufacturers are required to establish and implement a traceability management system to ensure that all activities such as material procurement, product production, quality control, storage, sales, and recall are traceable.

May 1, Beijing time, is an important turning point in the implementation of supporting regulations such as the Regulations on the Supervision and Administration of Cosmetics. China's cosmetics industry has officially entered a more stringent regulatory era, the registered cosmetics label must comply with the provisions and requirements of the Cosmetics Label Management Measures and children's cosmetics should also be marked with the "xiaojindun" (Little Golden Shield) logo on the surface of sales packaging.

National Medical Products Administration: Cosmetic Ingredients Safety Information Registration Platform in China is officially launched at 9 am December 31, 2021. Cosmetic raw material manufacturers or their authorized enterprises can log on the platform to report information related to the safety of raw materials.

On September 13, Lancy received a letter of concern from the Shenzhen Stock Exchange and was asked to explain its 158 million yuan acquisition of a 75% stake in Kunming Hanjin Medical Beauty Hospital Co. Public information shows that Lancy has three major sections: women's apparel, medical aesthetic services, and baby business, and it entered the medical aesthetic services business in 2016. Through a series of mergers and acquisitions, as of June 30, 2022, it had 29 medical beauty institutions, including 5 general hospitals and 24 outpatient clinics or clinics. They are mainly located in Chengdu, Xi'an, Chongqing, Shenzhen, Changsha, Baoji, Xianyang, etc. Currently, it has three major medical aesthetic brands in operation, namely "Bravo", "Jingfu Medical Cosmetology", and "Gao Sheng Sheng". The company is currently operating three domestic medical aesthetic brands: "Milan Parkview", "Crystal Skin Medical Beauty" and "Gonice". Moreover, its baby business includes, except baby daily wear, Putto, a baby washing&care brand, which is divided into a secret series for 0-3-year olds, a forest series for 3-6-year olds, and a family wash series for baby families. In the first half of 2022, Lancy's overall operating revenue of 1.809 billion yuan ($260 million), which was affected by the women's apparel and baby business sections, with a year-on-year growth of only 1.10%. However, the medical aesthetics business segment achieved operating revenue of 629 million yuan ($90 million), an increase of 18.45% over the same period of the previous year. On September 10, Lancy released the Announcement on Cash Acquisition of Controlling Interest in Kunming Hanjin and Related Transactions, stating that its wholly-owned subsidiary, Beijing Lancy Medical Management Co., Ltd. intends to acquire 75% of the equity interest in Kunming Hanjin held by a related party, Wuhu Bochen No.5 Equity Investment Limited Partnership, for a transfer price of 158.1 million yuan ($22.7028 million) in cash. The Shenzhen Stock Exchange requested Lancy to further explain the reasons, necessity, and reasonableness of further funding for the transfer of the controlling interest in Kunming Hanjin from a related party, Bochen No. 5, after acquiring 65% and 10% of the equity interests in Kunming Hanjin in June 2021. According to the previous announcement, Kunming Hanjin's net profit for 2021 and the first half of 2022 was -18.66 million yuan (-$2,679,500) and 6.95 million yuan ($998,000) respectively. The Shenzhen Stock Exchange requested Lancy to explain whether the profitability is stable and sustainable regarding Kunming Hanjin's operating data in the past 3 years, in addition, analyze whether its gross profit margin and net profit are at a reasonable level and illustrate the reasonableness and possibility of performance commitment. In fact, in December last year, Lancy announced that it had received a letter of regulatory concern, which required it to explain the details of the development of the medical aesthetic business, business growth rate, profit model, main products, core competitiveness, as well as the operating income and share of the first three quarters of 2020.

Lip mud has been rapidly in a craze among Chinese market in the past two years while internationally renowned beauty brands are still waiting for market feedback. Lipstick (lip makeup) has been a segmentation category with strong market demand. According to data from Guoyuan Securities, the size of lipstick accounted for 28.05% of the whole colored cosmetic market in 2019, 10% higher than the second-ranked foundation category. It enjoyed a year-on-year growth rate of 36.61%. Such a large market has also led to fierce competition in the lipstick market with innovative brands not taking advantage of traditional lip makeup. Lip Mud Pioneer INTO YOU is on Trend CHAILEEDO observed that in lip makeup category which was seen as “red sea” in the Chinese cosmetic market, a dark horse has emerged--- Chinese makeup brand INTO YOU. INTO YOU was founded in 2019 and it become popular thanks to the brand independently creating the new category lip mud. The brand's lip mud products were recommended by a large number of key opinion leaders and common customers as soon as they were launched. It also made INTO YOU a hit brand. INTO YOU Shero Super Matte Lip&Cheek Mud is its best-selling product which was priced at 59 yuan(about $8.5) with a monthly sales of 100,000+ units. Official data shows that the total sales of INTO YOU has exceeded 410 million(about $58.9 million) in 2021. In April 2020, the word "lip mud" first appeared on the Internet due to INTO YOU launching its first lip mud called INTO YOU Shero Super Matte Lip&Cheek Mud, according to data from “Yong Hu Shuo”. On the Chinese sharing platform Xiaohongshu, there are 240,000+ notes about "lip mud" reviews and promotions and 50,000+ related products. On Chinese social media platforms such as Weibo and TikTok China, consumers' searches for lip mud products are also not low. According to the official published data, INTO YOU completed a 30 million yuan(about $4.3 million) angel round of financing in 2021. On the day of June 16, 2021, INTO YOU flagship store on one of the Chinese e-commerce platforms Tmall ranked 5th in the Tmall lip glaze category sales. And in the first quarter of 2022 on the platforms under Alibaba, INTO YOU sales reached 190 million yuan(about $27.3 million) with 3.87 million units sold and a 220.9% increase in GMV year-on-year. In the Chinese 618 Shopping Festival in 2022, the brand's sales were $7.274 million, up 287.4% year-on-year. INTO YOU, as the pioneer of lip mud, has captured the segmented demand of the vertical category. Its rapid spreading shows the development of this lip mud sector indirectly. Competition amid lip makeup brands is extremely fierce and lip mud products should not be underestimated According to the big data insight of Beauty Data Ai, in the first half of 2022, lip makeup occupies 26.01% of the overall makeup market and the market size of 5.36 billion yuan(about $770 million) makes lip makeup become a makeup category second only to the facial base makeup market. Specifically, lip makeup brand competition is extremely fierce in the Chinese market and the aggregation effect is obvious among head beauty brand. From the perspective of this category, international brands almost monopolize the head market of lipstick, while Chinese brands excel in sub-categories such as lip glaze and lip mud. Lipstick is also one of the categories with the most obvious brand effect. According to sales data in March 2021 on Chinese e-commerce platforms Taobao and Tmall, the top five lipstick brands in terms of sales are Givenchy, Dior, MAC, YSL and Armani, all of which are international first-line big brands. (Credit: China Lip Makeup Industry Development Status Analysis and Investment Prospect Research Report) Lipstick is generally a solid cream form. Compared to lip gloss/lipstick glaze, the texture of the lipstick is dry and hard. Its main features include high color saturation and strong color coverage to modify the lip shape and lip color. As an innovative texture of lip makeup products, lip mud is between solid lipstick and fluid lip glaze in the form of semi-solid mud. Although the texture of lip mud is drier compared to lip glaze, lip clay can present a better matte effect than lip glaze after lip application. At present, this subdivision of the product found a new "blue sea" in a mature "red sea" lip makeup market. Even if the lip mud products have been launched in two years, their market development potential is still not to be underestimated. According to the big data of Beauty Data Ai, the market sales of innovative texture concept lip mud is as high as 780 million yuan(about $112 million), accounting for 27.01% of sales in addition to conventional products such as lip glaze, lip gloss and others. Sales in the first half of 2022 increased by 43.91% year-on-year. From July 24 to August 24 (China Standard Time), sales of lip mud were up to 68.06% YoY on TikTok China. In 2020, the year in which lip mud was launched, its sales reached 230 million yuan(about $33 million) on Chinese e-commerce platforms Taobao and Tmall, an increase of 3,141% year-over-year. The cumulative sales of lip mud pioneer INTO YOU's hot-selling lip mud single product for the whole year 2020 have exceeded 57 million yuan(about $8.2 million). At a time when the beauty investment and financing market is cold, INTO YOU has completed a 30 million yuan(about $4.3 million) financing. (Credit: China Lip Makeup Industry Development Status Analysis and Investment Prospect Research Report) From the above data and phenomena, it is easy to see that as an emerging category, lip mud is rising and it may become a blue sea market pioneered in the red sea industry. At present, there are fewer players in the lip mud market with Chinese brands such as Judydoll, INTO YOU, UKISS, etc., and the unit price is concentrated in 30-110 yuan(about $4.3-$15.8). Among the Top 10 sales of lip mud, INTO YOU lip mud is in a leading position which accounted for a relatively high proportion of 30%. It is worth noting that there are almost no other major international brands that launched lip mud products in addition to 3CE. After INTO YOU became popular, new Chinese innovative brands, as well as international niche brands, also followed the trend to launch the lip mud category. At present, in the lip mud sector, in addition to the above-mentioned Chinese makeup brand INTO YOU, it also includes the Chinese makeup brand VNK, Chinese makeup brand Hyntoor, Thai makeup brand ZENN.TH, Korean makeup brand Unny, Korean makeup brand Barbera, etc. These brands are located in the mass market makeup and unit price of these products is basically not more than 100 yuan(about $14.4). Among them, Hyntoor lip mud is priced at 49.9 yuan(about $7.2) per unit. INTO YOU, ZENN.TH, Unny and Barbera's lip mud are priced at 59 yuan(about $8.5) per unit. VNK lip mud is priced at 69 yuan(about $10) per unit. Compared with international brands such as Givenchy, Dior and MAC, they all are priced from 200 yuan(about $28.7) for lipstick. Chinese brands seem to be cost-effective. A cosmetic industry insider has stated to Chinese media platform Jiemian that there are big makeup brands that have noticed the trend of lip mud and are keeping a watchful eye on the trend. These brands have not launched lip mud for the time being. It is mainly due to the consideration of maintaining brand reputation and image. Because the production technology of lip mud at the moment still needs to be improved, the product effect is not stable enough. As a new species of lip makeup, lip mud can really attract the attention and followers of young groups in a short period. However, lip mud and matte lipstick are duplicated in terms of efficacy. Whether its moisturization can surpass that of matte lipstick varies from brand to brand. Although INTO YOU has achieved bright results after the launch of lip mud, some customers have said in the product reviews of INTO YOU that the lip mud would pull dry after a few hours of applying it to the lips. Therefore, it remains to be seen whether lip mud can develop into a segmented category alongside lipstick and lip glaze.

Beauty products can play a role in bridging the gap between skin and emotions. Ashland Group, one of the top 500 companies in the world for personal care ingredients, recently released its third-quarter financial report. According to CHAILEEDO combined with the second-quarter financial report, Ashland had total revenue of $1.248 billion in the first half of 2022. Among them, the second quarter revenue was $604 million, up 1% year-on-year. CHAILEEDO invited Zhao Lianming, general manager of Ashland Personal Care Asia Pacific, to talk about the future trends of cosmetics in China. In his opinion, beauty products can play a role in bridging the gap between skin and emotions. On the one hand, the active ingredients contained in the products can improve skin condition. On the other hand, the product's unique fragrance, color, texture, application experience, auditory experience, and other sensory innovations can bring emotional satisfaction to consumers, which in turn acts on skin health. Therefore, he believes that the market concept of emotional cosmetology will become increasingly popular next year, and will become a trend in the future. In response to this trend, Ashland has currently developed 5 efficacy ingredients for vision, taste, perception, smell, and touch of skin, including Cocoa 3C Screen Care Factor BlumilightTM, Marsdenia Condurango Drainage Factor SerenityTM, Emotional Enhancement Factor CB2skinTM, Sandalwood Essence SantalwoodTM, and Jasminum Grandiflorum Essence CaressenseTM. In 2022, the cosmetic industry will officially enter the era of "no efficacy, no skincare", and efficacy cosmetics will usher in the best development period. For the efficacy skincare section, Zhao believes that the next breakthrough point lies in the need for both science and sensibility in products. In one aspect, technology and scientific endorsement will play an increasingly important role, and in the other aspect, beauty products will increasingly advocate aesthetic diversity at the emotional level. As a result, efficacy beauty products with both science and sensibility will be favored by the market in the future. In developing the 5 functional ingredients, Ashland also uses front-edge biology, artificial intelligence, and other technologies to explain the close correlation between emotions and senses, or to find the key link targets or link pathways between the central nervous system and the brain's command center. It is worth noting that the Cosmetics Supervision and Administration Regulations and supporting regulations are relevant to the survival of every cosmetic company. In the face of regulatory changes, he believes that cosmetic companies need to respond with rigorous scientific evidence. According to Zhao, emotional cosmetology is not simply about solving single skin problems such as pigmentation and sensitivity, but also about emotional and spiritual enhancement. Under strict regulations, companies need rigorous scientific evidence and scientific communication with consumers. And this requires the joint efforts of brands, raw material manufacturers, and consumers. On September 22, the 5th Conference on China’s Cosmetics Trends will be held in Hangzhou, China. CHAILEEDO will be live streaming the entire event, register now to book a live stream: https://www.chaileedo.com/events.

Pan Qiusheng, Chairman and CEO of Shanghai Jahwa, talks about cosmetic trends in China. According to public information from the National Bureau of Statistics, in the first half of 2022, total retail sales of consumer goods amounted to 21,043.2 billion yuan ($3016.298 billion), a decline of 0.7% year-on-year. Among them, the retail sales of cosmetics reached 190.5 billion yuan ($27.306 billion), decreasing by 2.5% year-on-year, which is the first time in the past 10 years that the total Chinese retail sales of cosmetics fell in the first half of the year. CHAILEEDO invited Pan Qiusheng, the Chairman and CEO of Shanghai Jahwa, to talk about the future trends of cosmetics in China. From his point of view, the impact of the pandemic may be short-term, but the decline in overall economic growth and changes in consumer confidence derived from the pandemic will be the biggest variables affecting the cosmetics industry next year. He revealed the following two possible trends in the cosmetics industry next year. First, with the improvement of overall consumer quality and knowledge, as well as the new cosmetic regulations taking root, the Chinese cosmetic industry is likely to gradually shift from traffic benefits to the word-of-mouth effects. Meanwhile, the approach of relying on money to appeal to new customers will gradually migrate and balance with the approach of depending on quality for repurchases. At this point, the company's technology R&D and innovation capabilities will contribute to the sustainable development of the product. Furthermore, the category development growth rate may change significantly due to the economic environment, requiring companies to observe and adjust strategies promptly. For instant, if the economy goes up, consumption will continue to upgrade, and the category will show high-end, which is beneficial to skincare and beauty in general, especially for medium and high-end brands and similar essence and other categories of consumer upgrading. However, if the economy goes down, the personal care category will accelerate growth due to inelastic demand, and there may be a phenomenon of accelerated growth of big brand duplicates in the skincare category. In addition to these trends, Pan Qiusheng is optimistic about the future development of soothing, repairing, and anti-aging products, the baby product category, and aroma and fragrance area. He said that the market share of soothing, repairing, and anti-aging products, baby product category will continue to grow due to the rising proportion of sensitive skin, as well as macro factors such as aging and increased concern for the safety of baby products. It is worth noting that the Fragrance Product Insight Report 2022 released by CHAILEEDO shows that the Chinese perfume market size is expected to reach 16.9 billion yuan ($2.422 billion) in 2022, and by 2025, its retail sales are projected to 30 billion yuan ($4.3 billion), which is expected to become the second largest market in the world. The fragrance has also become a new category for Shanghai Jahwa to focus on. For example, recently, Shanghai Jahwa completed its investment in local fragrance brand Timingbox. Finally, about the future of the beauty channel, Pan Qiusheng believes that the private domain of new retail opened will become the next new field for beauty companies competing to arrange. On September 22, the 5th Conference on China’s Cosmetics Trends will be held in Hangzhou, China. CHAILEEDO will be live streaming the entire event, register now to book a live stream: https://www.chaileedo.com/events.