For Coty, the move will accelerate its goal of deleveraging. Today(July 18), Coty proposed to sell a 3.6% stake in Wella Company for $150 million. After the divestment, Coty's stake in Wella will drop to 22.3 percent, valued at $900 million. The transaction is expected to be completed within two months, and the cash proceeds from the divestment will be used to pay down debt. For Coty, the move will accelerate its goal of deleveraging. Laurent Mercier, Coty's chief financial officer, said the sale of a portion of Wella will increase the company's asset reserves. By 2025, Coty will divest all of its holdings in Wella and achieve a leverage ratio of two times by the end of 2025. Publicly available information shows that the professional hair brand Wella was founded in 1880 by German hairdresser Franz Strher and sells shampoo, conditioner and coloring products to individuals and hairdressers. In 2003, Procter & Gamble acquired 77.6% of the Wella brand for $3.4 billion. In 2015, Coty Group acquired 43 brands under P&G, including Wella, for $12.5 billion. In June 2020, private equity giant KKR acquired a controlling stake in Coty's professional beauty and hair brands business for $4.3 billion and merged the businesses, including the professional hair brands Wella, Clairol, hair tools brand ghd, and the professional nails brand OPI into the independently operated company Wella Company. KKR owns 60% of the company, while Coty Group holds the remaining 40%. (Credit: the Wella Company website) In October 2021, Coty sold approximately 9% of its shares to KKR in a deal valued at $426.5 million.

In terms of the consumer goods sector alone, the cosmetics market still shows strong market resilience and room for growth. Yesterday (July 17), the National Bureau of Statistics (NBS) released data on retail sales of consumer goods in the first half of 2023. Among them, retail sales of cosmetics amounted to 207.1 billion yuan ($28.9 billion), up 8.6% year-on-year. In terms of growth rate, the year-on-year growth rate of retail sales of cosmetics in the first half of the year was slightly higher than that of the entire consumer goods, outperforming the broader market. Meanwhile, the total retail sales of cosmetics in June this year hit a nearly 10-year high. This also shows that the cosmetics industry may overcome the "darkest hour" of last year and ushered a long overdue rebound step by step. The cosmetics sold 207.1 billion in H1 According to the latest data released by NBS, it shows that in the first half of this year, the total retail sales of consumer goods was 22.76 trillion yuan ($3.2 trillion), an increase of 8.2% year-on-year. In June, the total retail sales of consumer goods was 3.995 trillion yuan ($557.2 billion), an increase of 3.1% year-on-year. Among them, the total retail sales of cosmetics in the first half of the year amounted to 207.1 billion yuan ($28.9 billion), up 8.6% year-on-year. In June, the total retail sales of cosmetics amounted to 45.1 billion yuan ($6.3 billion), up 4.8% year-on-year. In terms of growth rate, the cosmetics category is ahead of the broader market compared to the overall retail performance in June and the first half of the year. However, from the point of view of the overall growth rate in the first half of this year, the overall growth rate in June this year is not as good as the performance of the first two months. Especially in April this year, the total retail sales of cosmetics realized a high increase of 24.3%, which is a super strong recovery after 2022 negative growth. However, since April, total cosmetics retail sales growth began to gradually slow down. Even though June was boosted by promotions such as Chinese Shopping 618 Festival, growth continued to shrink to 4.8%, only slightly higher than the January-February level this year. It's worth noting that the continuant shrinking is keeping ahead. Through total cosmetic retail sales data in the last 10 years of June, CHAILEEDO found that although the total retail sales of cosmetics in June this year hit a new high in the last 10 years, the growth rate has also hit the lowest growth rate in the last 10 years. The market performance is obviously not as good as in previous years. It is important that even in 2022, when the overall market downtrend, the total retail sales of cosmetics also achieved the highest annual growth of 8.1% in last June. Not only this year, CHAILEEDO analyzes the data in the last 10 years. The total retail sales of cosmetics have been slowing down continuously since the highest growth rate of 22.5% was recorded in June 2019 and fell off a cliff after the pandemic in 2020 and hit a 10-year low in 2022. This year, it is once again at a record low. However, compared to last year's overall negative growth, cosmetic retail sales this year still maintain the growth trend for six consecutive months but also can bring some confidence to the industry. The weakness shows in imported cosmetics and exports are rising steadily Actually, the slowdown of cosmetics retail sales is not only reflected in the Chinese market. In the first half of this year, beauty cosmetics and toiletries imported amount and number showed a downward trend. According to customs import data, in the first half of this year, the cumulative amount of imports is 66.19 billion yuan ($9.2 billion), down 8.7%. The cumulative imports are 182,213.6 tons, down 10.7% year-on-year. And in June this year, beauty cosmetics and toiletries imported 30359.7 tons, down 9% year-on-year. The import amount is 9.29 billion yuan ($1.3 billion), down 21.79%. Up to now, the customs import amount has declined for three consecutive months. The weakness of imported cosmetics is also reflected in the sales of international brands in the first half of this year. CHALEEDO data shows that the market size of foreign brands in the first half of this year amounted to 177.638 billion yuan ($24.8 billion), down 3.8% year-on-year. Among them, only the Douyin (Chinese version of TikTok) platform rose 44% year-on-year, and the rest of the platforms declined to varying degrees, such as the Alibaba-related platform declined by 14% year-on-year. Kwai declined 14.6% year-on-year. JD.com declined 18.7% year-on-year. A slight decline in sales of cosmetics store channel by 0.6% year-on-year. However, cosmetic exports have risen steadily. It is worth mentioning that in the first five months of this year, in addition to the apparently poor performance in February, the number of exports of beauty cosmetics and toiletries has maintained a certain increase. The amount of only small fluctuations. From this data, the international market may still have some room for growth. It is the right time for Chinese beauty brands to go global. Overall, compared to the epidemic before, in the first half of this year, the data in various related fields did not show a more obvious recovery and growth, which also affects the cosmetics investment and financing market to a certain extent. Through incomplete statistics, in the first half of this year, the number of Chinese domestic investment and financing in the field of beauty was only 6% of the same period last year, or even less than the second half of last year level, while the cosmetic market is in a downturn. From the breakdown of the month, only April was a positive growth trend, the rest of the months are less than the same period last year and even plunged nearly 80% in June. In addition, in terms of financing amount, there has also been a sharp decline. During the same period last year, there are 12 funding that are over 100 million yuan, including Harmay, gaining 1.4 billion financing, WOW COLOUR, gaining 680 million yuan, Winkey, gaining more than 200 million yuan, Y.O.U, gaining 280 million yuan. In the first half of this year, there are only 5 funding over 100 million yuan, including Yuanyi Biological, PAML Biotechnologies are synthetic biology enterprises. Unicon, 4inLOOK is contact lens. Only by Perfect funded the 471 million yuan acquisition of Weimeizi is a brand side. It can be seen that cosmetics investment and financing have become more rational since this year. One of the more significant changes is that the upstream enterprises and segments gain more attention, but the investment in beauty brands significantly reduced. Market recovery depends on the second half of the year In addition, according to CHAILEEDO data, in the first half of this year, the size of the beauty market was 407.2 billion yuan ($56.8 billion), an increase of 3.5% year-on-year. The online channels accounted for 44.76%, up 1.36% year-on-year. Among them, the GMV of the Alibaba-related platform in the beauty segment declined by 8.6% year-on-year. Kwai grew by 15.9% year-on-year. Douyin rose by 54.5% year-on-year. JD.com declined by 14.5% year-on-year. The sales of cosmetics store channels rose by 1% year-on-year. It can also be seen from the market scale data that the overall recovery of the cosmetics market in the first half of this year is still not obvious. Previously, a number of industry insiders told CHAILEEDO that "in the first half of this year, most companies may still be in a wait-and-see situation. The real industry recovery may have to wait until the second half of this year." And after the release of the latest total retail sales data in the cosmetics category, there are also testing organizations practitioners telling CHAILEEDO that "In the first half of this year, the enterprises launching new products is not much. At present, many companies are preparing to carry out the testing and filing. They are preparing for the next year." In addition, there are ODM/OEM business leaders expressed the same view as CHAILEEDO, many companies are currently quite conservative, "the first half of the year is still difficult for everyone. Small businesses fell quite a bit, and medium and large enterprises are basically on a downward trend." “In the second half of the offline channel should usher in a recovery." He further said, "Affected by the crackdown on new regulation, the online channel may still continue the decline in the first half of the year." The statement is not unreasonable. CHAILEEDO noted that some brands that used to focus on online, began to vigorously deploy offline channels. In the past three years, more than 20 online-based brands such Florasis, BIOHYALUX, C+ and others announced their entry into the offline. Even a number of brands have announced specific business objectives. Of course, although the overall growth of total retail sales is weak, the cosmetics market is still very promising. Particularly noteworthy is that, CHAILEEDO found that as of now there are 18 cosmetics-related companies are in the process of IPO. Some companies are in preparation of going listing. To some extent, that also reflects the industry is full of confidence in this year's beauty market. "This latest data is reassuring." The head of the above ODM/OEM enterprise told CHAILEEDO. Overall, the performance of the cosmetics market in the first half of this year was not that good, but not that bad either. And there is no doubt that the industry recovery does not necessarily mean that all companies or brands will recover. Only in the process of gradually restoring confidence in the cosmetics consumer market and maintaining the strength of their own business or brand advantages, then it is able to truly invincible in the market.

The other company, Intercos Suzhou company, was also sued, which is the filer and manufacturer of a lipstick of Fan Beauty. Recently, Fan Bingbing, Fan Beauty (Beijing) Cosmetics Trading Co., Ltd, Intercos Technology (Suzhou Industrial Park) Co. (hereinafter referred to as "Beauty Secrets"), the plaintiff is Beauty Secret (Guangdong) Cosmetics Research and Development Company Limited (hereinafter referred to as "Beauty Secret"), the case is for other civil. The case will be held in Suzhou Industrial Park People's Court in Suzhou City, Jiangsu Province, on July 25th hearing. (Credit: from China Court Trial Online) Public information shows that Fan Beauty (Beijing) Cosmetics Trading Co., Ltd. Is the operator of "Fan Beauty Secret", which was created by Chinese actress Fan Bingbing. It is understood that the official flagship store of Fan Beauty on Tmall gains 2.58 million followers and its products involved masks, lipstick, shampoo, etc. There are 15 productss sales exceeding 1000 + units. The other company, Intercos Suzhou company, was also sued. According to the National Medical Products Administration Chinese ordinary cosmetic record platform information, Intercos Suzhou company is the filer and manufacturer of "Fan Beauty Secret Silver Mirror Trail Red Carpet Lipstick # 008 girls (shade)". (Credit: from the National Medical Products Administration Chinese ordinary cosmetic record platform) According to the Trademark Office of China National Intellectual Property Administration, the plaintiff party Beauty Secret is the holder of several trademarks of "Beauty Secret", while Fan Beauty (Hainan) Cosmetics Co. Ltd. holds a number of "Fan Beauty Secret" trademarks, but some categories of trademark applications are currently "under opposition". (Credit: from the Trademark Office of China National Intellectual Property Administration) CHAILEEDO learned that the official online store of Beauty Secret on Tmall currently gains 220,000 followers and its products involved lipstick, makeup remover cream, masks, etc., of which three products have 100+ people to pay.

As the world's second-largest cosmetics market, China has seen significant developments in cosmetics ingredients this year. In the first half of this year alone, 24 cosmetic ingredients in China were registered, which will further enhance the country's competitiveness in the cosmetics market. Cited: SOPHIM IBERIA S.L Since the opening of new cosmetics ingredient registration in 2021, the threshold for ingredients research and development has been lowered, and the field of ingredients innovation, which was previously dominated by international beauty giants, has begun to see more companies entering the market. China completed 24 ingredients registrations in the first half of this year In January, three companies completed new ingredient registrations. Dong-E-E-Jiao Co., Ltd completed the donkey oil registration, Corum Inc completed the new ingredient registration of azelamidopropyl dimethyl amine, and Fuzhou Biotech Biotechnology Co., Ltd. completed the new ingredient registration of potassium dihydroavenous alkaloid D. According to the information released by the National Medical Products Administration, donkey oil is an animal ingredient, with the registration number of National Cosmetic Original Registration Number 20230001, the purpose of the ingredient use is moisturizer, applicable to various types of skin cosmetics. In terms of safe usage, the trunk area is 8%, face products are 41%, hand products are 30%, and there is no usage limit for lip products. Azelamidopropyl dimethyl amine is a chemical ingredient, with registration number National Cosmetic Original Registration Number 20230002, the purpose of the ingredient used is a skin protectant, which can be used in various types of skin cosmetics, with a safe usage of 2%. The registration number for potassium dihydroavenous alkaloid D is National Cosmetic Original Registration Number 20230003. The specific technical requirements have not been released yet. From February to April, a total of 9 new cosmetics ingredients completed the registrations. These are Hydrolyzed α-glucan polysaccharide, β-Nicotinamide Mononucleotide, hydrogenated farnesene, asivatrep, caffeoyl hexapeptide-9, acetyl hexapeptide-95 amide, mu-conotoxin CnIIIC, CARBOXYDECYL TRISILOXANE, alpha-glucan polysaccharide. In May, the first half of 2023 saw a burst of new ingredient registrations, with nine companies completing registrations. Baiyuete Biotechnology (Shanghai) Co., Ltd. and Shenzhen Readline simultaneously filed for the MESEMBRYANTHEMUM CRYSTALLINUM CALLUS EXTRACT and ACETYL CARNOSINE on May 16. While in June, three cosmetic ingredients completed the registrations, including Ethyl Methicone, Cyclopeptide-161, and Tripeptide-105. Table of the new cosmetic ingredients registration information in China for the first half of 2023 Overall, a total of 24 ingredients completed their registrations in the first half of this year. In addition to ingredient registrations, Jinan, Shandong, China announced that it will build the world's largest hyaluronic acid raw material production base. The annual sales of hyaluronic acid exceed 300 tons, accounting for more than 40% of the global market share and more than 70% of the national market share. According to Wei Bin, Deputy Secretary of the Party Group of Jinan Municipal Bureau of Industry and Information Technology and Deputy Director, in 2022, the sales revenue of Jinan's hyaluronic acid industry exceeded RMB 8 billion ($1.13 billion). Cosmetics and health products based on hyaluronic acid have become well-known and influential brands in Jinan. After the full completion of the World Hyaluronic Acid Valley project, it is expected to introduce more than 500 upstream and downstream enterprises of the medical beauty anti-aging industry chain centered on hyaluronic acid. The industry scale is expected to exceed RMB 50 billion, with an annual tax income exceeding RMB 5 billion ($705.69 million), creating no less than 20,000 jobs, and forming an international medical beauty anti-aging cluster integrating production, life, and ecology. The EU restricts the use of ingredients such as retinol and alpha-arbutin Apart from the Chinese cosmetic ingredients market, the European Union recently announced its plan to revise the European Cosmetics Regulation (EC) 1223/2009, proposing restrictions and prohibitions on the use of several popular cosmetic ingredients, which has caused great concern within the industry. According to the revisions, the EU plans to ban the sunscreen agent 4-Methylbenzylidene camphor (4-MBC), and list dye wood ketone, soybean glycoside, kojic acid, retinol, retinyl acetate, retinyl palmitate, α-arbutin, and arbutin as restricted ingredients in cosmetics. In addition, the usage requirements for triclocarban and triclosan have been revised. Retinol and its derivatives are popular ingredients widely used in anti-aging products. However, retinol has a substantial irritant effect and can lead to skin intolerance when used in high concentrations or on sensitive skin. The EU's Scientific Committee on Consumer Safety (SCCS) has conducted several safety assessments on retinol and its derivatives and limited its use after this regulation revision. In October of last year, the SCCS published a safety assessment opinion on Vitamin A (retinol, retinyl acetate, retinyl palmitate). According to this opinion, body lotions with a concentration equivalent to 0.05% retinol, or other types of cosmetics with a concentration equivalent to 0.3% retinol, are safe to use. The SCCS pointed out that when the concentration of Vitamin A in cosmetics exceeds certain levels, it may pose potential risks to human health. Therefore, the SCCS recommended setting maximum usage concentrations for retinol, retinyl acetate, and retinyl palmitate, and reminded consumers to pay attention to the exposure of Vitamin A in cosmetics, avoiding exceeding the daily maximum intake. The revised regulation also includes the popular whitening ingredient arbutin in the list of restricted ingredients. Arbutin is a whitening agent that can inhibit tyrosinase activity, preventing the formation of melanin, and has whitening and depigmentation effects. In February this year, the SCCS published the final opinion on the safety of α-arbutin and arbutin in cosmetics, considering α-arbutin and arbutin as safe for use. The SCCS proposed the maximum usage concentrations for arbutin, suggesting a maximum safe usage concentration of 2% in face creams and 0.5% in body lotions, while the maximum safe concentration for arbutin in face creams is 7%. The SCCS stated that the total exposure of α-arbutin and arbutin in products within the above concentration ranges is safe. However, in formulas containing α-arbutin and arbutin, the content of phenol should be as low as possible, and should not exceed the inevitable residual amount in both types of arbutin. Therefore, in this revision, the SCCS included α-arbutin and arbutin in the list of restricted cosmetic ingredients. With regard to another whitening ingredient, kojic acid, the SCCS also adopted restrictive management measures. Kojic acid has a whitening effect and can remove spots, but it also has certain irritant and allergenic properties. In March of last year, the SCCS published a safety assessment opinion on kojic acid and believed that the maximum usage concentration of this ingredient in cosmetics should be 1%. Dye wood ketone and soybean glycoside are two antioxidant ingredients, and the SCCS has also proposed corresponding management requirements for them. Dye wood ketone has anti-aging and anti-inflammatory effects, while soybean glycoside has antioxidant and anti-inflammatory effects. In September of last year, the SCCS published the final opinion on dye wood ketone and soybean glycoside. Based on the safety assessment of related data and considering the potential endocrine-disrupting properties of phytoestrogens, the SCCS believes that the maximum usage concentration of dye wood ketone in cosmetics is 0.007%, and the maximum usage concentration for soybean glycoside is 0.02%. According to these safety assessment results, dye wood ketone and soybean glycoside will be restricted. For the restricted use of triclocarban and triclosan, the SCCS mainly adjusted regulatory requirements. In November of last year, the SCCS conducted a safety assessment of triclocarban and triclosan, verifying the safety issues of these two ingredients, and clarifying their respective target users and maximum usage concentrations. Among them, triclocarban, as a preservative, has a maximum concentration of 0.2% in cosmetics, while the maximum usage concentration for triclosan is 0.3%. In addition, for the proposed banned ingredient 4-Methylbenzylidene camphor (4-MBC), due to insufficient information provided to comprehensively assess its potential genotoxicity, the SCCS was unable to conclude on the safety of 4-MBC. Therefore, to ensure consumer safety, the EU decided to ban this ingredient in cosmetics. Finally, it's worth noting that regulatory changes like these can also create opportunities for innovation. As certain ingredients become restricted or banned, there's a need for new, safe, and effective alternatives. This can drive the development of new cosmetic ingredients and formulations, potentially leading to better products for consumers. DSM-Firmenich: the largest merger in the cosmetic ingredients sector this year In the capital market of cosmetic ingredients this year, the merger of DSM and Firmenich has attracted the most attention. In May, the merger between DSM, a health and nutrition company based in the Netherlands, and Firmenich, a fragrance and flavor company based in Switzerland, has been completed, resulting in the creation of DSM-Firmenich. Firmenich, which specializes in perfumes, flavors, and ingredients, is now a wholly-owned subsidiary of DSM-Firmenich. DSM, with a history of over 150 years, has become a leading player in health, nutrition, and biotechnology on a global scale. The newly created DSM-Firmenich is divided into four high-performing business units: Perfumery & Beauty, Taste, Texture & Health, Health, Nutrition & Care, and Animal Nutrition & Health. These segments are built upon complementary, top-notch scientific research and exceptional manufacturing abilities. DSM reported sales revenue of €8.39 billion ($ 9.43 billion) in the fiscal year of 2022, while Firmenich generated CHF 4.723 billion ($5.49 billion) in revenue during the same period. Together, the two companies had annual sales of $14.92 billion, which positions the newly formed DSM-Firmenich as a potential leader in the fragrance and flavor industry and the biggest merger in the cosmetic ingredients sector this year. The development of the domestic ingredients’ capital market is also thriving. Zhejiang Peptites Biotech Co., Ltd. (referred to as ZPC), on June 28, submitted its prospectus to the Shenzhen Stock Exchange, intending to become listed on the ChiNext market. According to the prospectus, ZPC is currently the largest supplier of cosmetic peptide ingredients in China, having partnered with renowned cosmetics firms such as Proya, Bloomage Biotech, and Marubi. In 2022, the company generated a revenue of 213 million yuan ($29.39 million) and a net profit of 70 million yuan ($9.66 million). ZPC is anticipated to become the first publicly listed peptide company in China. ZPC's peptide products are primarily utilized in the cosmetics ingredients and pharmaceutical industries. In 2021, ZPC held the top position in China's peptide cosmetics ingredients market share. Presently, ZPC has created over 40 beauty peptide products, which include snake venom-like peptides, blue copper peptides, and red scorpion venom. The red scorpion venom is a self-developed revolutionary beauty peptide product and the first domestically produced structural beauty peptide. Based on financial data, ZPC's revenue for the years 2020, 2021, and 2022 were 86.17 million yuan ($11.89 million), 143 million yuan ($19.73 million), and 215 million yuan ($29.67 million), respectively. Its net profit for the same periods was 12.40 million yuan ($1.71 million), 38.52 million yuan ($5.32 million), and 71.69 million yuan ($9.89 million), respectively. In terms of growth, the company's revenue increased by 50.17% in 2022, and its net profit rose by 86.11% year-on-year. As per Frost & Sullivan's findings, the Chinese peptide cosmetics ingredients market has increased from 630 million yuan ($86.93 million) in 2016 to 1.45 billion yuan ($200.09 million) in 2021, with a compound annual growth rate of 18.2%. It is predicted to reach 2.32 billion yuan ($320.14 million) by 2025 and 3.24 billion yuan ($447.094 million) by 2030. At the same time, China's largest pearl pigment supplier, Global New Material International Holdings Limited, is reportedly in talks to acquire the pigment division of German chemical giant Merck. The valuation of Merck's pigment division in this transaction is estimated to be close to €1 billion. If the acquisition is completed, it may become the largest acquisition in the domestic cosmetic ingredients industry and further enhance Global New Material International Holdings Limited's ranking in the international pearl pigment market. In late June, Brenntag, a global leader in the distribution of chemicals and ingredients, announced the acquisition of Shanghai Saifu Chemical Development Co., Ltd. (referred to as Saifu), which is expected to bolster Brenntag's position in China. Brenntag has declared that its acquisition of Saifu in China is in line with its acquisition strategy as a major consolidator in the industry and its goal of positioning Brenntag Specialties as the preferred global service partner for innovative and sustainable solutions. Saifu is a leading distributor of specialty chemicals to various industries, including home and personal care, coatings and inks, polymer emulsions, household, and industrial cleaning, and more. Established in 2005, the company generated an annual revenue of €71 million ($78.02 million) in 2022. The transaction is expected to be completed later this year, subject to standard closing conditions. Saifu is headquartered in Shanghai, with two subsidiary companies in Guangzhou and Beijing. The company also has a Technical Application Center with two laboratories dedicated to providing technical support. With a team of over 100 employees possessing strong chemistry backgrounds and experience, the Saifu group can deliver quality service. Since the implementation of regulations related to the registration and registration of new cosmetic ingredients in 2021, 68 new cosmetic ingredients have been registered, with 48 being domestically produced. In the first half of 2023, 24 new ingredients were registered, with 18 being developed by domestic companies. Domestic companies have made significant progress in the research and development of cosmetic ingredients. At the same time, in the capital market, domestic enterprises are continuously expanding their influence in the Chinese cosmetic ingredients market through mergers and acquisitions, and IPOs.

Searching on Xiaohongshu platform with the keyword Digital Human yields over 100 related accounts, with many virtual humans gaining popularity and collaborating more and more with beauty brands. Today (July 14th), Shiseido announced through its official account on Chinese sharing platform Xiaohongshu account that it has invited four virtual digital humans to endorse its product Shiseido Ultimune Power Infusing Concentrate. (Credit: from Shiseido official account) It is understood that Digital Human/Meta Human are digitally created human-like characters using digital technology. Shiseido's Digital Human include "Fashion Blogger" AYAYI, "Virtual Idol" Noah, "AI Artist & Fashion Designer" MUSE, and "AI Artist & Technology Development Officer" ALPHA. These four digital humans are owned by Shanghai Ranmai Network Technology Co., Ltd. (referred to as "Ranmai Technology"). Public information shows that Ranmai Technology was established in October 2020 and is a meta-universe content IP and digital asset operation management company. Starting with the hyper-realistic digital human AYAYI, it has gradually formed a more complete digital human IP matrix, and has developed and operated several hyper-realistic digital humans including AYAYI, Noah, Ruo Yi Ro1yi, and Ayo. Since its establishment, Ranmai Technology has received multiple rounds of financing. On June 25th, 2021, Ranmai Technology received angel round financing of several million RMB. On January 21st, 2022, it received Pre-A round financing of tens of millions of RMB. On December 15th, 2022, it received A round financing of tens of millions of US dollars. It is worth noting that among the above-mentioned digital humans, AYAYI has collaborated with beauty brands before. In 2021, AYAYI became the ambassador for L'Oreal's color renewal campaign, and in 2022, it collaborated with MAC and Nature Republic to promote brand products. (Credit: from Xiaohongshu) Searching on Xiaohongshu platform with the keyword Digital Human yields over 100 related accounts, with many virtual humans gaining popularity and collaborating more and more with beauty brands. For example, ALiCE, the virtual human with the most followers, shares daily life on the Xiaohongshu platform as a "fashion blogger" and has promoted products such as Sulwhasoo's Ginseng Lotion and L'Oreal Age Perfect Nectar Royal. Currently, ALiCE has more than 30,000 followers and has received 72,000 likes.

It is reported that Yatsen (YSG) was made transformation since 2022. The skincare segment is now the focus of YSG strategic transformation. It has become the second growth curve of the company's development. On July 16, Qichacha.com news, Shanghai Yatsen Cosmetics Co. (hereinafter as YSG Shanghai) is in the process of a simple deregistration announcement. (Credit: from Qichacha.com) It is shown that the company was founded on January 14, 2021, with a registered capital of RMB 100 million, and its business scope includes cosmetic production, import and export of goods, import and export of technology, and so on. The shareholding chart shows that the company was previously jointly held by Shanghai Zhenchen Cosmetics Co. (Shanghai Zhenchen) and Guangzhou Yatsen Holding Limited (YSG). (Credit: from Qichacha.com) Public information shows that YSG was founded in 2016. In 2017, YSG launched its first beauty brand - Perfect Diary. In November 2020,YSG went listing to the U.S., becoming the first Chinese beauty enterprise in the U.S. stock. Shanghai Zhenchen, a joint venture with YSG, was founded in 2015 and is a professional OEM and ODM manufacturer specializing in the research and development of formulas for lipstick, powder, eye shadow, mascara and other types of makeup, as well as the development of packaging materials and production and processing. It is said that Jenchen is the invisible boss of the local color cosmetics OEM. It is reported that Shanghai Zhenchen is the main OEM/ODM of Perfect Diary. In the first few years of Perfect Diary's found, its sales were overwhelming. It is reported that during Chinese Double 11 Shopping Festival in 2019, Perfect Diary become the first Chinese beauty brands that ranked on the list of cosmetics category on Tmall. During the Chinese Double 11 Shopping Festival in 2020, its cumulative sales reaching 600 million yuan ranked top in the list of cosmetics categories successively. During Chinese 618 Shopping Festival in 2021, Perfect Diary became the Top 1 cosmetics on JD.com and Vipshop and Top 2 Chinese beauty brands on Tmall and others. However, during the Chinese 618 Shopping Festival this year, Perfect Diary was not on the list of Top 20 brands of cosmetics on Tmall. This may be related to the new five-year strategic transformation plan. In April 2022, its founder, chairman and CEO David Huang announced the new five-year strategic transformation plan, saying that it will stand at the starting point of the new five years. The team will continue executing our new five-year strategic plan with a focus on building a healthy brand portfolio and capitalizing on rising opportunities as the consumer industry recovers. Today, its skincare segment is the focus of the strategic transformation of YSG and has become the second growth curve of the company's development. In the first quarter of this year's financial report, YSG skincare segment achieved revenue of 245 million yuan ($34.2 million), up 34.2% year-on-year. It remained at the level of more than 30% of total revenue for four consecutive quarters. Among them, the three major brands of high-end skincare brand Galenic, efficacy skincare brand DR.WU, and luxury skincare brand EVE LOM combined revenue in the first quarter increased by 59% year-on-year. At the same time, YSG cosmetics segment continued to contract. In 2022, the annual total revenue fell 36.5% year-on-year to 3.71 billion yuan ($517.2 million), net profit continued the loss trend, net loss of 815 million yuan ($113.6 million) of attributable net loss, the cumulative net loss in the past three years reached 5.044 billion yuan ($703.2 million). In this regard, YSG annual report disclosed that the main reason for the decline in revenue was the decline in net revenue from the color cosmetics brand, which was partially offset by the increase in net revenue from the skin care brand. As of December 31, 2022, the Company operated a total of 158 Perfect Diary offline stores, closing 128 stores compared to the end of 2021. In the first quarter of 2023, the cosmetics net revenue of YSG declined 29.1% year-on-year to $508 million. David Huang said it will continue to develop its skincare brand in 2023. Yang Donghao, CFO of Yixian E-commerce, believes that the cosmetics industry has lower profit margins compared to the skincare industry, and expects that the company's skincare brand will contribute at least more than 50% of its revenue. And YSG Shanghai and Shanghai Zhenchen spent 100 million yuan ($14 million) to set up the ODM/OEM of Perfect Diary is now facing a write-off, which may also be a further step in the group's transformation.

It is reported that Shanghai Jahwa is expected to increase its net profit for the first half of the year by 81% to 100% year-on-year. Yesterday (July 14), Shanghai Jahwa Union Co., Ltd (hereinafter referred to as: Shanghai Jahwa) released 2023 half-year performance forecast announcement. The announcement shows that Shanghai Jahwa expects the first half of the net profit of 285 million yuan ($40 million) to 315 million yuan ($44 million), an increase of 81% to 100%. Moreover, Shanghai Jahwa also expects to achieve net profit attributable to owners of the parent company after extraordinary gains and losses of 249 million yuan ($34.86 million) to 275 million yuan ($38.5 million) in the half-year of 2023, compared with the same period of the previous year, will increase 47.91 million yuan ($6.7 million) to 74.08 million yuan ($10.4 million), an increase of 24% to 37% year-on-year Shanghai Jahwa said in the announcement, the company since the second quarter, increase brand investment, drive high gross profit skin care category revenue growth, structural enhancement of the gross profit margin, while maintaining the sales expense rate, management expense rate of steady decline, the first half of the domestic business net profit of non-deductible year-on-year growth of about 80%; the company's overseas business is under pressure, net profit of the overseas business in the second quarter fell by about 25%. Shanghai Jahwa is one of the national enterprises with a long history in China's beauty and daily chemical industry, listed on the Shanghai Stock Exchange in 2001. It is the first listed enterprise in the industry in China. It focuses on three major areas of beauty, personal care and household cleanliness, mother and child, with brands such as Herborist, Dr. Yu, Giving and other cosmetic brands.

Regarding the rise in performance, Qingdao Kingking explained that the main reason for the change in performance was the gradual recovery of the company's various businesses in the first half of 2023. On July 13th, Qingdao Kingking Applied Chemistry Co., Ltd. (hereinafter referred to as Qingdao Kingking) released its performance forecast for the first half of 2023. According to the announcement, the net profit attributable to shareholders of the listed company in the first half of 2023 is expected to be between 28.72 million yuan ($4 million) and 33.14 million yuan ($4.6 million), a year-on-year increase of 30% to 50%. The net profit after deducting non-recurring gains and losses is expected to be between 23.4 million yuan ($3.3 million) and 28 million yuan ($4 million), a year-on-year increase of 0% to 20%. Qingdao Kingking explained that the main reason for the performance change was the gradual recovery of the company's various businesses in the first half of 2023. Qingdao Kingking's main business includes three major sectors: new material candle and aroma and craft products business, cosmetics business, and supply chain business. Among them, the new material candle and aroma and craft products business and cosmetics business are the core business development sectors. In 2022, Qingdao Kingking's new material candle and aroma and craft products business had a revenue of 1.05 billion yuan ($147.3 million), accounting for 35.57% of the total revenue. The cosmetics business had a revenue of 900 million yuan ($126.3 million), accounting for 30.51% of the total revenue, and the supply chain business had a revenue of 1 billion yuan ($140.3 million), accounting for 33.92% of the total revenue.

Johnson & Johnson subsidiary LTL believes that some or all of the patients involved in the study had been exposed to asbestos products from other sources. Johnson & Johnson has reportedly sued four researchers who published studies on talc products and cancer that point to a link between talc-based personal care products and cancer, escalating its attack on the company's claims of inaccurate scientific research. The company last week filed a lawsuit in federal court in New Jersey to force three researchers to "retract and/or issue corrections" to a study that said the use of contaminated talcum powder products can sometimes lead to mesothelioma in patients, a finding that has led to damage to the products' reputations and allegations of fraud on Johnson & Johnson's part. Johnson & Johnson subsidiary LTL sued, Emory and Maddox, pathologists affiliated with Peninsula Pathology Associates in Newport News, Virginia, and Kradin, a pulmonologist who worked at Massachusetts General Hospital Cancer Center before his retirement, and Jacqueline Moline, another doctor who has implemented research on cancer patients who use talcum powder. Moline reportedly published an article in 2019 that studied 33 patients who said their only exposure to asbestos came from talcum powder products, after which Emory, Kradin and Maddox conducted a follow-up study of 75 similar patients in 2020. The LTL complaint alleges that all four doctors provided expert testimony in the lawsuit against Johnson & Johnson, and their studies were cited in the lawsuit in which they did not testify. However, the researchers concealed the fact that some or all of the patients involved in the study had been exposed to asbestos from other sources. The company also asked the court to compel the researchers to disclose the identities of the patients. Johnson & Johnson is reportedly facing more than 38,000 lawsuits alleging that the company's talcum powder products, including baby powder, were contaminated with asbestos and caused cancers such as ovarian cancer and mesothelioma. To handle such cases, in October 2021, Johnson & Johnson formed a subsidiary, LTL, and announced that the company had filed for Chapter 11 bankruptcy protection. At this point, LTL was up to $10 billion in debt, according to documents filed by LTL in this regard. Over the past 10 years, Johnson & Johnson has faced more than 38,000 talc-related lawsuits involving damages totaling more than $2.2 billion. In April this year, Johnson & Johnson said it plans to pay $8.9 billion in compensation over the next 25 years, which also hit "the highest amount of compensation in the history of global beauty". And for this bloodletting, Johnson & Johnson is also intended to completely solve the matter of bankruptcy protection.

The multiple range of Hermès products, including jewelry, ready-to-wear, perfume and beauty products, are available in this store. Today (July 13), the official website of Hermes announced that the first boutique in Tianjin, China will open on July 14 to expand its business in China. It is reported that this is the 28th Hermès boutique in China, located on the first floor of MixC mall in Tianjin City. The style of the store highlights Hermès' commitment to the Chinese mainland and its long history with the region. Hermès said the opening of the Tianjin store marks a new chapter for Hermès in China and invites loyal customers and new visitors to discover the creativity and craftsmanship of Hermès through its artisanal products. The store will sell the full range of Hermès products, including jewelry, ready-to-wear, fragrances, and beauty products. CHAILEEDO called Hermès China customer service. It said that the full range of Hermès Beauty is currently sold in all offline stores in China. Currently, Hermès Beauty has flagship stores on China's mainstream e-commerce platforms such as Tmall and JD. According to CHAILEEDO data, in the list of Tmall perfume fragrance category Top20 brands in June, Hermes Perfume ranked fourth with its GMV reaching 17.658 million yuan ($2.5 million). According to Hermes' latest financial report, Hermes' revenue from the perfume and beauty business was 126 million euros ($140.7 million) in Q1 of 2023, an increase of 6.8% at constant exchange rates.

Shiseido says that keeping the stratum corneum soft is an important step in improving wrinkles. Today (July 13), Shiseido announced the new function of "Pure Retinol". Shiseido found that "Pure Retinol" can inhibit the progression of wrinkles from the surface to the deeper layers of the skin by softening the stratum corneum. According to official information, Shiseido discovered through its uniquely developed "internal and external skin elasticity 3D imaging system" that when the skin moves in response to facial expressions, etc., the hardening of the stratum corneum increases the mechanical stresses exerted on the dermis, resulting in the development of a "gap between the two skin layers (stratum corneum and dermis)", which is the root cause of wrinkles. This means that keeping the stratum corneum soft is an important step in improving the appearance of wrinkles. The study also found that "Pure Retinol" is an active ingredients with confirmed efficacy and effect on wrinkle improvement. It has a softening effect on the stratum corneum. In that case, Shiseido has discovered a new function for this ingredient, which is to prevent wrinkles from progressing from the surface to the deeper layers of the skin. According to Shiseido, after more than 30 years of research on retinol, Shiseido has also developed a unique technology, "Shiseido Retinol TripleLock Technology," to produce pure retinol-formulated products in a stabilized manner, realizing the effect of "pure retinol" to skin with absolute certainty. Part of the results of this research were presented at The 31st International Federation of Societies of Cosmetic Chemists (IFSCC)*5 Congress 2020 Yokohama (Oct. 21-30, 2020),” and also, at the 48th Convention of the Japanese Cosmetic Science Society (Jun. 23, 2023).

According to Statista, as of 2021, the global clean beauty market was valued at approximately $6.5 billion. It is expected to grow to around $15.3 billion by 2028, with a compound annual growth rate of 13.1% from 2022 to 2028. Cited: Mibelle Group As clean beauty continues to gain attention, more and more international beauty giants such as Shiseido, Unilever, and P&G are beginning to enter the clean beauty market. China is at the forefront of clean beauty standards Clean beauty is a concept in the cosmetics industry that originated in Europe and America. The concept of Clean beauty can be traced back to the year 2000 when it was developed in response to the special skincare needs of a pregnant woman. A brand called REN (meaning "clean" in Swedish) was born, and its products were effective while eliminating harmful ingredients. REN is recognized as the pioneer of "Clean Beauty". In September 2008, American actress Gwyneth Paltrow further proposed the pioneering concept of clean beauty in her founded beauty brand, Goop. For a while, the concept of clean beauty remained obscure until LVMH's cosmetics retail giant Sephora and American e-commerce platforms began to set up "Clean Beauty Zones" on their websites. With continuous promotion on social media and careful packaging by marketing-savvy beauty brands, it quickly became a global beauty trend. At the same time, starting in 2019, Sephora gradually established its clean standards, focusing on the transparency of formulation and raw material procurement. Its official website lists the prohibited ingredients and updates them in real-time based on the latest industry research. Special labels are also added to products that meet its clean standards. Before the emergence of the clean beauty concept, organic and vegan skincare philosophies were equated with sustainable beauty for a long time. However, in reality, Clean Beauty does not replace these other concepts; rather, it has overlaps and differences with them as they continue to develop. It should be noted that although the concept of clean beauty has been around for more than 10 years, there is no standard and universally recognized definition both domestically and internationally. Even Goop, which was one of the first to propose the concept, states on its official website that Clean Beauty is a largely unregulated term, created by consumers and companies who want to choose in response to the limited regulation of the beauty industry. From the claims of some mainstream international clean beauty brands, it can be seen that the widely recognized standards for clean beauty in the industry mainly include three aspects: pure ingredients, meaning no toxic or harmful components to the human body; transparent labeling, meaning clear, comprehensive, and complete ingredient labels; and being environmentally friendly, meaning no animal testing and eco-friendliness. However, it is worth noting that although there is no specific authoritative official definition of clean beauty both domestically and internationally, China has already taken the first step. On July 10, 2022, the Guangdong Cosmetics Association issued the group standard Cosmetics - Clean Beauty General Principle which was officially implemented on August 8, 2022. The Guangdong Cosmetics Association stated that this standard defines clean beauty from the perspective of ensuring openness, transparency, traceability, responsibility for human health and safety, environmental friendliness, animal welfare, social responsibility, and humanitarianism throughout the product life cycle. The aim is to promote the continuous improvement of cosmetics quality by standardizing the claims of Clean Beauty. The clean beauty market is expected to reach $15.3 billion by 2028 According to Statista, the clean beauty market was worth approximately $6.5 billion in 2021. The market value is expected to increase and reach around 15.3 billion U.S. dollars by 2028, with a compound annual growth rate of 13.1% from 2022 to 2028. Companies globally focusing on clean beauty include L’Oréal, Estee Lauder, e.l.f. Beauty, Avon, Sephora, Beautycounter, Orveon, and Unilever. ELF has been ranked as one of the best among the top-five mass beauty brands by the Environmental Working Group (EWG), with the lowest percentage of products falling into the high-hazard category. The brand has also been recognized by Green, Clean, Responsible (GCR) beauty rankings for its use of 100% clean ingredients and efforts to meet the Clean 2.0 standards. In contrast, over half of the product category for other brands like Maybelline and Cover Girl uses clean ingredients. According to data from Research and Markets, the Asia-Pacific region held the largest market share for clean beauty in 2022 and is expected to be the fastest-growing region in the coming years. On April 11th this year, the 3rd China International Consumer Products Expo released its first import consumption trend. Tmall International joined forces with Farmacy, Drunk Elephant, REN, Trilogy, and nearly 100 clean beauty brands from around the world to make their debut in this region, launching trendsetting new products. This indicates a year-on-year increase of 236% in clean beauty sales in China in 2022. Yu Huanhuan, head of Tmall International Market, introduced at the press conference that in 2021, Tmall International first introduced "clean beauty" to Chinese consumers as a platform. In the first half of 2021, the number of clean beauty brands grew by 106% year-on-year. From 2021 to the present, nearly 200 overseas brands focusing on clean beauty have entered the Chinese market through Tmall International, launching thousands of new clean beauty products, including brands from the United States, France, Germany, the United Kingdom, Japan, and other countries. The increased demand for natural beauty products, a more cautious and conscious understanding of skin health, and the introduction of more sophisticated and clean beauty products to enhance skin health are the main factors driving global market growth. Consumers are more actively checking ingredient labels, which often involves a preference for more harmless ingredients commonly found in daily life, rather than those mixed in laboratories. In addition, consumers are more interested in making their skin a flawless makeup foundation rather than covering up imperfections. As a result, an increasing number of consumers are becoming aware of their skin health and investing in eco-friendly and non-toxic cosmetics. Beauty giants are all scrambling to enter the clean beauty market As clean beauty continues to gain attention, more and more international beauty giants are beginning to enter the clean beauty market. In October 2019, Shiseido announced its acquisition of the clean beauty brand Drunk Elephant for $850 million, which was completed in November of the same year. The acquisition will help Shiseido enter the rapidly growing new field of clean beauty in the beauty market. It is rumored that Estee Lauder and Shiseido were the last two competitors in this acquisition, but Shiseido ultimately emerged as the winner. Drunk Elephant was launched by Tiffany Masterson in August 2013. The clean beauty brand is known for creating clean compatible categories and is loved for its powerful, effective, and biocompatible formulas. Drunk Elephant only uses ingredients that are directly beneficial to skin health or that support the integrity and effectiveness of the formulation. Drunk Elephant's streamlined products do not contain six suspicious ingredients (essential oils, drying alcohols, chemical sunscreens, SLS, silicones, and fragrances/dyes) and offer solution-oriented skincare for all skin types. In April 2022, Shiseido launched Ulé, its first clean beauty brand developed in Europe, in Paris. During the earnings conference for FY2021, Masahiko Uotani, the president and CEO of Shiseido, announced that Ulé will be added to the company's lineup of clean and sustainable beauty products, alongside brands such as Drunk Elephant and Baum. Ulé aims to promote conscious, botanical beauty and is unique in being the first skincare brand to cultivate its ingredients in an indoor high-tech vertical farm. Located near Paris, the Ulé Eco-Farm guarantees the purity of the brand's ingredients and keeps the supply chain as short as possible. Unilever has also entered the clean beauty space through acquisitions. As early as 2015, Unilever acquired the British clean beauty brand REN. Founded in London in 2000, REN has become a pioneer in the clean beauty movement. The brand's philosophy revolves around using natural, sustainable, and effective ingredients to create products that promote healthy and radiant skin. REN emphasizes its commitment to producing clean, non-toxic formulas that are free from potentially harmful chemicals. REN avoids commonly used synthetic ingredients such as parabens, sulfates, mineral oils, synthetic fragrances, and artificial colors. Instead, they focus on utilizing bioactive compounds, plant extracts, and essential oils to provide significant results without compromising the health of the skin. In 2019, Unilever also acquired the Japanese luxury skincare brand Tatcha, which features natural ingredients and advanced technology in its formulations. Founded in 2009, Tatcha's skincare products are a blend of long-standing Japanese ingredients and modern techniques. The brand emphasizes the use of natural ingredients such as green tea, rice bran, camellia oil, and silk extracts. In addition to Shiseido and Unilever, Procter & Gamble also entered the clean beauty market in 2021 through the acquisition of Farmacy Beauty. Farmacy Beauty was founded by Mark Veeder in 2015 and is dedicated to creating effective and innovative skincare products using natural and sustainable ingredients. The brand draws inspiration from the healing powers of plants and features ingredients such as echinacea, honey, and chamomile. Farmacy Beauty is committed to sustainable practices, using eco-friendly packaging and supporting regenerative agriculture through partnerships with the Bee Better Certification program. The brand has gained widespread attention for its high-quality, cruelty-free, and clean beauty products. As sustainable development continues to be a core goal for beauty brands, trends such as refilling and reusing, as well as soluble or zero-waste beauty, are becoming increasingly popular worldwide. As the clean beauty industry continues to evolve, future innovation is expected to go beyond just using clean ingredients. Furthermore, due to the large consumer base, the global clean beauty market is expected to continue to grow in the future.