Abstract: Korean cosmetics ODM COSMAX grows 3.56% year-on-year in H1, down 6.6% in China. Recently, Korean cosmetic ODM COSMAX released its financial results for the first half of 2022. According to the financial report, COSMAX achieved revenue of $642 million in the first half of the year, up 3.56% year on year. Its operating profit was $248 million and its net profit was $12.4 million. According to the earnings report, the Korean domestic market remains COSMAX's top market. In the first half of 2022, its revenue in Korea was $380 million, accounting for 59.08% of its total revenue, up 9.03% year-on-year from $348.1 million last year. The Chinese market is the largest and strongest market in COSMAX global layout. According to the report, COSMAX China market revenue in the first half of this year was $241.3 million, accounting for 37.57% of COSMAX's total revenue, down slightly by 6.6% from $258 million in the first half of last year. COSMAX revenue in China declined in the first half of this year, mainly due to the supply chain's inability to operate normally due to the epidemic lockdown in Shanghai earlier this year. According to the financial report of second quarter 2022, COSMAX also mentioned that the prolonged supply chain disruption and restriction in China affected results in China and Korea, resulting in negative sales growth compared to the same period last year. Founded in 1992, COSMAX has subsidiaries and factories around the world, including Korea, Shanghai and Guangzhou, China, Jakarta, Indonesia, and Ohio, USA. It serves major global cosmetics groups such as L'Oreal, Amore Pacific, and LG, involving more than 300 brands. As of today, COSMAX has more than 3 factories in Shanghai and Guangzhou, China. In October 2021, COSMAX’s Shanghai factory reportedly produced 53,661,338 units in a single month, exceeding 50 million units for the first time. Together with the Guangzhou factory, the monthly production has reached nearly 70 million units, setting a record for the highest monthly production of COSMAX Group. Another international cosmetic ODM/OEM manufacturer, Intercos, also released its first-half financial results a few days ago. The company's revenue was about 376 million, up 17% year-on-year. Its adjusted net profit was about $21.2 million, up 54.4% year-on-year. It is worth mentioning that, compared with other large beauty groups, Intercos' market share in China is still not large. But emerging Western brands are just starting to enter China, which means that Intercos is expected to grow in China and will continue to expand in China and Asia in the future. At the same time, Intercos also said that the supply chain crisis has lasted longer than expected, the economic recession and other unfavorable factors may also affect the company's earnings growth. This coincides with the supply chain disruption mentioned in COSMAX's earnings report. In response to the deep global supply chain crisis, Intercos said that the diversification of supply sources due to its global operations and the growth of raw material inventories in 1H22 led to an increase in the Group's production viability in the second half of the year compared to 1H of 2022. Various international ingredients giants in the daily chemical industry have also recently indicated supply chain issues in their earnings reports. Frank Clyburn, CEO of International Flavors and Fragrances (IFF), said in IFF's second quarter 2022 earnings report that IFF has now raised prices on its products in response to inflation and market pressures due to rising global raw material, logistics, and energy prices. Thus, ingredients and supply chains have become a common problem for upstream and downstream cosmetic companies. COSMAX, as an upstream cosmetics company, will probably respond to this dilemma by diversifying its supply sources and raising prices in the future.

Abstract: Abstract: In the first half of this year, sales revenue of cosmetics-related businesses of 12 companies reached totaled $76.6 billion, an increase slightly year-on-year, with growth momentum coming from high-end brands that have kicked off a competition war in the Chinese market. Recently, international beauty groups have been releasing their latest financial reports. CHAILEEDO Compiled these financial data among 12 international beauty companies such as L'Oreal, P&G, Unilever, Johnson & Johnson, Shiseido, and so on from January to June this year. According to statistics, the sales revenue of cosmetics-related businesses of these 12 international beauty groups in the first half year totaled approximately 76.596 billion, a slight increase of 0.6 percentage points compared to the same period last year. Among these 12 companies, 7 reached year-over-year sales growth, with LVMH, L'Oreal, and Beiersdorf all posting double-digit growth. The other 5 companies’ sales revenue declined, with Natura & Co, LG Household & Health Care, and Amore Pacific all posting sales decline of more than 10% in the first half. CHAILEEDO observed that high-end makeup and fragrances performed outstandingly in the first half year. For example, L'Oreal's premium cosmetics division achieved sales revenue of about $6.964 billion, up 16.4% year-on-year, which has benefited from high-end brands such as Lancome, Helena, and YSL beauty. In the fragrance area, LVMH's fragrance and skincare segment saw 20% growth, and that was the fastest growth rate among the 12 companies. According to the financial report, a number of fragrances under LVMH such as Dior JAdore and Givenchy Linterdit have maintained great growth. Overall, although 7 companies achieved growth, the rate was less than that in the past. For instant, L'Oreal's sales increased by 20.7% in the first half of 2021, compared to 13.5% this year. Similarly, both Shiseido and Amore Pacific turned their year-on-year figures from growth to decline. A very vital reason is the impact brought about by the Chinese market. In their financial reports, almost all of the 12 companies mentioned the significant influences of the pandemic on their Asian market or their group's overall business performance in areas such as Shanghai. Furthermore, CHAILEEDO found that many companies presented an increase in revenue without growth in profit, for example, Kao's operating profit fall 37.64% year on year. A number of companies predict that this uncertainty will continue for a period of time. And almost all of them have taken measures to increase prices and reduce costs in order to lower cost pressure and achieve their full-year growth targets. Among them, the Kao Group has decided to continue its strategic price increase program, including planning for promotional costs, direct price increases, value-added improvements, and cost compression. The group expects price increases in overseas regions to bring about $29 million in the second half of this year and about $52 million in Japan. The financial report of Unilever also showed that the price increases measure that group implemented in the home care segment and other business segments in the first half of the year, and the increased range in the second quarter amounted to 11.2%. In addition, the competition war in the Chinese market led by international giants has started. For instance, L'Oreal is about to introduce Parda beauty into China, and Aveda, a high-end Washing & Care brand under Estee Lauder, has opened its first store in China. Meanwhile, the beauty giants are also accelerating their localization strategies, channels, marketing and technology are getting closer to the Chinese market. This is evident from the fact that the beauty giants are increasing their investment in live streaming and are stationed in duty-free stores in Hainan. China is a vital potential market, and international beauty groups are still full of confidence and ambition. At the same time, based on the forecast of the future global market, the organizational structure, brand portfolio, supply chain, and other aspects are constantly adjusting and optimizing in order to fight the next battle.

Abstract: LVMH's high-end fragrance brand Maison Francis Kurkdjian officially entered the Chinese market with its first store at Deji Plaza on August 18, 2022(China Standard Time). Founded by Francis Kurkdjian and Marc Chaya in Paris in 2009, Maison Francis Kurkdjian is a contemporary high-end fragrance brand with over 700 stores in more than 50 countries and regions around the world. It was acquired by LVMH in 2017. This time, Maison Francis Kurkdjian enters the mainland China market and will bring its fragrance products including three series: fragrance series, home fragrance series and travel portable set with 17 fragrances and 8 scented candles. Online whereabouts at the same time, Maison Francis Kurkdjian also stationed in the e-commerce channel and it opened the official flagship store on Chinese e-commerce platform Tmall. It is worth noting that as it is a fact that known to us the Chinese perfume market has a broad prospect. According to the 2021 China Perfume Industry Research White Paper, China's fragrance market size is expected to exceed $2.5 billion in 2022 and is expected to exceed $4.4 billion by 2026. Among them, high-end perfume has become the main driver of market growth in China. The market share of high-end fragrances is increasing year by year from 70% in 2015 to 91% in 2020, while high-end unisex fragrances are the segment with the highest compound annual growth rate. CHAILEEDO found that in the recent financial reports of major groups, the contribution made by perfume to the group was mentioned. Hermes' first-half 2022 financial results showed strong growth across the board with resilient growth in the Asia-Pacific market despite the impact of the China epidemic. In particular, revenue in the perfume and beauty category rose 25% to $1.59 billion. The fragrance business also brought strong growth to Estée Lauder. Estee Lauder reported in the first quarter of fiscal year 2022 during which group revenue rose 23% year-on-year to $4.39 billion and net profit jumped nearly 30%. Among them, the fragrance division saw the strongest increase, reaching nearly 50%. In LVMH's latest half-year earnings report, the overall revenue soared, far exceeding expectations. The various segments also grew in varying degrees over the same period with perfume and beauty sections up 20% compared to the same period last year. LVMH mentioned in its earnings report that the perfume and cosmetics business group has shown good momentum. Taking the Chinese market as an example, Maison Margiela's performance recovered following the slowdown caused by pandemic-related restrictions at the beginning of the second quarter. The Dior Sauvage series remained the world's best-selling fragrance in that half-year earnings report and the Miss Dior line also achieved better results. Therefore, multiple Group's positive perfume business coupled with the vast Chinese perfume market, international brands have been waiting for the opportunity to move. The 2021 China Perfume Industry Research White Paper jointly released by Eternal Group and Kantar shows that in the past three years, four international cosmetic groups, namely L'Oreal, Shiseido, Estee Lauder and PUIG Puig, have introduced at least nine perfume brands into the Chinese market including Serge Lutens, a perfume brand of Shiseido, and two major salon brands of Puig perfume brands Penhaligon's and L'Artisan Parfumeu. In 2020, Estee Lauder Group introduced KILIAN, Frederic Malle. In 2021, L'Oreal Group's Valentino beauty with a full line of fragrance makeup products landed in the Chinese market. In July this year, L'Oréal Group also brought PRADA perfume debut in the second China International Consumer Products Expo. According to Eternal data, in the second quarter of 2022, the Top 10 perfume on whole Alibaba system, Hermes, Mason Margiela to maintain high growth and Mason Margiela performance is the most bright with year-on-year growth rate of 87%. L'Artisan Parfumeur, Ralph Lauren drove high growth with distribution on Alibaba platform and official flagship store on Tmall. International niche brands such as Byredo, Penhaligons and Diptyque also performed better in their official flagship stores on the Tmall platform. Chinese perfume brands are not far behind with a buzz of new Chinese fragrance brands such as Scent Library, To Summer, Young Beast, Scentooze, etc. They are at an emerging and developing speed in recent years. According to "Fragrance aromatherapy - store sales ranking on Tmall" during the Chinese 618 Shopping Festival this year shows that the Chinese brand Beast topped the list. According to Euromonitor International's data, the top 10 fragrance market shares in China in the past three years are all international brands. However, the market share of a single brand does not exceed 10%. The market share of Top 10 brands is about 42%. This means that although most of the Chinese perfume market share is ruled by international brands, there is still room for Chinese perfume brands to grasp the opportunity. Jiemian Fashion has reported that there have been many Chinese perfume fragrance brands gaining attention and reaping financing in recent years. According to Cantar's measurement of the volume of perfume brands in the Chinese market online, although the highest online volume in recent years is still the international brands, the Chinese brand Scent Library ranked in the top 10 for the first time in 2021. Driven by "self-pleasing consumption" and fragrance economy, fragrance has become the dark horse of beauty industry growth in recent years. In the major brands to increase the pocket and high-end perfume brands accurate reach of the middle class consumer demand, it is expected that the perfume category will continue to maintain a high degree of attention.

Abstract: Pientzehuang, a long-established skincare brand in China, released a performance snapshot. The company achieved operating revenue of 4.423 billion yuan in the first half of 2022, up 14.91% year-on-year. According to the observation from CHAILEEDO, Pientzehuang subsidiary Pientzehuang Cosmetics is a Chinese high-tech enterprise integrating research and development, production, and sales, positioning "Chinese skincare with health industry". The company covers skincare, wash, and care products with products focusing on core efficacy such as spot removal, whitening, and anti-wrinkle. Among international brands, there are multiple products with spot removal and whitening efficacy, such as OLAY Advanced Light-Perfecting Essence under P&G, Dr. CI:LABO Super White 377 VC Serum, SK-II Genoptics Aura Essence, Lancome Intense Whitening Spot Eraser, and other products from international brands are also recognized by the market in China. For this financial report of Pientzehuang, specifically, the operating profit of Pientzehuang in the first half year is $237 million, up 18.73% year-on-year. The net profit attributable to shareholders of the listed company is $195 million, up 17.83% year-on-year. According to the announcement, the growth of the company's revenue is mainly due to the strengthening of market planning and expansion of sales channels and the increase of sales revenue of the company and its holding subsidiary Xiamen Pientzehuang Hongren Pharmaceutical Company Limited (consolidated). The company's operating profit and net profit attributable to shareholders of the listed company both achieved double-digit growth, mainly because of the increase in sales of the company's core product Pientzehuang series products. At present, Pientzehuang has not announced the detailed operation data yet, according to its 2022 first quarter performance report, its revenue from the cosmetics and daily chemical industry in the first quarter was $28.1 million, down 13.2% year-on-year, accounting for 8.09% of total revenue. The cost of business was $8.7 million, down 28.69% year-on-year and the gross profit margin was 69.09%, up 6.71% year-on-year. In the Chinese aesthetic concept of "white is beautiful", "white" has always been a necessary element of beauty. Therefore, in the Chinese beauty market, how to "whiten" has been the topic inescapable. In terms of market size, the whitening market has also been growing in an upward trend. According to the data such as Bevol.cn, the market scale of the whitening industry was $40 billion in 2013, and the market scale of the whitening industry grew to $65.7 billion in 2018. The market scale of whitening spot removal reached $74.2 billion in 2021. Queen brand under Pientzehuang Cosmetic Company started in 1980. As a firm inheritor of oriental beauty and skin care culture, the herbal skincare brand Queen started in 1980 and inherited the herbal beauty way since its birth. It is devoted to exploring the connotation of oriental beauty, and successively bred classic and star products such as Pientzehuang Queen Pearl Cream, Pientzehuang Queen Nutriv Ultimate Pearl Cream and Whitening and Spot Removal Cream. Among them, the classic pearl cream has been sold in Hong Kong, Macao, Taiwan in China, and as well as worldwide in Japan, Korea, and Southeast Asia since it was born in the 1980s. It is known as a "beauty boutique" and has become a generation of Chinese classics with its excellent quality and outstanding skin care effect. In 2013, on the basis of continuing the efficacy of classic pearl cream, the brand launched Pientzehuang Queen Nutriv Ultimate Pearl Cream, which won the "2020 Meiyi Award TOP-skin care category facial cream award", "High Popularity Cream Award" and "High Popularity Cream Award" of Ruili Fashion & Beauty Magazine Beauty Model. It is understood that the revenue of Pientzehuang 2021 in the cosmetic/daily chemical industry is $124.6 million, down 7.05% year on year. The gross margin is 67.01%, up 6.49 percentage points. In 2020, the total revenue of Pientzehuang cosmetics reached $90.5 million, up 42% year on year. From 2017 to 2020, the total revenue is from $30 million to $90.5 million with a compound annual growth rate of 42.3% in three years. It can be seen that the gross profit margin of Pientzehuang cosmetics still keeps growing despite the epidemic raging in recent years and the difficulties of entity retail. It not only reflects the recognition of Pientzehuang cosmetics by the Chinese and international public but also verifies the sustainability of its strategic development goal of "leading brand of big health national cosmetics".

Abstract: Chinese leading hyaluronic acid company Bloomage Biotech released its financial report in the first half of 2022, with revenue of USD 434 million, up by 51.62% year on year. High growth is sustained in its functional skincare products business as the sector enters the second era of cosmetics regulations, with technology R&D-type enterprises promising to grow from strength to strength. On the evening of July 20, Bloomage Biotech released performance bulletin of the first half in 2022.In the first half, Bloomage Biotech's revenue reached USD 434 million, up by 51.62% year on year. The net profit attributable to the owner of the parent company was USD 69 million, up by 30.49% year on year. The net profit attributable to the owner of the parent company before non-recurring profits and losses was USD 60 million, up by 34.04% year on year. Total assets at the end of the year in the report amounted to USD 1.157 billion, an increase of 4.56% compared with the beginning of the period. In the first half of 2022, Bloomage Biotech continued to steadily advance the "four-wheels-driven" business layout, resulting in its operating revenue achieving a relatively rapid growth. The sales revenue of functional skincare products increased by over 75% year on year, leading to a rapid growth in the company's total revenue. As for raw materials business, the company enjoys robust core barrier and higher market share, hence maintaining a stable growth over the long haul. Its four major brands have made impressive results, and since 2018, Bloomage Biotech has been expanding its reach to aesthetic medicine, pioneering in functional skincare products across China. At present, the company has formed four brand matrices featured by BIOHYALUX, QUADHA), Bio-MESO, MEDREPAIR. These four brands have survived the initial growth period, forming their own uniqueness with a increasingly solid consumer base. In June, Quadha, with a four-year-long establishment, follows suit by joining the 10-bn-level Chinese brands, following the BIOHYALUS'x sales reaching USD 181 million at the end of last year. The four brands have their own core product, including HA BARRIER CONDITIONING SINGLE USE ESSENCE of BIOHYALUX, Superior Queen Essence Ampoules Serum with HA and Copper Peptide of Quadha, Saccharomyces Rice Radiant Essential Toner of Bio-MESO, MEDREPAIR REJUVENATING REPAIRING MASK of Medrepair, etc. The Regulations for the Supervision and Administration of Cosmetics put into effect on January 1, 2021 offers more scientific and strict management for raw material, product and safety, furthering the divergence of the whole beauty industry. Factories are becoming standardized, and cosmetic labels require not only to note "total ingredients", but also the corresponding "net content". This forces the whole industry to add efficacy ingredients according to specific standards. Such regulations bring forth opportunities and challenges for the entire market of cosmetics and phase out companies with emphasis on marketing over R&D, allowing technology R&D companies that operate in compliance and embraces changes to gain strength. Bloomage Biotech's investment in R&D increased significantly in the first half of 2022, up by 109.24% year on year to USD 12.0168 million, accounting for 6.49% of its revenue, the highest share within nearly three years. Recent years witness not just the regulatory shift, but how the market has gone gradually toward functional skincare products. Consumers become more prudent and strict about skin care products for they are more willing to trust the original effect from the ingredients and formulas per se than the elaborate marketing. In Chinese consumer market of functional skin care product, Bloomage Biotech, Botanee, Jahwa are all leading enterprises within the industry. According to the 2021's financial report, these three companies invested 280 million yuan, 113 million yuan and 163 million yuan in R&D over the past year, accounting for 5.75%, 2.8% and 2.1% of respective revenue. All of them boast their own R&D center, with great competence of each's R&D team. As for the present situation of the market, enterprises with solid R&D strength fare better over the long haul. Zhao Yan,the chairman of Bloomage Biotech,repeatedly highlights within the company that "behind the rise of Chinese brands is the confidence in their own product, of which the underpinning is confidence in their technology." Bloomage Biotech's R&D team is the epitome of Chinese brand's R&D strength. For some time to come, we are sure that Chinese enterprises represented by Bloomage Biotech will secure their own place in the international arena.

Abstract: Recently, the 2022 "Pearl +" Chinese Ingredient Summit will kick off in Deqing, China. The summit is committed to the exchange and discussion of Chinese traditional cosmetics ingredient "pearl +" and highlighting the crucial role and relevance of Deqing pearl as an important agricultural heritage in the development of modern industry patterns. CHAILEEDO learned that, in July 28-29(China Standard Time), the 2022 "Pearl +" Chinese Ingredient Summit will be opened in Deqing, China, with a commitment to the exchange and discussion of Chinese traditional cosmetics ingredient "pearl +"and highlighting the crucial role and relevance of Deqing pearl as an important agricultural heritage in the development of modern industry pattern. The 55-year-old Chinese brand (OSM) has been doing deep research of its pearl technology. In 1967, the concept of "pearl skin care" was unveiled by OSM, and the systematic pearl research system was established step by step in over half a century. The brand has grew into the leading brand of pearl whitening and pearl skin care based on offline channels and its established brand power. The product process utilizes "Deqing pearl system" ancient technique and combines modern technologies to develop products with pearl as the main ingredient. For years the research team has successively made breakthroughs in its key core technologies such as "Compound technology of Pearl and skin care products", "Submicron powder technology" and "Purification technology of Pearl Polypeptide". In fact, whitening has been the basic function of public concern for its huge market demand and fierce competition about relevant ingredients. According to a report released by Intelligence Research Group, China's consumer market of whitening products reached USD 97.554 billion in 2020, with whitening effect demand accounting for 42.2% of the total concern about the efficacy of skin care products, and the figure is still on a sustained rise. Also， the market sees more whitening ingredients products contain, such as arbutin, vitis, nicotinamide, vitamin-C and so on. China has been delving into pearl whitening for decades as one of the earliest countries to make use of this substance. It is recorded that, as early as 4,000 years ago, mussel can produce pearls in Shangshu·Yugong, a chapter of the Book of Xia section of the Book of Documents, and giving great advantages to pearls as an authentic Chinese ingredient. As its best-selling item, OSM's Whitening and Spot Banishing Mask registered sales of nearly 100 million pieces in 2020, ranking first on the Tmall's facial mask sector. The star product "Pearl Lucent Whitening Essence" also achieved a record high in omni-channel sales of over 3 million bottles, with retail sales of USD 86 million. In 2021, according to the report released by Tmall's FMCG division, OSM still ranks among the hundred-million club, retaining its TOP6 ranking among domestic brands, and its whitening and spot banishing facial mask recorded a turnover of 20 million yuan. According to data of O&O Consulting, OSM had the TOP6 beauty product sales in Tiktok and among the TOP8 in Kuaishou from January to October 2021. The reason why explosive products can be strong out of the circle is that Chinese brands pay more and more attention to building barriers from raw materials to enhance their core competitiveness. Whether it is the independently developed "pearl polypeptide" added to the "Pearl Lucent Whitening Essence" of OSM, the exclusive superyeast HiMurchaSin of JALA is, Oryza Sativa (rice) Lees Extract and the Artemisia Extract from JAHWA, Prinsepia Utilis Seed Oil of WINONA, and Polycalm from Zhiben, all these exclusive ingredients have boosted the confidence of the national brands. As functional skincare products are now prevalent, consumers have more strict requirements for ingredients of the cosmetic products. The authentic Chinese raw materials and ingredients have also improved accordingly, thus improving basic R&D capacity is inevitable for enterprises to stay afloat. Many brands are aware of the urgency of building up their R&D strength, by which they can stay in the game of industrial transformation.

Abstract: Recently, the hit singer Wang Xinling endorsed the Mask family and launched a new "Anti-aging bionic mask". This collaboration makes use of Wang Xinling's national popularity and her gold-sucking ability with a comeback to help the Chinese brand Mask Family expand its brand voice and push it to a higher level. In recent years, when brands select celebrity endorsement, besides weighing the flow of stars and their ability to bring in goods, the fit between the overall image of the star and the brand image is also a key concern for companies. The chemical reaction between the positive image presented by the star artist and the brand, to a certain extent, reflects the philosophy and value of the endorsed brand, which will help expand the brand's popularity and influence. Recently, the Chinese mask brand, Mask Family seized the opportunity to spread, officially announcing the "Sweetheart Goddess" Wang Xinling as the spokesperson for the brand's mask, while fully open the online and offline linked marketing strategy. According to the data from the WeChat official account, young female consumers aged 18-24 account for more than 80% of the online trading platform in Tmall and Taobao. Therefore, the choice of the spokesperson is in line with the positioning of the consumers. Mask Family, a brand of Shanghai Yuemu Cosmetics Co.Ltd.,has maintained an annual sales growth rate of over 200% for 4 consecutive years. In 2020, the post-epidemic era, the emerging beauty brand Mask Family started with a very eye-catching performance, a number of explosive masks continue to sell hot. Mask Family's mung bean mud mask, gauze mask and black mask performed well in the first wave of the double 11 pre-sale, with sales of the explosive mung bean mud mask exceeding 460,000 bottles, gauze mask sales exceeding 3.83 million pieces and black mask sales exceeding 4.54 million pieces in the Tmall flagship store. In the 2021 Tmall Double 11 Festival, in the beauty subfield where the competition is white-hot, the sales of Mask Family once again broke the billion mark，representing the new brand once again among the Tmall "100 million club", becoming one of the 299 global brands whose sales broke 100 million on Double 11, and ranked sixth in the 2021 annual list of the most preferred national makeup brands by users, as announced on the official website of Userspeak. In the competition with international brands, Chinese brands tend to be better at marketing and channel end, slightly lacking in quality and brand power building. Therefore, to strengthen the research and development end to enhance brand power, establish a brand gene different from the international brands, is undoubtedly an important issue in the development of Chinese beauty brands right now. From the official website of Mask Family, we know that Mask Family has been researching facial masks for 15 years since its establishment in 2007, and has mastered more than 30 core mask technologies so far. In these 15 years, Mask Family is the first domestic brand to develop and produce the niche mask category of mud masks, which has made breakthroughs and innovations around the core of mask care.In terms of research and development, Mask Family also actively enhances its own R&D(research&development)strength and cooperates with many top universities such as South China Institute of Collaborative Innovation of South China University of Technology, National Nanomedicine Engineering Technology Research Center of Huazhong University of Science and Technology, State Key Laboratory of Food Science and Technology of Jiangnan University, etc., to conduct in-depth research on the sensitive ingredients of skin care ingredients, the R&D and production technology of facial masks and the efficacy of facial mask products. The current Chinese mask market is highly competitive and there are four main factions of market players, namely domestic professional mask brands, domestic integrated cosmetic brands, international brands and Japanese and Korean brands. According to a market research report on China's mask market by AC Nielsen, in 2020, the sales scale of China's mask market will be as high as US$2.64 billion, up 45% year-on-year. Meanwhile, the existing market penetration rate of mask in China is 17.7%, while the penetration rate of cosmetic market is 83.3%. From the perspective of the whole market, domestic private brands have occupied an important position in the domestic mask market by virtue of their "pro-people" prices. According to CNPP data and network user research results, the current top five brands in China's mask industry are: UNIFON, One Leaf, Mask Family, Pechoin, Hanhoo. China Research Industry Institute's data statistics show that in 2022 China's mask market size has reached 6.682 billion U.S. dollars. Among the Top 8 brands in the sales of smear facial masks on Ali platform in 2020, the domestic skincare brand GEOSKINCARE took the highest market share with 7.4%, while Mask Family ranked fourth with 3.8% market share. China currently has a huge market in the mask industry, but also faces the problem of low user loyalty, coupled with the previous "dolphin advertising" marketing flop to the brand has caused a certain negative impact. The official announcement of the new spokesman has brought a wave of flow, but whether the brand can still follow up will require the support of the strength of the product itself.

Abstract: At its Consumer Expo debut, BLOOMAGE BIOTECH said that it would continue to promote the implementation of multi-brand and multi-category strategies to continuously satisfy the diverse needs of different users. According to CHAILEEDO, the leading enterprise of hyaluronic acid, BLOOMAGE BIOTECH, exhibited more than 200 products of 29 brands in the second China International Consumer Products Expo(CICPE). Compared with the first CICPE, BLOOMAGE BIOTECH exhibited more abundant and comprehensive products, and paid more attention to the display of high-quality products and brand image. At the Consumer Expo debut held at the second China International Consumer Products Expo, BLOOMAGE BIOTECH mainly brought seven products of seven sub-brands. Among them, BIOHYALUX, QuadHA, MedRepair and Bio-MESO, are relatively well-known brands. In addition, BLOOMAGE BIOTECH has also brought the oral care WO, the high-end intensive care brand SENSEWOODS and the functional drink brand WHATER. It is not difficult to see that the deployment of BLOOMAGE BIOTECH in the field of cosmetics has extended to the strategic pattern of multiple brands and categories. BLOOMAGE BIOTECH told CHAILEEDO, "from functional skin care products to functional foods, multi brand and multi category operations can satisfy the diverse needs of different users, and continuously improve and promote the business layout of the company in consumer terminals." Zhu Sinan, general manager of BLOOMAGE BIOTECH Brand and Communication Strategy Center, said that the rise of China's domestic cosmetics is a big trend when talking about the development of China's cosmetics market. BLOOMAGE BIOTECH keenly observed that at present, the consumer population of cosmetics continues to decline, and the proportion of consumer population in GEN Z continues to increase. This group of people will learn relevant beauty knowledge by themselves and consider the investment and value of the brand, which shows that Chinese consumers are becoming more and more picky. At the Consumer Expo debut, Zhu Sinan gave some suggestions to domestic cosmetics brands, deeply promoted technology and accumulated experience. Rely on the power of science and technology to develop products, and then find a suitable way to communicate with consumers. The development of domestic goods is an inevitable stage after the disposable income of consumers reaches a certain stage. The second China International Consumer Products Expo also added a 5000 square meter domestic goods boutique hall, and the independent exhibition hall provided a strong opportunity for well-known domestic brands to display. It can be seen from the scene that BLOOMAGE BIOTECH, as the representative of a well-known domestic brand, has attracted many tourists with its corporate slogan of "LET EVERY LIFE BE ALIVE".

Abstract: SOOCAS(Shenzhen)Technology Co., Ltd)terminated its IPO of The Second-Board Market. The company is mainly engaged in oral care, beard care, hair care, and other categories. In 2021, its operating revenue was $276 million and its net profit was $19 million. In November 2021, SOOCAS filed an application to list on the Second-Board Market. In March 2022, the status of SOOCAS GEM IPO was changed to "suspended", and in the evening of August 3, the official website of the Shenzhen Stock Exchange showed that SOOCAS GEM IPO was terminated and the company withdrew its order, which means that the queue was over 8 months, and SOOCAS failed to hit "Electric Toothbrush First Stock". According to the prospectus, in 2015, SOOCAS entered the personal health care market with an electric toothbrush, and then expanded the product category to beard care and hair care field, of which its own brand "SOOCAS" mainly, also includes "AIRFLY" and "PINJING". At present, SOOCAS focuses on the scene of head care and formed three product categories of oral care, beard care, hair care, which divided into its own brand products and Xiaomi custom MIJIA brand products. CHAILEEDO learned that, the main business income of SOOCAS is mainly oral care products by product category. Oral care products accounted for 61.71% of revenue in 2018, 59.2% in 2019, 59.31% in 2020 and 58.12% in the first half of 2021, which is the main source of revenue for the company. Xiaomi, its largest customer, supports half of SOOCAS's revenue. According to the prospectus, in 2018, 2019, 2020 and the first half of 2021, the related sales amount between SOOCAS and Xiaomi Group was US $58 million, US $93 million, US $123 million and US $76 million respectively, accounting for 73.52%, 61.31%, 60.6% and 56.4% of the current operating revenue respectively. In this regard, SOOCAS confessed that the amount and proportion of affiliated sales during the reporting period were relatively high, and if Xiaomi Group's future purchases from it drop significantly, its business and operating results will be adversely affected. This leads to too much dependence on a single customer as an IPO company, and if a large customer has operational problems, it will directly affect SOOCAS. In addition to heavy reliance on Xiaomi, heavy marketing rather than research and development is also a long-standing criticism of SOOCAS. According to SOOCAS's prospectus, SOOCAS's selling expenses rose from $6,436,900 to $27 million in the first half of 2018-2021, and the selling expense ratio climbed from 8.15% to 20.43% year by year. And among marketing expenses, advertising and marketing expenses are the highest percentage. The prospectus shows that from the 2018-2021 first half, the amount of advertising and marketing expenses of SOOCAS rose from $0.02 billion to $0.2 billion. In contrast, the ratio of operating income is 3.73%, 4.88%, 3.35%, and 3.56%, respectively, and the R&D expenses are less than one-fifth of the sales expenses in 2020. Gradually, higher marketing expenses and its sales model are not unrelated, offline channels never seem to be its main battlefield. It is understood that SOOCAS product line direct sales mainly through the Tmall, Youpin, TikTok, Xiaohongshu(RED), Buy Together and other e-commerce platforms for external sales. The company also said that if the company continues to increase in the future Tmall, TikTok, Xiaohongshu and other online platforms advertising investment or increase offline marketing and promotional investment, or platform service rate increase, are likely to lead to an increase in the company's sales expense ratio. At present, electric toothbrushes have entered the stage of product homogenization and fierce competition, except for the function, but it is difficult to have differentiated features. The rapid growth of SOOCAS is inseparable from the support of the giant. And SOOCAS, which was "grew up in the palm of Xiaomi's hand", can hardly avoid being carried forward. However, if SOOCAS wants to be recognized by market investors, it still depends on its own strength. The termination of this IPO also sounded an alarm for the future development of SOOCAS.

Abstract: Recently, the news was unveiled that the Chinese high-end makeup brand YES!IC has pulled out of the market. It is reported that the quit of YES!IC is related to the over-positioning of the brand, niche, and the recurrence of the pandemic. According to CHAILEEDO, YES!IC is the second strategic brand launched by Chuang Yuan Group after Mariedalgar, which was officially unveiled at the 10th-anniversary celebration held by Mariedalgar in 2018. The packaging design focuses on the Nordic ins style, frosted texture, and Morandi color scheme. It is a makeup brand focusing on the new generation of consumer groups who were born after 1995 and 2000. Compared to Mariedalgar, YES!IC is positioning high-end makeup. Its main products are blush, eye shadow, foundation and other products with more than 140 SKUs. It is priced between $7.2 to $44.2. The average price of the products is 20% to 30% higher than Mariedalgar. From public information, it is known that since its launch in August 2018. After only six months, its offline terminals have opened nearly 150 stores. The highest single-day sales in stores are close to $7395. In December of the same year, its flagship store on the Chinese e-commerce platform Tmall was opened. In less than a month, the number of store followers exceeded 50,000. Its popular single products such as Magic eye shadow and Rose eye shadow palette were sold for more than 2,500. Judging from the above data, YES!IC's achievements at the beginning of its establishment were relatively impressive. However, YES!IC's maverick brand tone and artistic makeup display may not fully meet consumers' pursuit of makeup practicality and fail to resonate well with consumers. In response to its marketing posters, some netizens have suggested, "Is this makeup finish a joke? No consideration for practicality at all." In addition, some industry sources expressed that the positioning of the YES!IC is relatively awkward. Compared with the classic makeup Carslan, its design seems a little too fashionable. Compared with innovative brands such as Pink Bear, the price is more expensive. YES!IC is not the only makeup brand to exit the Chinese market recently. Recently, stila, a best-seller in Europe and the US, announced its quit from the Chinese market. Last week, makeup giant Maybelline also announced the closure of its offline stores in China. GlamGlow, an Estee Lauder Group brand, has closed its official stores and opened on mainstream e-commerce platforms in China as well as its accounts on major social media platforms. Brands such as stila and GlamGlow withdrew from the Chinese market either because they did not communicate well with consumers resulting in a lack of acceptance. In addition, the impact of the epidemic may have exacerbated the retreat of these brands. In the first half of the year, China's overall cosmetic retail sales of $28 billion, down 2.5% year-over-year, which was the first decline in the same period in nearly a decade. Its exacerbated the exit of YES!IC Even China's top makeup brands such as Perfect Diary and Florasis, which appear to have matured, are facing declining sales. Perfect Diary posted negative sales growth for the first time in 2021. Its parent company, YSG, reported a 38.3% decline in total net revenue to $131.8 million. YSG explained the revenue decline as a result of weak industry-wide demand for color cosmetics and the recovery of COVID-19 in major cities. COVID-19 also affected offline store sales and a 45.6% decrease in net revenue for its color cosmetics brands (including Perfect Diary, Little Ondine and Pink Bear). And in the month of July just past, sales of Florasis on the Chinese e-commerce platform Tmall fell 51.24% year-over-year. For the Chinese market, color cosmetics brands need to shift their focus more from marketing to product. In the current situation of relatively low market demand, brands may need to create classic long-running products, which can effectively reduce ineffective marketing expenses and also establish a competitive barrier for the brand.

Abstract: Technology skincare brand YOUNGMAY received strategic financing of tens of millions of yuan. China's beauty instrument sector has a bright future. CHAILEEDO learned that YOUNGMAY, which is a specialized technology skincare brand， has completed strategic financing of tens of millions of yuan recently. The investor is the listed company RuoYuChen. This round of financing is mainly used for marketing, said YOUNGMAY. YOUNGMAY was established in 2020 and positioned as a biotechnology company specializing in the field of transdermal research. It has now launched the Spacetime Beauty Booster (home) and Spacetime Capsule-0. According to its founder, the product ranked in the top 10 among the sales list of beauty instruments after its debut on the Alibaba platform and Top 1 in the category of skin boosters in 2 months. Its daily sales exceeded international brands such as Dr.Arrivo, Ya-Men, and others. Its ROI and repurchase rate are higher than the industry average of 3 times. In March this year, YOUNGMAY received a Pre-A round of financing from Plum Ventures, GaoZhang Capital. Public data shows that between January 2021 and May 2022, a total of 12 Chinese local beauty instrument brands received investment. In May 2022 alone, four beauty instrument brands completed financing, namely YOUNGMAY, Hua Fan Shi, PINYAN, and Zhongmeike Bio. According to the "Market Research Report on Home Beauty Instrument" published by Technavio, a UK-based market research firm, the home beauty instrument market share is expected to grow by $4 billion from 2021 to 2026 with a CAGR estimated at 6.58%. The potential of beauty instruments can also be seen in the Chinese market. In the first half of this year, the overall growth of the beauty and skincare category was weak. But the beauty instrument is one of the high-growth sectors. During the Chinese 618 Shopping Festival this year, JD data showed that turnover of RF beauty instruments increased 200% year-on-year. According to the data from Intelligence Research Group, in 2021, the Chinese domestic beauty instrument market size was nearly $1.48 billion. It is expanding at a compound annual growth rate of more than 30%. In 2026, the Chinese domestic beauty instrument market size will exceed $3 billion. Many high-end beauty brands have also entered the game. Lancome, Procter & Gamble, Shiseido have launched the brand's beauty instrument. With the increasing demand for home beauty, beauty brands may enter the sector to get a share of the pie. For example, L'Oreal showcased its newly developed new beauty device - Lancôme Double Optical Facial Tightener at the European Beauty Technology Innovation Show. In 2020, P&G launched a beauty device called "OPTE". In early 2021, Shiseido Group joined hands with Ya-Men to launch the technology anti-aging brand EFFECTIM. In May 2022, the parent company of Florasis, Yige Group, also stepped into the beauty instrument sector and launched the skin anti-aging beauty instrument "OGP collagen 3". It is reported that the R&D team of YOUNGMAY comes from the field of pharmaceutical R&D and synthetic biology while the other core team comes from Filorga, Bloomage Biotech, Winona, JD, Alibaba, Xiao Xian Dun and other companies, all with many years of experience in the beauty and personal care sector. At the same time, YOUNGMAY is also in the development of synthetic biology applications in the skincare of their own raw materials. Its main efficacy is in the anti-wrinkle and anti-aging regeneration direction. The relevant products are expected to officially be for sale in Q4 this year. After the completion of this round of financing, YOUNGMAY announced the establishment of "YOUNGMAY Nano Transdermal Promotion Laboratory" to cultivate the field of transdermal drug delivery and promotion technology. It started joint research and development with the National Nano Center, Huazhong University of Science and Technology, SIP BioBay, Harbin Institute of Technology and other institutions and enterprises to build a new infrastructure of transdermal technology. Regarding this round of financing for YOUNGMAY, Dr. Liang Shuang, Head of Investment Department of Bloomage Biotech International, said, "YOUNGMAY introduces transdermal technology into the home skin care scenario, which will effectively fill the unmet market demand for home skincare products from concept claims to actual solutions for consumers' skin care problems. As the new generation of transdermal technology continues to occupy users' minds and usage habits, YOUNGMAY is expected to establish its own unique consumer scenario between the institutional beauty and home skincare markets."

Abstract: China's first clean beauty brand Dewy Lab has partnered with Shanghai Jiaotong University and the international beauty giant Intercos Group to deepen the layout of clean beauty. On August 10, Dewy Lab announced a strategic cooperation with Shanghai Jiaotong University and international beauty OEM giant Intercos Group. The cooperation between Dewy Lab and Intercos Group, the world's leading beauty OEM/ODM supplier, is focused on clean beauty. According to CHAILEEDO, the two parties will first jointly launch a jointly recognized clean beauty standard, which includes ingredient standards, production process, and procedure standards, animal testing standards, and principles, etc. It will guide future product upgrades and new product development accordingly. In addition, Intercos will provide a team of lead formulators and scientists to support the development of Dewy Lab's product formulations, the development and production of core ingredients for application, and consumer-oriented market transformation. The early emergence of clean beauty in the European and American markets began to sprout before 2005 and entered a buildup state after 2010. With the outbreak of COVID-19, more and more Chinese consumers began to pay attention to the safety of product ingredients, which allows the concept of clean beauty makeup further into the Chinese market. From the market data, clean beauty is ushering in the rising period. In 2021, the market size of global clean beauty was $6.01 billion. It is expected to reach $11.56 billion by 2027. Clean beauty in the next ten years may exceed 100 billion yuan. Foreign brands with a keen sense have seen this new blue sea and have entered the market one step ahead. In 2015, Unilever announced the acquisition of the British clean beauty brand REN. In 2019, Shiseido Group acquired the U.S. Clean Beauty representative brand Drunk Elephant for 890 million. In 2020, Revlon officially entered the field of clean beauty, and P&G acquired the New Zealand clean and natural skincare brand Snowberry. In addition, foreign supermodel Miranda May Kerr also launched her own brand Kora organics. The main focus is plant organic and clean beauty. The above-mentioned brands have also brought clean beauty products to China. For example, Shiseido's Drunk Elephant entered the Chinese market in 2019. Leveraging Double 11 in November of the same year, the brand's network-wide GMV exceeded $1.5 million for the first time in China. Unilever's brand REN has an overseas flagship store on the Chinese e-commerce platform Tmall Global and the highest-selling single product in its store is REN Ready Steady Glow Daily Aha Tonic. It is priced at $31 with a total sales volume of 20,000+. In terms of brand sales, international beauty companies' clean beauty brands are not yet recognized by the majority of consumers in China. Dewy Lab, as a local Chinese brand, may understand Chinese consumers better. According to public information, Dewy Lab is a clean makeup brand incubated by Chinese local first-tier investors and film and entertainment groups. It was founded in March 2020, which is the first Chinese local clean makeup and the first cosmetic brand invested by the Chinese sharing platform Xiaohongshu. As of February this year, Dewy Lab has completed three rounds of financing in one year. Since the product was launched in January 2021, it has been loved by consumers. Data shows that the products of Dewy Lab have reached monthly sales of $742 thousand within six months after the launch of self-operated channels. It exceeded $1.48 million in November 2021 in the big promotion of the Chinese Double 11 Shopping Festival. It continued to exceed $1.48 million in December. A search of the Taobao flagship store showed that the top3 best-selling product currently ranked is concealer, loose powder and powder cream with concealer occupying the first place with the total sales volume of 100,000+. This time, Dewy Lab has partnered with Intercos and Shanghai JiaoTong University to deepen the layout of clean beauty. Amber, the founder & CEO of the brand, said that the cooperation will improve the brand's R&D capability as well as speed up the industrialization of the latest research results. It is contributed to improving the level of clean beauty research in the industry. In the future, a new dark horse may emerge in China's clean beauty market.