Recently, Diary Biotec, a parent company of China's cosmetic self-media Yanantang, was penalized for 1500 USD because its Yanantang WeChat official account advertised products with medical words such as bacteriostatic inflammation, anti-allergy relief. CHAILEEDO has lately known from the official website of the Shanghai Administration for Market Regulation that Diary Biotec (Shanghai) Co., Ltd. (short named Diary Biotec) was penalized for 1500 USD because its WeChat official account Yanantang advertised cosmetic products with medical words such as “bacteriostatic inflammation, anti-allergy relief”. According to the written decision of administrative penalty, during China Standard Time of January 7 and February 11 in 2022, Diary Biotec has put out an advertisement on its WeChat official account Yanantang, which used medical words such as “bacteriostatic inflammation, anti-allergy relief” for the introduction of its two products, FACIPHER Activating Extract Essence 5ml, and FACIPHER Regenerate Restoring Serum 5ml. Therefore, Shang Yangpu District Administration for Market Regulation has identified that these medical words used for cosmetic product advertisements have violated the Advertising Law of the People's Republic of China. For this reason, the market regulator mandated Diary Biotec to stop the advertisement and eliminate its corresponding influence, and this company received administrative punishment of 1500 USD. From the source of the public material, we can know that Yangantang was founded in 2016 and started as a self-media, focusing on the content of popularizing knowledge about skincare, makeup, and Aesthetic Medicine. In 2019, Yangantang has launched its self-owned brand: Dairy. In the new brand’s Tmall official flagship store, it has 21 SKU, which is mainly dominated by the category of functional essence, among that, the Dairy Olive VC Essence has been a top-selling product with a retail price of 33 USD and monthly sales of over 3000 pieces. It is worth mentioning that Yanantang is not alone in this kind of penalization. According to the statistics collected by CHAILEEDO, though not very complete, since 2021, there have been over 20 companies subjected to administrative punishment due to the usage of medical words for cosmetic products under their brands. There are also some famous import brands, such as Avène and Foltene. According to the written decision of administrative penalty, in January 2022, Avène’s Weibo account “Avène Doctors Face to Face” posted an advertisement including words like “Avène Spring Water has been validated by in vitro and clinical research for its function of soothing, anti-inflammatory, and anti-irritating...”. Because of this, its Weibo registered company Pierfarber (Shanghai) Cosmetics Trading Co., LTD has been penalized for 15,000 USD by the Shang Yangpu District Administration for Market Regulation. As a matter of fact, China’s regulation department has always been attaching much attention to striking cosmetics advertisements using medical terminology. Before this, CHAILEEDO has been informed by the staff who works for Shanghai Chongming District Administration for Market Regulation, “It is illegal for the cosmetics advertising to use terms containing words that mixed with medical treatment methods or measures, or that will easily mislead consumers to think them as medical terminology. Cosmetic enterprises are better to avoid these kinds of words, otherwise, they will possibly be penalized.” What’s more, besides the Advertising Law of the People's Republic of China, Regulation on the Supervision and Administration of Cosmetics also clearly stipulated that cosmetics label is forbidden to say or imply anything that the products have medical functions. In other words, whether in the Cosmetics Regulation, Advertising Law, or the notice documents issued by National Medical Products Administration, it has been underscored many times that medical words are forbidden in cosmetics advertisements. The frequent penalization for cosmetics companies violating this regulation is a reminder for the industry that their unregulated developing times are gone, they must observe the laws and regulations in practice. Otherwise, they will receive due punishment for it.

The National Medical Products Administration issued the Chinese Cosmetic Good Manufacturing Practice will come into effect on July 1. The registrants, filing applicants, and entrusted manufacturers shall arrange for the production of cosmetics according to the practice. As of July 1, 2022, (the time in the whole article refers to the China Standard Time), the Chinese  Cosmetic Good Manufacturing Practice (hereinafter referred to as the "Practice") will be put into effect. According to CHAILEEDO, the practice makes detailed requirements for the whole-process purchase, production, inspection, storage, sale and recall of materials to ensure that cosmetic enterprises can produce cosmetic products in line with the quality and safety requirements and the anticipated effectiveness in a sustained and steady manner. The practice not only requires cosmetic enterprises to independently set up quality management departments and establish a responsibility system for the quality and safety of cosmetics but also further defines the responsibilities of legal representatives (or principals), the head of quality and safety, the head of quality management departments, production departments and other positions related to the quality and safety of the cosmetic product. With the introduction of more than 10 regulations in a row such as the Regulations on the Supervision and Administration of Cosmetic Good, the Chinese Cosmetic Good Manufacturing Practice, the whole industry in China has witnessed profound changes in relevant regulations and policies, non-compliance problems have also emerged, and the number of cosmetic enterprises getting punished has increased accordingly. According to the Statistical Report of The Supervision and Administration of Medical Products for the first three quarters of 2021, as of the end of September 2021, there were 5,728 cosmetics manufacturers in China, with Guangdong province boasting the largest number of 3,155. Taking "cosmetics", "beauty" and other keywords, CHAILEEDO gathered information about punishment in the Guangzhou Administration for the Market Regulation website, from January to May this year, it issued more than 100 times of cosmetics-related fines that involves hundreds of enterprises being largely production enterprises. In terms of the reasons for punishment, the aforesaid factories and enterprises are punished mainly for the use of prohibited raw materials, unregistered/unfiled products, unlicensed production, the production failing the recording/registered formula, etc. For example, the "3CE EUNHYE HOUSE Dynamic Dreams Mono Eyeshadow" filed by Guangzhou Yanse Cosmetics Co., Ltd. is divided into 15 color numbers in the actual production process with illegal acts including non-compliant filed ingredients and the amount of acrylamide, suspicion of non-compliant manufacturing of cosmetics according to the technical requirements specified in the cosmetic registration or archival materials. The total penalty reaches USD 92.2 thousand; Guangzhou Ruiying Cosmetic Co., Ltd. was fined USD 13.1 thousand for its product "BBHEALTH Baby Prickly  Heat Powder" due to elevated lead content, and fabricated license number and infringement of factory name and site. Behind the rapid development of the Chinese cosmetics market, some longstanding problems such as the inadequate system for product quality management and inferior level of product quality control. The strict requirements of the practice will also cause a number of unqualified cosmetic manufacturers to go under, but the aim of the regulation is not to shut them down, but to reshape the landscape of China's cosmetic industry. Insiders within the industry gave analysis that problems may arise across China's cosmetic industry in the short term, like the degree holders, professionals and senior talents getting poached by strong brands, or substantial jobs needed to be filled in small and medium-sized brands, which will threaten to shut down the company if not filled. Also, factories might face a great loss in talent and the SMEs the inevitable downsizing. But from an industry-wide perspective, the practice has pushed the whole industry a step closer towards specialization, despite some problems during the enforcement process, but it will definitely do the industry well over the long haul in that cosmetics manufacturers will attach greater importance to product quality and safety for consumer's sake.

Abstract: "Super Seed", a plant-based personal care brand, opened its first store in Hangzhou, China at Kerry Centre with an area of about 300 square meters. This is the second "Future Plant Farm" of the brand to be opened in China. The first offline store was opened in Shanghai. According to CHAILEEDO's observation, "Super Seed", established in 2020, is a plant-based personal care brand that focuses on "plant extracts + clean formulas", with the average price of its products within 100 yuan, mainly for young users aged 18-25. Although "Super Seed" was established less than two years ago, its GMV growth rate is very fast with an average monthly GMV of more than 1.493 million in 2021. Most of the growth for GMV comes from product repurchase with an overall repurchase rate of around 35%. In July 2020, "Super Seed" launched its first product, "Cedar Shampoo", which uses a botanical formula with cedar as the core ingredient and focuses on scalp cleansing efficacy, and has been sold nearly 2 million bottles in total (as of November 22, 2021, the number of units sold in the whole network channel statistics), becoming the star single product of "Super Seed". In the Chinese shampoo sector, Seeyoung, as "China's No. 1 silicone oil-free scalp care brand", focuses on silicone oil-free scalp care, with a healthy wash formula of "7 non-additive formulas". During the pre-sale period of the Chinese Double 11 Shopping Festival in 2021 alone, 100,000 sets of Seeyoung Ginger Hair Shampoo were sold out in Li Jiaqi's live streaming(Li Jiaqi: the top live streamer in China), with sales of more than 7 million. Currently, in its flagship store on the Chinese e-commerce platform Tmall, the highest selling product is Seeyoung Silicone-free shampoo/conditioner with total sales of 1.86 million in the Tmall channel alone, priced at $8.8. The international brand L'Occitane also focuses on organic personal care, with its products focusing on nature and its claim that the raw materials come from Provence. In its Tmall flagship store, its categories include body care, facial care, hair care and so on. Compared with "Cedar Shampoo" of "Super Seeds", the same type of botanical formula, the highest-selling shampoo is L'Occitane Intensive Shampoo with total sales of 200,000 units and a price of $41.8. According to "Super Seeds", the reason for choosing to start with shampoo is that this sector is a big enough and relatively competitive market. According to Euromonitor's forecast, the market size of hair care will exceed $10 billion in 2023. By 2026, the market size is expected to reach $11.4 billion. But there are few products that really work well and bring high repurchase and the overall repurchase figure for the broader market is perennially below 10%. Almost every consumer has several different shampoos at home and they are often switched, which is an opportunity for innovative brands. But "Super Seed" is not just a shampoo brand, but built a concept of "skin forest" to create a personal care product system. Currently, the product line of "Super Seed" covers three major segments: scalp care, facial care, and body care. According to the different efficacy and core ingredients, it is divided into several botanical series such as "Blue Lotus", "Cedar", "Chlorella vulgaris" and "Sea Buckthorn", and matched with corresponding botanical IP and interesting introduction. The design of the outer packaging of each series of products also applied the corresponding botanical color scheme. "Super Seed" focuses on retaining the original colors and flavors of plants in its products. Each plant series not only has its own IP image but also the outer packaging design of the products corresponds to the plant color scheme creating a certain degree of interest through relatively uniform copy and drawing style. In March 2021, "Super Seed" launched the construction of offline self-owned channels, and the first offline image store was officially opened in the New world of Shanghai, Shanghai in mid-December 2021. The second store landed in Kerry Center, Hangzhou. The store of "Super Seed" focuses on the concept of "skin forest", and the product areas in the store are divided into face, head and body series, specifically in the individual area display cases with individual plant products on display. The plant IP images were placed on the booths and a plant gallery filled with plant installations creating a "future plant farm" for users. "Super Seed" chose the direct business model in the offline market to gain a foothold in the brand's mind for improving its bargaining power. "Super Seed" also tends to send a signal that natural and sustainable personal care products will become mainstream.

Recently, the American skincare brand fresh released the new product Tea Elixir Skin Resilience Activating Serum in China and joined hands with 3 celebrities to promote the product. On June 27, China Standard Time, fresh, the American high-end skincare brand of LVMH, debuted the new global product Tea Elixir Skin Resilience Activating Serum on Tmall Heybox , alias "Volcanic Tea Serum". It is reported that this product has two specifications, the30ml (priced at $118) and the 50ml (priced at $167). According to the observation from CHAILEEDO, the core ingredient of this serum is extracted from the tea of the volcanic island in Mauritius. After 15 years of in-depth research on tea skincare, combined with 30 years of research towards plant epigenetics, the research team of the brand has overcome the cutting-edge cellular decomposition extraction method to precisely extract the adaptogenic phytochemicals in volcanic tea - APT Tea Extract Muscle Conditioning Technology, which can revitalize skin cellular energy and provide anti-oxidant protection for the skin. Furthermore, the "Volcanic Tea Serum" also contains niacinamide, 5kDA micro-molecular hyaluronic acid, ceramide III and deep-sea macroalgae, which can effectively reduce fine lines and enhance skin radiance. It is worth mentioning that dermatologists have confirmed through clinical trials that after 8 weeks of using "Volcanic Tea Serum", the subjects' faces all showed significant changes such as skin texture and moisturization, fading of lines and contour enhancement. In the product packaging, fresh also reflects the brand's philosophy of supporting sustainable development and environmental protection. The bottle of the serum is made of biodegradable glass, and the detailed outer flower box is made of 100% recyclable materials and environmentally friendly processes. In addition, CHAILEEDO noted that in order to quickly open up the product's visibility, fresh has partnered with the brand spokesperson Gong Jun, the Chinese national team athlete Wu Dajing and the brand experience officer Wang Xinling to launch a series of new product marketing campaigns. In line with the theme of the product's core ingredient, Mauritius tea, which grows in extreme environments, the brand invited Gong Jun and Wu Dajing to tell their stories of facing adversity with resilience in videos. What’s more, fresh also invited the artist Cyndi Wang from Taiwan, China, who recently became popular again through a variety show, to try and recommend the "Volcanic Tea Serum". At present, fresh's new product marketing has achieved excellent results. On Sina Weibo, as of 10:00 on July 1, China Standard Time, the tag #Volcanic Tea Serum had been read more than 100 million times and generated more than 1 million reviews. On Tmall, this new product has been pre-ordered by more than 1,000 people. According to CHAILEEDO, fresh is now present on three e-commerce platforms, namely Tmall, JD and TikTok China, and has also opened nearly 110 offline stores in China. On Tmall, the products that sell more than 1,000 per month include the Sugar Roll-on Deodorant Antiperspirant (priced at $28) and the F21C Black Tea Instant Perfecting Mask Gift Set (priced at $142). On JD, fresh's best-selling products are the F21C Black Tea Instant Perfecting Mask (priced at $125), Lotion Visage Hydratation Intense À La Rose (priced at $63) and Kombucha Cleansing Treatment (priced at $146). It was reported that in 2000, the founders of fresh, Alina Roytberg and Lev Glazman, signed an agreement with LVMH to sell a majority stake of the company. Subsequently, with the backing of LVMH, fresh not only gained access to the capital, management talent and distribution channels needed for market expansion,but also enjoyed operational autonomy. Nowadays, fresh products are available worldwide and the product line has been greatly improved to include fragrances, skin care, body care, makeup, hair care and home products, which are available in counters, boutiques and high-end beauty salons. At the moment, fresh has entered the Chinese market for 11 years. In recent years, this high-end skincare brand founded nearly 30 years ago has also started to explore how to reach young consumers in China, such as cooperating with the top live streamer Li Jiaqi, launching co-branded skincare blind boxes with POPMART, and officially announcing young celebrities as spokesmen. Lev, the founder of fresh, once said in an interview, "In order to develop the Chinese market, we are constantly developing new concepts, which will be done with our gradual research of the market." It is foreseeable that the brand will continue to accelerate the layout of the Chinese market.

In 2022, the scale of electronic beauty instruments in China will reach 1.522 billion US dollars, and there are hidden worries behind such a large scale. CHAILEEDO searched for "beauty instrument" on BLACK CAT, and found a total of 1144 complaints. The main problems of the complaints are excessive heavy metal content, low temperature burns and false publicity. A few days ago, JD.com released the latest JD.com 618 Consumption New Trends, which showed that Chinese consumers had clearer and more professional needs for skin care and beauty tools, showing a trend of "professionalism of the young", and the year-on-year growth rate of the RF beauty instruments and eye massagers was more than 80%. According to data from the third-party data platform MarketIDX, the scale of electronic beauty devices in China reached 1.522 billion US dollars in 2022, of which the scale of hair removal instruments reached 716 million US dollars, becoming the main source of growth. Judging from the sales market distribution of Taobao and Tmall in the past year, electronic beauty instruments occupied 88.08% of the market for facial beauty tools. Looking at the overall Chinese beauty device market, in recent years, the styles and effects of beauty devices have emerged one after another, and the industry standards are imperfect and unsound, resulting in uneven quality and use effects of beauty devices on the market in China. At present, there are electronic beauty instruments with different looks and functions on the market in China, which can be roughly divided into five categories according to their functions: cleaning, moisturizing, lifting and firming, removing acne and freckles, and shrinking pores; technically, there are mainly four categories: radio frequency, microcurrent, phototherapy and ultrasound. CHAILEEDO searched for "beauty devices" on Tmall, and clicked on a beauty instrument that cost 477 US dollars and sold more than 700 per month. The product is claimed to increase skin elasticity by 12%, increase skin moisture content by 86%, increase skin gloss by 26%, reduce the number of crow's feet by 33%, reduce skin roughness by 3.5%, and reduce skin dullness by 46% after 28 days of use. However, on the detail page of the product, CHAILEEDO found that the number of samples of the beauty device was only 60 women aged 28-43 and also that the actual effect of the beauty device may vary depending on the different ways of use and the matching of skin care products. "Microcurrent can promote skin metabolism, red and blue light technology does have the effect of anti-inflammatory repair, and radio frequency technology does have the effect of stimulating collagen regeneration through heating. However, it is impossible for one device to have multiple functions at the same time such as lifting and firming, anti-wrinkle and anti-aging, etc." A dermatologist said: "Most beauty instruments on the market in China have exaggerated in their promotions, seeing promoting skin metabolism as anti-aging, and exaggerating anti-inflammatory repair as lightening fine lines. These technologies can theoretically achieve preliminary results, but because of the lack of clinical trial data, it is often difficult to show the effect after use. In fact, in addition to the inability to determine the effect after use, the quality of the beauty instrument has also frequently complained. On the Chinese complaint platform Tmall Complaint, CHAILEEDO searched for "beauty instrument" and found a total of 1144 complaints. The main problems of the complaints could be divided into 3 categories: excessive heavy metal content, low-temperature burns and false publicity. In October 2020, CCTV's Weekly Quality Report showed that among the 10 beauty instruments it tested, 2 products were found to be at risk of low-temperature burns, and 6 products had excessive nickel release. In 2021, the State Administration for Market Regulation of the People's Republic of China also organized state supervision and spot checks on the quality of beauty instruments. Among them, 81 batches of beauty instruments produced by 75 enterprises in 7 provinces (cities) were randomly checked, and 5 batches of products were found to be unqualified, and the unqualified rate of the random inspection was 6.2%. The quality problems of beauty instruments have been frequently exposed, which has also attracted the attention of Chinese regulatory authorities at the legal level. In March this year, the State Food and Drug Administration of China issued the "Announcement on Adjusting Some Contents of the  Classification Catalog of Medical Devices", which took the lead in clarifying that products such as radio frequency therapeutic devices and radio frequency skin therapeutic devices should be managed as third-class medical devices, and should apply for registration according to the Registration and Filing Management Measures of Medical Devices (Order No. 47 of the State Administration for Market Regulation of the People's Republic of China). From April 1, 2024, China Standard Time, products such as radio frequency therapeutic instruments and radio frequency skin therapeutic instruments shall not be produced, imported or sold without obtaining a Medical Device Registration Certificate in accordance with the law. This means that there is only a transition period of fewer than 2 years left for the radio frequency therapeutic devices. It should be noted that the third-class medical device is the highest-level medical device in China, and it is also a medical device that must be strictly controlled. According to Qichacha's data, the number of registered companies related to beauty equipment in China has accelerated since 2014. From 2015 to 2019, a total of 69,000 companies were newly registered, of which 24,000 were registered in 2019, a year-on-year increase of 41.6%. 2019 is the year with the largest number of registrations in the decade, with a 19.4-fold increase in registrations compared to 2010. The Chinese beauty instrument market, which has grown wildly in recent years, may usher in a new reshuffle under the above-mentioned regulations. Some Chinese industry insiders said that beauty instruments have developed rapidly in recent years, and it is necessary to update and iterate supervision. Strong supervision is definitely the right direction.

Recently, due to the infringement of CHICMAX Group, the court ordered it to compensate Chinese actor Liu Haoran for economic losses and rights protection costs totaling 30,000 US dollars. CHAILEEDO have learned that Liu Haoran has 32.45 million followers on Weibo and is the global makeup spokesperson of Charlotte Tilbury. Recently, the Beijing Court Trial Information Network published the second-instance judgment on the dispute over portrait rights between Shanghai CHICMAX Cosmetics Co., Ltd. (hereinafter referred to as "CHICMAX Group") and Chinese actor Liu Haoran. The court of the second instance dismissed the appeal and ruled that there was an infringement by CHICMAX Group and it shall compensate for economic losses and rights protection costs, which in total are 30,000 US dollars. According to the document, the court of the first instance found that the plaintiff Liu Haoran endorsed the “One Leaf” mask, a product of CHICMAX Group, from September 1, 2016, to August 31, 2018 (China Standard Time). After the renewal of the contract, CHICMAX Group has agreed to have a two-month advertising clearance period. However, in May 2020, a supermarket in Beijing was still selling a One Leaf mask with Liu Haoran's portrait, made by CHICMAX Group. The court of the first instance held that after the expiration of the advertising clearance period, there were still face masks with Liu Haoran's portrait and name on the market, and CHICMAX Group was at fault, which constituted infringements of Liu Haoran's portrait rights and name rights. Therefore, it ruled that CHICMAX Group publicly apologized and paid for Liu Haoran's economic loss which was 29,800 US dollars and the cost of rights protection was 0.2 million US dollars. CHICMAX Group believed that the sale of the infringing facial mask was an act of a third party, and this was not its fault. Even if it was an infringement, the amount of compensation was too high, so it appealed. The court of the second instance held that CHICMAX Group was a product manufacturer, and the advertising infringement also originated from it. The company should bear the tort liability, and the distribution of responsibilities with those outside the case could be resolved separately. The result of the first-instance judgment was not inappropriate, so the judgment rejected the appeal and uphold the original judgment. According to the official website, CHICMAX Group was established in 2002. Its main businesses include skin care, maternal and child care, and personal care. It owns brands such as KANS, One Leaf, and Baby Elephant. As one of the core brands of CHICMAX Group, One Leaf was established in 2014 and focuses on facial mask products. In 2020, One Leaf’s retail sales exceeded 339 million US dollars. CHAILEEDO searched the China Judgment Documents Network with the keywords of "endorsement, portrait rights". In just 6 months this year, there have been more than 40 related cases, most of which were celebrities being infringed. In June this year, Chinese star Guan Xiaotong sued companies for commercial endorsement advertisements using her portrait and name on the outer packaging of the product without authorization. "Qingying" is the brand of the product, a type of face towel, produced by Suzhou Kefan Cosmetics Co., Ltd. and Suzhou Chang Sheng Wu Fang Technology Co., Ltd. The court ruled that the two companies immediately stopped the infringement, apologized publicly and compensated Guan Xiaotong 59,700 US dollars. In addition to endorsement infringement, the medical beauty industry is also the hardest hit area for infringement. For example, Beijing New Oxygen Technology Co., Ltd., a Chinese online medical beauty platform, was sued by more than 90 well-known Chinese stars for the unauthorized use of celebrity photos to promote medical beauty services. According to CHAILEEDO, mostly, the results of the cases of celebrity portrait rights protection are that the artist wins the case, and the company apologizes and compensates. Then why do infringements still exist after repeated punishments and prohibitions? First of all, the star effect has created huge commercial value, and star endorsements have extensive influence and appeal, making illegal companies very keen to use this influence to promote products or services and making many stars" endorsed " and "be under plastic surgery". This is one of the important reasons why celebrities' portrait rights are frequently violated. Secondly, since celebrities are public figures, their photos and other related information are very easy to obtain. The cost of using celebrity portraits as advertisements is almost zero, and these companies have a certain flukey mentality, thinking that celebrities are very busy, and infringements have not been found so they can escape from punishments. In conclusion, companies that arbitrarily use photos of celebrities will not only face compensation but also lose brand reputation and leave a bad impression on consumers. If an enterprise wants to go far, abiding by the law is what it must do.

Abstract: MEIFUBAO has officially announced actress Hani Kyzy as the brand experience officer. Hani Kyzy performed the dance "Dream of Dunhuang" in the singing and acting show "The Chinese Youth" on iQIYI TV program and gained attention. She has 2.057 million followers on the Chinese social media platform Weibo. MEIFUBAO collaborated with actor Hani Kyzy to launch a new whitening single product, Whitening-Brightening and Freckle Removal Essence, claiming to add the plant ingredient Glycyrrhiza glabra L. and the patented extraction technology of the Phytogenic System for spot reduction, which can effectively inhibit melanin. According to the observation from CHAILEEDO, MEIFUBAO, founded by the Huanya Group in 1999, inherits the oriental way of skincare and is inspired by traditional Chinese medicine culture. It extracts plant extracts and integrates modern beauty technology. It adheres to the concept of "balance, regulation and nourishment" to show the natural and healthy beauty of the skin from the inside out. The brand covers categories including sunscreen, whitening, firming, and nourishing focusing on providing a better skin care experience for oriental women. At the 15th Annual Beauty Awards in China, MEIFUBAO was named the "2021 China Beauty Brand of the Year". Unlike innovative brands, MEIFUBAO has 23 years of development. It was born in a beautiful province, Yunnan. As the brand concept of "the Oriental Skincare", it inherits the profound Oriental Skincare and brings consumers an exclusive traditional oriental skincare experience. In 2008, its first Whitening & Sun Block Cream was launched, which also laid the foundation for MEIFUBAO to be the No. 1 in the Chinese sunscreen category for many years. It is reported that from 2013 to 2020, MEIFUBAO was awarded the TOP 1 in China's cosmetic sunscreen category for 8 consecutive years, and was certified by Euromonitor International as the No. 1 Chinese sunscreen brand in China in 2020. Its Whitening & Sun Block Cream has accumulated sales of more than 48 million units for 13 consecutive years, occupying the first place in the sunscreen category in Tmall for 6 consecutive years. In the same hometown of MEIFUBAO, there is a brand similar to it, Yunnan Baiyao's brand Cai Zhi Ji, which also focuses on plant-based ingredients. In its flagship store on the Chinese e-commerce platform Tmall, the top-selling product is Cai Zhi Ji Hydrating Mask, which costs $11.8 and achieves a sales volume of 300,000+ units. And the top selling of MEIFUBAO is MEIFUBAO Whitening & Sun Block Cream, with a price of $11.2 and a total sales volume of 1 million+. From this perspective of that, the two brands have different main categories. In the international brand, The Ordinary from Deciem is similar in price range to MEIFUBAO and is also focused on raw materials. It is nicknamed the "bucket of raw material" by Chinese consumers because of its high-cost performance. The Ordinary AHA 30%+BHA 2% Peeling Solution costs $14.8 with a sales volume of 700,000+. As early as 2017, MEIFUBAO started the strategic layout for the young generation and has signed new generation stars such as Zhu Zhengting, Mao Xiaotong, Huang Jingyu, Hu Yitian, etc. In 2021, it even announced Yang Yang as its sunscreen spokesman. In that year, it achieved a total exposure of more than 2 billion times. In terms of online promotion, MEIFUBAO not only covers traditional e-commerce platforms but also extends to social media platforms where young consumers gather, such as Weibo, WeChat, TikTok China, Kwai, Xiaohongshu, etc., so as to communicate with more young consumers with its "youthful image" and increase exposure and reputation among young customers. In the comments of its sunscreen product, some consumers said that they have been using the product for the past two years, and some also commented that the sunscreen effect is better and easy to absorb. From the above-mentioned comment, MEIFUBAO has accumulated a certain number of loyal fans in the past two years. From the perspective of offline channels, MEIFUBAO has also placed advertisements on subways, airports, and outdoor screens in four top-tier cities, including Beijing, Shanghai, Guangzhou, and Shenzhen, to achieve super coverage and create overall exposure through online and offline linkage. Hani Kyzy received attention for her recent participation in "The Chinese Youth". With this cooperation with actress Hani Kyzy, MEIFUBAO also hopes to convey to consumers the brand's focus on the values of confidence in Chinese culture, positive spirit, and multi-effect unity.

Recently, MINISO had passed the HKEX’s listing hearing.According to the post-hearing data, the revenue of MINISO in fiscal 2021 was $ 1.353 billion, with a gross margin of 26.8%; MINISO had opened over 5000 stores, with a coverage of about 100 countries and regions. Recently, CHAILEEDO learned from the website of HKEX that MINISO Group Holdings Limited (hereinafter referred to as "MINISO ") has passed the HKEX listing hearing on June 27, Beijing time, with Bank of America Securities, Haitong International and UBS as co-sponsors. If MINISO gets listed in Hong Kong, it will become a dual-listed company, meaning that it is listed on two stock exchanges and enjoys equal listing status, if it gets delisted in one, the listing status of the other will not be affected. However, a dual listing company is also required to comply with the different regulatory rules within the respective stock exchange, the shares issued in two exchanges are not allowed for cross-market circulation. According to information, MINISO went public on the New York Stock Exchange(NYSE) for an offering price of $ 20 per share in October 2020. As of June 28th at 16:00 (EST), MINISO's stock price stands at USD 8.72, down by 0.34%, with its total market value of USD 2.672 billion. MINISO, a global retailer founded in 2013, owns two brands, MINISO and TOP TOY, according to the dataset post-hearing. According to Frost & Sullivan, GMV sold via MINISO store network totaled about $ 2.8 billion in 2021, making MINISO the world's largest lifestyle product retailer under its own label. Among them, products of its flagship brand "MINISO" cover 11 main categories, including beauty tools, makeup, personal care, etc., with a total of 8800 core SKUs.According to Frost & Sullivan, as of 2021, MINISO had opened more than 5,000 stores worldwide, entering about 100 countries and regions. According to the post-hearing dataset, MINISO's revenue for the fiscal years2019, 2020 and 2021 ending by June 30 was respectively USD 1.401 billion, 1.339 billion and 1.353 billion, while net profits for the same period registered 44 million, 39 million and 213 million respectively, with accumulated losses of nearly USD 300 million. Amid the COVID-19 pandemic, MINISO is also undermined by shutdowns of outlets.MINISO revealed that as of March, it had closed more than 300 stores in China and 11 of TOP TOY, its independent designer toy brand. On top of that, its single-store revenue is undergoing a continuous drop. MINISO's single-store revenue fell by 19.8 percent from $ 402.6 thousand to $ 328 thousand in fiscal 2019 through fiscal 2020. From fiscal 2020 to fiscal 2021, the revenue dropped again by 11.3% to USD 283.3 thousand, a reflection of flagging consumer enthusiasm for MINISO products. And not long ago, MINISO was pummelled by some unwished lawsuits. A few days ago, the two disputes between MINISO and Intercos Technology (Suzhou SIP) Co., Ltd (hereinafter referred to as "Intercos ") were made public with MINISO losing both. According to the adjudication documents, Intercos prepare and produce the goods in line with MINISO's instructions while the latter took no delivery of the goods all the time or finish the corresponding payment. The court held that MINISO had constituted a breach of contract after repeated reminders of failing payment and taking delivery of the goods by Intercos. The court decided to rescission the contract of ordered manufacturing by both parties, and MINISO shall pay to Intercos the money for ordered products and resulting losses over USD 257.9 thousand and the interest on overdue payment. MINISO also noted the risk factors in the post-hearing dataset that "any adverse development of the relationship with the supplier may have a negative impact on the business and the growth prospect". In addition, a source familiar with the matter revealed that "MINISO has always been seeking solutions to the potential delisting risk in the US due to the Foreign Corporate Accountability Act, and this round of listing in Hong Kong can be seen as MINISO's initiative in response to this risk." MINISO's performance has been on the decline, mainly because of the staggering brand influence and unappealing price tag. Listing in Hong Kong will enable more financing for MINISO, promote the expansion and upgrading of the MINISO store network and enhance the brand's global reach. By improvement of its supply chain and product development, MINISO will produce more products that offer good value for money.

Recently, the official overseas online flagship store of Too Faced, a makeup brand of Estee Lauder Companies, announced that it will close up in August. At present. the store is completely emptied of products. On June 28, China Standard Time, Too Faced, a well-known U.S. makeup brand acquired by Estee Lauder Companies for $1.45 billion in 2016, recently announced that the brand's official overseas flagship store on Tmall International will close in August this year. Too Faced said in the announcement that the store will no longer receive new orders from now on, and the goods already ordered will be delivered as scheduled. Furthermore, the membership services and points redemption will remain open until July 27. After the closure of the store, the benefits and services of brand members will also be stopped. Currently, the store has been emptied and all products have been taken off the shelves. CHAILEEDO learned that this online store is the only official store of the brand in the Chinese market. It was reported that Too Faced officially entered Tmall in 2020, and also became the first makeup brand of Estee Lauder Companies to enter China through e-commerce. At that time, Too Faced attracted the attention of 310,000 Chinese consumers on its first day of opening. However, in the following 2 years, the brand has not launched marketing campaigns on social media platforms, and has not even opened official accounts on universal social media platforms such as Sina Weibo, WeChat and Xiaohongshu. It is worth noting that last year, the news in which the products of the brand were on sale appeared frequently on social media platforms. Obviously, this has laid the groundwork for the brand to close its store. Nowadays, the reputation and sales achieved by Too Faced in China are far less than its sister brand Becca. For example, there are only 7,300 notes related to "Too Faced" on Xiaohongshu. In fact, once the news broke, it sparked speculation among industry insiders as to whether the store closure meant the brand's exit from the Chinese market. CHAILEEDO asked Estee Lauder China for confirmation yesterday, but did not receive a response before the distribution of this news. However, the store's customer service told CHAILEEDO, "The brand has adjusted its sales channels in China this time. According to the brand's strategy and business situation, we review it regularly and make adjustments accordingly when necessary." The customer service added, "We look forward to continuing to provide Chinese consumers with a unique shopping experience." When asked if there were other channels of purchase, the customer service said, "If you need to purchase products, you can visit Mecca's overseas flagship store on Tmall." Mecca, an Australian beauty collection store, is also reported to enter the Chinese market through Tmall International in 2020. CHAILEEDO found that Too Faced has only seven items in MECCA's Tmall International overseas flagship store. Among them, the bestselling item is Too Faced Born This Way Sunset Stripped Eyeshadow Palette (priced at $59), whose total sales are only 100+ units, while the total sales of the rest of the products do not exceed 20 units. In most cases, the fact that brands close stores or simply exit a market, is inextricably linked to their own business status and external environment. For the past two years, on the one hand, the general environment has become worse. Take the 618 Shopping Festival that just ended for example, the sales performance of makeup cosmetics is not as good as before. According to the data released by Syntun, during the 618 Shopping Festival, the sales of cosmetics (including 3 categories: skincare, perfume, and makeup) on all e-commerce platforms were $6.1 billion. When compared with $7.6 billion in 2021, there is a decrease of $1.5 billion, with a drop of nearly 20%. Several insiders of the Chinese cosmetics industry have said that COVID-19 has had a much greater impact on makeup products than on skin care. At the moment, wearing a mask has become a norm, so the size of the makeup market is certainly affected. On the other hand, with the rise of Chinese makeup brands, the competition in the cosmetics market has been more and more intense. In recent years, the Chinese makeup brands represented by Florasis, Perfect Diary, COLORKEY, Judydoll and TIMAGE gradually occupy the minds of consumers and compete with a number of international brands. In the 618 Shopping Festival of 2022, Florasis took the fifth place in the Tmall makeup brand list with sales of $27.64 million, surpassing the famous foreign makeup brands NARS and Estee Lauder. The two years in which Too Faced officially entered China in 2020 and then shut up the only online store in China test the potential and versatility of the Chinese beauty market. Even if Too Faced is backed by a big group, it is no longer a big tree to ride under.

In FY2022, the net sales of L'Occitane grew by 15.8% to $1.87 billion, , while net profit reached a record high of $254 million, 57.5% growth compared to FY2021. The excellent performance of the group was mainly due to its brands L'Occitane en Provence and ELEMIS. On June 27, L'OCCITANE INTERNATIONAL S.A., a leading French skin care group listed in Hong Kong, China, announced its key financial figures for the fiscal year 2022. Despite continued turbulence in the macroeconomic environment in FY2022, the group posted outstanding results with a record net profit of $254 million, 57.5% growth as compared to FY2021. The reported net sales were $1.87 billion, representing an increase of 15.8%; the operating profit jumped 43.3% to a record high of $325 million; while the operating margin rose 3.3% year-on-year to 17.4%, the highest level since the group went public. CHAILEEDO learned that the record results were contributed by the very strong operational performance of the core brand, L’Occitane en Provence, as well as the development of the Group’s other brands, notably ELEMIS. In terms of brands, in FY2022, L'Occitane en Provence sold $1.46 billion, accounting for 76.8% of total net sales; ELEMIS sold $237 million, accounting for 12.5%; Lime Life sold $74.22 million, accounting for 3.9%; Solde Janeiro's sold $27.37 million, accounting for 1.4%. When it regards to channels, L'Occitane saw growth in the online channel and a strong rebound in the retail channel. According to the report, this was mainly due to the continued improvement in the business environment as the restrictions related to COVID-19 were lifted in Europe and the United States. In addition, the travel retail, spa and cruise businesses also benefited from the rebound in local and international visitors. As of March 31, 2022, L'Occitane had 1,490 stores worldwide, a decrease of 33 stores compared to last year, reflecting the group's further closures of under-performing stores worldwide. Among them, L'Occitane closed 21 stores in the US alone. As for regions, L'Occitane achieved sales growth of varying degrees worldwide. In particular, the group's net sales in China (which means Chinese Mainland), the United States, the United Kingdom and Hong Kong, China, increased by 16.8%, 13.5%, 21.4% and 24.0%, respectively. André Hoffmann, the Vice Chairman and Chief Executive Officer of L'Occitane, said, "We acquired two strong brands, Sol de Janeiro and Grown Alchemist, in the fiscal year 2022, which will help the group accelerate the entry into new markets and attract younger consumers." Looking ahead to FY2023, L'Occitane expects the sales to exceed 2 billion euros ($2.097 billion) in fiscal 2023, while maintaining solid profitability. It is reported that the group's sales exceeded 1 billion euros ($1.049 billion) in FY2013, which meant a significant milestone of the group. In recent years, L'Occitane has stepped up its presence in the Chinese market, successively partnering with many well-known Chinese actors and artists, such as Luhan, Liu Shishi, Bai Jingting, Zhao Liying and Zhu Yilong. In addition, the group continues to leverage its strengths in e-commerce platforms, with sales exceeding 100 million yuan ($14.91 million) in the Double 11 Shopping Festival launched by Tmall in 2021. In FY2021, China has become L'Occitane's biggest market and the only market in which the group achieved positive growth worldwide. According to the latest financial report, the Chinese market continued to perform well in the past fiscal year. China’s net sales for FY2022 were $344 million, an increase of 24.4% as compared to FY2021. Specifically, the group achieved growth in all channels in China, with the online channel performing particularly well. Otherwise, L'Occitane noted that e-commerce sales accelerated in the fourth quarter of fiscal 2022, accounting for 33.1% of total sales for the year. It is worth noting that L'Occitane reported that the overall sales momentum remained strong throughout the year until restrictive measures were taken by the government in major cities in March 2022. In FY2022, L'Occitane opened 10 new stores in China. Among them, ELEMIS opened one new store in Shanghai and one in Nanjing. At present, China remains the market where the group has opened the most stores, with a total of 208. In Hong Kong, China, the reported net sales of the group were $125 million in FY2022, achieving a 25.7% growth compared to FY2021. The group said the strong performance in the region was mainly due to the expansion of travel retail channels and web partners. With the lifting of COVID-19 prevention and control measures in Shanghai, China, L'Occitane's logistics in China have returned to normal in June this year. According to the fiscal report, the group remains confident in the Chinese mainland market and forecasts double-digit sales growth in China in FY2023.

Recently, Omey was fined because it said that there was hyaluronic acid in the product during its promotion, but the ingredient list showed that it was actually sodium hyaluronate in the product. The industry has long been accustomed to equating the two in publicity and even filing, but this is obviously not desirable. On June 28, China Standard Time, CHAILEEDO learned through the official website of the Shanghai Municipal Administration for Market Regulation that Shanghai Omey Co., Ltd. conducting false or misleading propaganda was fined 448.8 US dollars by the Shanghai Jing'an District Market Supervision and Administration Bureau a few days ago. According to the report, on December 7, 2021, Shanghai Jing'an District Market Supervision and Administration Bureau received a report that Omey falsely advertised products in its e-commerce store "Omey Flagship Store". After investigation, on November 19, 2021, Omey released the product page of "Saeve serum botanique hydratant apaisant" on the "Omey Flagship Store" that said it provided 1000 times deep hydration with hyaluronic acid extracted from plants. According to the paper Physiological Functions of Hyaluronic Acid and Its Application in Cosmetics and Food of Beauty and Health Care provided by Omey, hyaluronic acid molecules can absorb and retain water about 1000 times their own weight. Therefore, the Jing'an District Market Supervision and Administration Bureau of Shanghai believes that the advertisements on the above-mentioned pages may easily lead consumers to misunderstand that the products contain pure and stable hyaluronic acid. According to relevant laws and regulations, Omey was finally fined 448.8 US dollars. Public information shows that hyaluronic acid, also known as "Hyaluronan", is an acidic mucopolysaccharide. It was first extracted from the vitreous body of the bull's eye, and human skin also contains a large amount of hyaluronic acid; sodium hyaluronate is a kind of glucuronic acid that is first extracted from cockscomb, and can also be obtained by fermentation of enterococcus faecalis, and is in the form of white or off-white granules or powder. Both hyaluronic acid and sodium hyaluronate can be used in cosmetics, and their main functions are moisturizing. A famous Chinese expert in skin care called Bing Han also said that Hyaluronic acid is an acid, and sodium hyaluronate is the sodium salt of hyaluronic acid. The chemical structure of the two is the same. Sodium hyaluronate is derived from hyaluronic acid and contains the main functional groups and skeleton structures of hyaluronic acid. From the perspective of skin care effects, the two have similar moisturizing effects. In fact, in the production process of cosmetics, there are many phenomena in that cosmetic companies equate sodium hyaluronate with hyaluronic acid. On the cosmetics supervision APP, CHAILEEDO searched for the keyword "hyaluronic acid" and found that the names of many products were named "hyaluronic acid", but the ingredients marked in the ingredient list were all "sodium hyaluronate". For example, Korea IBL Hyaluronic Acid Mask, Korea CAPSTAY Hyaluronic Acid Mask, Germany Natura Balance Hyaluronic Acid Hand Cream, China STITH Hyaluronic Acid Stock Solution... It can be seen that, whether it is an international brand or a Chinese brand, there are cases where "sodium hyaluronate" is listed in the ingredient list, but the product name is named after "hyaluronic acid". According to insiders of this industry, mixing hyaluronic acid and sodium hyaluronate is the norm in the cosmetics industry. The main reason for mixing the two is that their moisturizing effects are highly overlapping. However, according to the requirements of the Administrative Measures for Cosmetics Labeling, if cosmetics use specific raw material names or words indicating the raw material categories, they should be consistent with the product's formula ingredients, and the efficacy of the raw materials in the product should be consistent with their claims of the product efficacy. The product name is the "shop front" of cosmetics, and it is an important factor in promoting the efficacy of the product and conveying the image of the product. The punishment of Omey not only signals that the disorderly naming of cosmetics enterprises will be rectified but also shows that the Chinese regulatory authorities will be more and more strict in the standardization and rectification of cosmetics naming.

Abstract: Mask Family and Professor Hu Xiaoqing from the National Key Laboratory of the School of Food Science and Technology of Jiangnan University reached a series of cooperation intentions such as jointly exploring the development and application of natural beauty ingredients to provide consumers with safer and more effective skincare solutions. According to CHAILEEDO, Professor Hu Xiaoqing's team from the National Key Laboratory of the School of Food Science and Technology of Jiangnan University visited the Mask Family's R&D center and held a 2-day academic exchange seminar with members of the brand's product department, R&D center and many other core departments. During the meeting, the two sides discussed the future direction of cooperation, the development of natural beauty ingredients and their applications, and visited the factory and R&D center of Mask Family. The exchange gave both sides a deeper understanding and laid the foundation for reaching deep and multi-disciplinary close cooperation in the future. According to the official website of the Mask Family, it was founded in 2007 and its parent company is Shanghai Yuemu Cosmetics Co. Ltd. It is a professional skincare brand specializing in masks for 15 years. It holds 21 core patents for masks and its products cover the care categories of dressing mask, clay mask, washable mask and leave-on mask. And the brand is committed to continuous innovation in raw materials, formulas, and dressing materials and actively cooperate with top universities to strengthen its own R&D and innovation capabilities, aiming to provide consumers with more professional and comprehensive membrane skin care products. During the Double 11 Shopping Festival of 2020, the sales of a single product of Mung Been Mud Mask exceeded 460,000 bottles and the sales of Hydrating Acne Skin Gauze Repair Mask exceeded 3.83 million pieces. The sales of Dark Absorbing Glowing Mask are more than 4.54 million pieces. Its performance in this period led the Chinese mask category sector during the Double 11 Shopping Festival of 2020. The main effect of Mask Family Mung Been Mud Mask is to clean pores, and remove blackheads. The product is priced at $19.2 in the flagship store on Tmall. In comparison, international brands such as Kiehl's Amazonian White Clay have a similar effect. According to Kiehl's official, annual sales of Kiehl's White Clay reached more than 1.81 million units in 2021. It is priced at $49.2 in the Tmall flagship store. As a skincare brand focusing on the field of facial masks, Mask Family has obtained more than 30 independent intellectual property rights including 28 invention patents, such as exclusive patented ingredients: black yeast, double black plant ferments, and 21 core patents for facial masks. For example, the star product of Mask Family - Reverse Time Bifid Yeast Firming Black Mask with its exclusive patented ingredient black yeast. The products enjoy small molecules, good penetration and easy to absorb, and have a strong antioxidant ability and brightening effect on skin tone. This year, Mask Family also applied the latest research and development results to the new nano Moisturizing mask. The new product uses innovative nano wrap technology to achieve targeted transdermal absorption. The ingredients can penetrate the skin's bottom layer so which plays its efficacy in skincare. It provides a more optimal solution for skin deep hydration, and lock moisturizing. It is reported that in 2021, Mask Family and the National Nanomedicine Engineering Technology Research Center from Huazhong University of Science and Technology reached a strategic partnership to build a joint laboratory for the application of cosmetic efficacy ingredients nanocarriers. This cooperation will be oriented to the R&D and application of the top nanocarrier technology in China. It is committed to multiplying the advantages of resources of both the university and the enterprise, accelerating the transformation of scientific and technological achievements, empowering product quality with technology, and achieving mutual benefits. At that signing ceremony, Huang Xiaodong, founder of Mask Family, said, "The cooperation between the two sides allows Mask Family to receive support from the National Nanomedicine Engineering Technology Research Center of Huazhong University of Science and Technology in research and development and technology, helping the brand to blossom in the rapidly changing market and the highly competitive skincare sector, which achieves the improvement of product quality and brand value. " Through "industry-academia-research-medicine" cooperation, Mask Family jointly researches or introduces advanced and mature scientific and technological achievements from universities, hospitals and other research institutes. It precisely matches them with market demand with the strength of talents and academic expertise to solve practical problems of enterprises, which can effectively promote the integration of scientific and technological resources and achieve mutual benefit and a win-win situation.