The Cosmetic Contact Lenses Market is Going to Cool Down!

The explosive growth of the cosmetic contact lenses market has ushered in strong regulation.

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Recently, the National Medical Products Administration official website issued a "notice on the special rectification campaign to regulate the production and operation of decorative cosmetic contact lenses" (hereinafter referred to as "Notice"), decided that since September 1, 2022, a three-month nationwide organization to regulate the production and operation of decorative cosmetic contact lenses special campaign (hereinafter referred to as "special campaign "). Several industry sources pointed out that this means that the blindfolded and mixed market will usher in a period of purging.

Tightening inspection

As early as June this year, the State Drug Administration's official website issued a popular article on tips for buying and using decorative colored flat contact lenses (cosmetic contact lenses), clearly stating that "cosmetic contact lenses" are contact lenses with a decorative function, the professional name of which is "corneal contact lenses". The article emphasizes that "cosmetic contact lenses" are managed as a Class III medical device in China, and need to pass safety and effectiveness evaluations before they can be marketed, and can only be produced, sold, and used after obtaining a medical device registration certificate, and that manufacturers need to acquire a medical device production license and businesses operating such products need to obtain a medical device operating license.

It is known that the special campaign will crack down on the production and operation of unregistered decorative cosmetic contact lenses, illegal sales online, no medical device production and operation qualification, and actions such as operating beyond the scope. And from the specific content of the Notice, the special campaign has a wide range of inspections and detailed audits. For an instant, the special campaign includes all medical device registrants, production and operation enterprises and the whole industry chain of enterprises and subjects of network trading services third-party platforms involving the production and sales of cosmetic contact lenses in the scope of the inspection.

It is worth mentioning that the "Notice" also places special emphasis on the main responsibility of the third-party platform for online trading services and the display of information on online sales enterprises. Not only that, but the special campaign will also focus on checking whether the third-party platform of a medical device online trading services strictly fulfills the legal obligations of qualification information audit, commodity information monitoring, and disposal of violations, and whether the online sales enterprises are required to display production and operation licenses and product registration certificates, whether the relevant information released online is consistent with the registered content.

The explosive market needs to regulate the order

For decorative colored contact lens production and business practices of special rectification action, more from the explosive growth of the cosmetic contact lenses market also need to strictly regulate the market order.

According to the Tmall Cosmetic Contact Lenses Industry Insight White Paper, the year-on-year growth rate of colored contact lenses will be 20%, 45 and 83% from 2019 to the first half of 2021 respectively, while Mob Research Institute predicts that the market size of China's Cosmetic contact lens industry could reach 50 billion yuan in 2025, which is expected to become the most important market in the world.

The rapid growth of the cosmetic contact lenses market has also attracted the attention of capital and many brands. From 2020 to 2021, 4iNLOOK, Moody, COFANCY, and Kilala several popular cosmetic contact lenses brands, have received external financing several times. Some public data shows that there were 33 financing events in the beauty sector in 2021, raising about 6 billion yuan, of which the cosmetic contact lenses brand took 2 billion yuan.

It is worth noting that the Perfect Diary, which focuses on color cosmetics, has launched the "Star&Moon" series of cosmetic contact lenses. Beauty agency operation company Lily&Beauty operates a Korean cosmetic contact lenses brand OLENS, CHIOTURE, Judydoll, Colorkey, and other cosmetics brands also try to cooperate with the cosmetic contact lenses brands, cosmetic contact lenses and beauty show a trend of cross-border integration.

On the consumer side, this is even more evident, with most consumers regarding cosmetic contact lenses as part of their makeup and a trend toward the beauty of cosmetic contact lenses. According to the Chinese cosmetic contact lenses beauty consumer trends insight released by the CBNData, after the pandemic, young people's attention to eye makeup rose by 66%, while color contacts are seen as the punchline to their eye makeup look, with 40% of consumers wearing them for the primary purpose of enhancing their beauty.

Furthermore, cosmetic contact lenses are also considered to be a profitable industry. Zhao Wei, the founder of COFANCY, has publicly revealed to the media that the gross profit margin for a 10-pack of daily disposable cosmetic contact lenses is up to 50%. Some media reports said that compared to lipstick's 20% repurchase rate, the repurchase rate for cosmetic contact lenses is as high as 30% to 50%.

Correspondingly, cosmetic contact lenses are included in the third category of medical device management in China, which is the highest level of medical devices and belongs to the same category as implantable cardiac pacemakers, prosthetic heart valves, and single-use sterile syringes. Cosmetic contact lenses sellers must hold a business license and a medical device license to operate legally, and if they sell on an e-commerce platform, they also need an Internet drug information service qualification certificate.

"It must have been a serious crackdown."

The most confusing gray area of the industry, according to the aforementioned senior personnel, is actually a variety of cosmetic contact lenses agents, shoppers active in the WeChat friend zone, which is often called "cosmetic contact lenses purchasing agents".

He claimed that, on the one hand, the production threshold for cosmetic contact lenses is extremely high, and it is difficult for overseas brands to enter the Chinese market, and online and offline sales also require a business license, on the other hand, the market demand for cosmetic contact lenses is strong and the gross profit is high, and this characteristic determines that they are easy and suitable for development into a "Wechat business" model.

Some related people in the cosmetic contact lenses industry believe that the "special campaign means that the gray area of Wechat business selling cosmetic contact lenses must be seriously cracked down, and Class III of medical devices strict management system is unlikely to allow the use of gray tactics to sell goods in the friend zone."

The cosmetic contact lenses brand Moody presented to Chaileedo, for illegal violations, unlicensed production operations, and other illegal and business with poor quality, they will be investigated and punished, meanwhile, teach cosmetic contact lenses wearing knowledge, to prevent consumers from buying poor quality products, but also conducive to the standardized and healthy development of the industry.

Obviously, the fast growth of demand for cosmetic contact lenses has given rise to many new brands, but also exposed numerous problems in production and operation. As regulation and enforcement continue to be refined, each link in the cosmetic contact lenses industry chain will be subject to strict regulations, and various non-compliant phenomena and businesses will be purged one by one.