Xu Jiajia,Xu Wenjun

Jinhua Jumei Network Technology Co.,Ltd,China

In January 1999,Pu Shu released his debut album,I Go toYear 2000,whose leading track “new boy” wrote,“put on new clothes and new hairstyles,relax with WINDOWS 98,no suffering in the road to come,what a cool future we will have.” While looking back to the past twenty years at the beginning of 2021,people in the cosmetics industry see the “cool future” they have created.

On January 1,2000,the New Year Greetings ofSouthern Weeklywrote,“this is a once-in-amillennium moment,the centurial changes and millennial transformations converge at this very moment.People all over the world are eagerly waiting to cheer the sunlight of the new century shining on the earth...”

General commercial structures of the industry established in a changing time

What was the Chinese cosmetics market like in 2000? According to relevant statistics,in 1987,the gross output of Chinese cosmetics was only 1.8 billion yuan,and there were merely about 100 manufacturers.In 2000,the sales revenue of the entire industry reached 13.8 billion yuan,and there were more than 3,000 manufacturers.The average annual growth rate of the output value of the cosmetics industry attained around 18% from 1987 to 2000.

In 2000,Feng Shuai just turned 30 years old.Born in a family of traditional Chinese medicine,she resolutely resigned from her job and started her own business.And perhaps the poet Su Dongpo could never have imagined that his famous couplet,“The West Lake may be compared to Lady of the West,suitable for rich adornment or plain dressing,” will influence two modern cosmetic brands characterized with Chinese culture,Inoherb (its Chinese name “Xiangyi Bencao” literally means “suitable herbs”) founded in 2000,and Florasis (its Chinese name “Huaxizi”meaning “Flower Lady of the West”) founded 17 years later near the West Lake in Hangzhou.

Also in 2000,Sun Huaiqing founded Marubi,whose slogan went,“flick,flick,flick,and flick away crow’s feet.” From the outset of its foundation,Marubi firmly established its brand positioning as“eye care master.” Although there has been great disputes concerning the founder and origin of the brand,its own interpretation “ ‘Maru’ means round,and round means beauty” embodies the ancient Eastern philosophy that identifies roundness with beauty.As of the close of January 22,2021,Marubi’s market value exceeded 21.4 billion yuan.

On July 13,2001,Beijing successfully bid for the 2008 Olympic Games.On December 11,China formally joined the World Trade Organization and became the 143rd member.After joining the WTO,foreign-funded enterprises vigorously began entering the Chinese market.Products of low,medium,and high grades appeared in China’s cosmetics industry,and the differentiation of products pushed China’s cosmetics into a phase of rapid development.

According to the market sales statistics released by the China National Commercial Information Center in 2001 and the first half of 2002,the then No.1 brand of make-up cosmetics in China was Maybelline,followed by CMM,Polar Plus,Aupres,Yue-Sai,L’Oreal,Revlon,and Za; the then No.1 brand of skincare cosmetics was Aupres,followed by CMM,Olay,Yue-Sai,Natural Beauty,L’Oreal,SKII,Shiseido,etc.; the then No.1 brand of personal care was Rejoice,followed by Clairol,Pantene,Head＆ Shoulders,Vidal Sassoon,etc.; and the then No.1 brand in the perfume category was Dior,followed by Givenchy,Parizino,etc.

2001 was the sixth year since Maybelline entered China,but its distribution channel layout at the time was dominated by shopping malls in first-tier and second-tier cities.Meanwhile in the broad third-tier and fourth-tier markets,a make-up cosmetics brand,Carslan,started its way of following international brands by capturing fashion elements in foreign magazines,press conferences,etc.and applying them to its products.

“Carslan was not the first domestic brand to step into the make-up cosmetics market; in the same period there was also Colour Zone.Yet it was the first to unify its image in the retail terminal level and to consciously shape a brand image.When I first met Carslan,I was attracted by the beautiful display of this brand,which was no inferior to Maybelline.” A Carslan agent recalled his first impression of Carslan seven years ago.

Also during this year,Zheng Chunying,a former civil servant in Shenyang,moved his beauty center(JALA Group) to Shanghai to produce brands such as Aglaia,Chando,and Maysu.Like many other national entrepreneurs,Zheng Chunying follows the strategy of “encircling the cities from the countryside,” starting from second-tier and third-tier cities and slowly entering into first-tier cities.

In 2003,after working as agents of skincare products for six or seven years,two Wenzhou natives Hou Juncheng and Fang Yuyou decided to start their own business and established Hangzhou Proya Cosmetics Company.In the meantime,She Yuyuan led Cortry Facial Mask to attain the largest share in domestic facial mask market.However,as his business grew larger,he separated from his owner and established MG Mask on his own,quickly breaking into market by means of “single-sheet selling.”

Also in that year,the factory of Xiefuchun completely closed down,and all the factory workers were laid off.The brand restarted its business in 2005,but at that time people still regretted that the earliest make-up cosmetics brand in modern China and the make-up brand that had won the Panama Medal 88 years ago would no longer exist.

In December 2003,L’Oréal acquired the then national brand Mininurse after three negotiations,and just 45 days later (in 2004),it acquired Yue-Sai from Coty.Yue-Sai Kan later on responded in an interview,“Maybe you want to ask me,why did you sell your brand,your baby to L’Oréal? My feeling is that my baby has grown up,and I can marry my baby to a rich guy who loves her very much.”

At the same time,setting our sights abroad,we would be informed of the news that in April 2004,Mrs.Lauder,the founder of Estée Lauder,died at her home in Manhattan at the age of 97.She is known as one of the 20 most influential business talents of the 20th century.Till today the Lauder family still holds firm control of the Estée Lauder Group.In the same year,Procter ＆ Gamble (P＆G) entered China.On November 18,2004,P＆G became the first “foreign highest bidder” in the advertising history of China Central Television (CCTV).

In 2005,with the “South Korean fad” coming fiercely into China,drama series such asJewel in the Palace,My Lovely Samsoon,Full House,Winter Sonataearned the laughs and tears of the post-90’s generation.With the arrival of the “South Korean fad” also came the large-scale “invasion” of South Korean brands.

Thanks to the positive feedback that Laneige had received in the Chinese market,AmorePacific introduced Mamonde into China in 2005.In the meantime,its rival corporation LG Household ＆Health Care established a subsidiary in China,viz.LG Household ＆ Health Care Trading (Shanghai)Co.,Ltd.,an independent sales corporation in China wholly-owned by LG Household ＆Health Care.Since then,the “palace fighting” dramas between LG and AmorePacific has been on.

In March 2005,Sephora,a subsidiary of LVHM,opened its first multi-brand store on Huaihai Road,Shanghai.Just a few days later,Sa Sa International Holdings Limited opened its first women’s product store in mainland China not far away from the Sephora store.Till then,the appearance of franchised stores symbolized that the commercial structures of the cosmetics industry had been established.

On September 2,2005,two core regulations related to the Direct Selling Law,the Administration of Direct Selling Regulations and the Prohibition of Pyramid Selling Regulations,were officially promulgated,and thus Amway and Avon,two major direct selling giants,began their transformation.

Legislation gradually improved in the course of rapid growth of the industry

Some define the year 2006 as “the SARS year”for the beauty industry.As part of the 2006 March 15 events,CCTV revealed the dark truth about“gold thread rejuvenation”.On March 21,2006,China’s State Food and Drug Administration issued a document confirming that “gold thread” was an illegal product without government approval,and required drug regulatory authorities at all levels to investigate and deal with such product in accordance with the law.

On April 2,2006,CCTV’s program Weekly Quality Reports revealed that the factory price of such “gold thread” was 9 yuan each,yet its price was labelled as high as 12,000 yuan to be implanted in the human body.The program also revealed that after the gold thread is implanted in the human body,adverse reactions will occur,including tears,sore eyes,etc.If the implanted gold thread is taken out,the face of the patient may collapse; the patients cannot return to their original appearance before the operation,and may even face the risk of disfigurement.

On April 30,2006,the State Food and Drug Administration of China made a decision to revoke the Registration Certificate for Medical Device of polyacrylamide hydrogel (PAHG,also known as“Amazingel”) and completely stop the production,sale and use of polyacrylamide hydrogel (for injection).The debate of “refinement or disfigurement” surrounding PAHG for years seemed to have eventually been settled; yet it had been used legally in China for nearly 9 years,affecting 300,000 victims.

On September 14,2006,the Guangdong Entry-Exit Inspection and Quarantine Bureau found two prohibited substances chromium and neodymium from the SK-Ⅱ cosmetics products manufactured by Max Factor Co.Ltd.affiliated to P＆G Japan.It was reported that chromium is a skin allergen able to cause allergic dermatitis and eczema,which are long-course diseases and hard to cure.Neodymium is strongly irritative to the eyes and mucous membranes,and moderately irritative to the skin.Inhalation of neodymium can also cause pulmonary embolism and liver damage.

This news immediately triggered a frenzy of returns to SK-Ⅱ counters in major cities such as Beijing,Shanghai,and Guangzhou.Under such circumstances,P＆G had to announce that SK-Ⅱ was temporarily withdrawn from the China market.Despite frequent security incidents,the sales of cosmetics in China exceeded 100 billion yuan for the first time.

The Cosmetics Labeling and Marking Management Regulationswere announced twice,the new edition of theHygienic Standard for Cosmeticswas regulated in July 2007,and the Hygiene Regulations for Cosmetics Manufacturing Enterprise (2007 Edition)came into effect on January 1,2008.In 2007,the state government further strengthened supervision of the cosmetics market,and the number of regulations issued was unprecedented,making 2007 “the year of cosmetics regulation.”

In 2007,with the end of the WTO protection period and the promulgation of Direct Selling Law,China’s cosmetics industry entered a period of allround opening up,and technological reformation and packaging innovation become key factors for cosmetic companies to win the competition.

In March,Baidu Searching Charts released the 2007 Cosmetics Industry Report.The report shows that the high-end makeup brands that grabbed the most attention from netizens in Q3 of 2007 were Christian Dior,Shiseido,and Chanel,whose respective search volumes accounted for 18.36%,12.98%,and 9.84% of all high-end cosmetic brands.

In Q3 of 2007,the natural skincare or active cosmetics brands that received the most attention from netizens were Camenae,The Face Shop,and Herborist.Relevant online search volumes of these three brands and their products accounted respectively for 16.69%,14.56%,and 12.48% of all searches for natural skincare or active cosmetics brands.

The year 2008 is a special one for China.This year,the much longed-for 29th Olympic Games,finally took place in Beijing.However,the global financial turmoil triggered by the subprime mortgage crisis in the United States also severely affected China’s economy.As a result of the Butterfly Effect,the supply of upstream raw materials for cosmetics increased,and companies like P＆G and Unilever have substantially increased the prices of their products from August 2008.Faced with rising costs,small and medium-sized domestic enterprises were struggling,and masses of small enterprise closures occurred in Fujian.In July 2008,Dabao,which once carried the pride of national brands,was sold to Johnson ＆ Johnson.Mininurse,Aoqi,Beijing Violet,and C-Bons were successively acquired by foreign investors as well.

The year 2008 was also referred to as “the Year of Force of New Channels.” International brands represented by Shiseido and local brands like Chando,Meso,and Ito entered the franchise channel by means of chain stores.According to statistics from the China Association of Fragrance Flavor and Cosmetic Industries,in 1980,at the early stage of Reform and Opening-up,the sales of China’s cosmetics industry in 1980 was 350 million yuan,and in 2009 this figure exceeded 140 billion yuan.China’s cosmetics market sales was then next only to the United States and Japan,ranking as the world’s third largest consumer market for cosmetics.The total nationwide retail sales of cosmetics in China reached 74 billion yuan in 2009,increasing 16.9% compared with the previous year.

In July 2009,Bawang went public in Hong Kong,and then won the CCTV advertisement bidding at 110 million yuan,and the brand invited Faye Wong to endorse the HERBORN traditional Chinese medicine skincare series.It was also in this year that the L’Oréal Group ushered in its centennial birthday.

MG went public in 2010,whereas TJOY was sold to Coty.Coty began to make significant inroads into China market this year,and it also withdrew the management of Adidas from Shanghai Jahwa.

In early 2011,Zheng Chunying,chairman of the JALA Group put forward the initiative of “gradual cancellation of trade fairs” in an interview with the media.He held the opinion that the trade-fair mode had brought a lot of pressure to the development of franchised store channels and was a “poison” that should be eradicated.This year,Liliane Bettencourt,heiress to the L’Oréal cosmetics fortune,was finally defeated in the lawsuit by her daughter,since she was diagnosed with Alzheimer’s Disease and was therefore deemed as not suitable for managing the huge property of L’Oréal.Since then,Liliane lost control of the wealth of more than 10 billion euros and had to surrender the power she had held of L’Oréal for more than 50 years.

In the same year,Taobao’s “Double 11” Single’s Day sales event hit a total 24-hour transaction volume of more than 3.36 billion yuan.The number of transactions with successful payment reached 33.69 million on that day,of which 1.71 million were wireless payments.Among them cosmetics sales exceeded 300 million yuan,whereas in 2020,sales of the “Double 11”TOP 1 seller Estée Lauder exceeded 2.4 billion,which was 8 times the total sales of cosmetics in 2011.

According to the The 29th Statistical Report on Internet Development in China issued by China Internet Network Information Center,as of the end of December 2011,the number of Chinese Internet users exceeded 500 million,and the number of Weibo users exceeded 250 million.Weibo began commercialization,and in an instant there came Meituan.com,Lashou.com,24quan.com,Manzuo.com...The e-commerce version of the Hundred Groups’ Battle started,pushing brand marketing into a new stage of development,and cosmetics brands also begun to turn their battlefield from offline to the online space.People were still immersed in the sense of apocalyptic crisis brought by the movie 2012,when in 2012,P＆G’s global performance declined,featured by its worldwide layoffs and advertising shrank.The growth rate of its market share and development of almost all skincare products,detergents,toiletries,and other categories in China also encountered stagnation or slowdown.The resignation of senior executives in China pushed P＆G to the forefront of the storm,and some even called out that the decline of P＆G’s major daily chemical division was an inevitable outcome.

There were still many safety incidents this year.Dozens of well-known cosmetic brands were found to sell products exceeding the standards for heavy metals such as mercury.Unilever (China) was involved in the formaldehyde-containing shampoo incident.Chanel No.5 Parfum was suspected of containing potentially allergenic ingredients,which might face a ban by the European Union.In August 2012,Ms.Jin of Fujian developed redness all over her skin and purple lips and eventually died,after using Watson’s Pearl Whitening Mask.As soon as the news that the Watson’s mask was suspected of causing death came out,it quickly aroused national attention and caused tremendous controversy.

In 2012,local cosmetics companies in China such as Meifubao,Chando,Proya,etc.attempted to go public.To list some representatives,Inoherb applied to be listed on the Shanghai Stock Exchange,and Anglee applied to be listed on the Shenzhen Stock Exchange.However,till the termination of the rumors about “the End of the World”,i.e.December 21 2012,none of these companies had successfully went public.

In December 2012,one year after the “marriage”and successful restructuring of Jahwa and Ping An,the contradictions between the two parties completely broke out in a general meeting of shareholders.

On January 25,2013,Johnson ＆ Johnson announced that it had completed the acquisition of 100% of the shares of Shanghai Elsker Mother and Baby Co.,Ltd.(hereinafter Elsker).This acquisition cost Johnson ＆ Johnson nearly 800 million yuan.The acquisition by Johnson ＆ Johnson’s at that time was considered by the market to have “killed four birds with one stone,” in that it managed to eliminate competitors,expand market share,enrich product categories,and extend maternal and infant channels.

By the middle of the year,the foreign investors continued the “beat or buy” strategy.On August 16,2013,L’Oréal China announced that it would acquire MG Mask at HK$6.538 billion,which was more than 40% of the sales of L’Oréal in China market in 2012.On the evening of September 17,Shanghai Jahwa issued an announcement stating that the company’s chairman Ge Wenyao submitted an application for resignation,which said,“I am applying to the board of directors for approval for my retirement due to age and health reasons.” This surely began to make waves.Jahwa’s share price fell to its limit and Jahwa officially bid farewell to the era of Ge Wenyao.

In 2013,the “Double 11” sales broke 100 million yuan in merely 55 seconds and 1 billion yuan in 6 minutes.Alipay’s total turnover was 35 billion yuan.The TOP 10 brands of cosmetics that year were Afu Essential Oil,MG,Unifon,L’Oreal,Naruko,Pechoin,Olay,Mask Family,Estée Lauder,and Inoherb.The sales of the champion Afu Essential Oil reached 48.84 million yuan,and the sales of Estée Lauder,the future “Double 11” sales champion in 2020,exceeded 2.4 billion yuan.

According to the 2019 Private Domain E-commerce Report released by Channel Wu,the growth rate of the e-commerce market had been in decline since 2014 and the Internet traffic dividend also faded.The report believes that the traffic of the traditional e-commerce giants represented by Alibaba and JD.com were already saturated,bringing difficulty in obtaining customers and raising the costs of attracting customers.Some merchants began to notice the tightness of traffic within Taobao and the sprouting influence of social media.

In the second half of 2014,WeChat official accounts began to spread and prosper,and the rapid development of WeChat also gave birth to a new sales channel,WeChat business practitioners.WeChat business started to sell by organizing groups of consumers from their Moments of Friends.So there was no such concept as a brand; it was purely about the number of customers one could get.Yet the fission marketing of Moments required a lot of“traffic” to deal with the stress,and thus the official accounts were employed to attract followers.The initial routine was quite simple,showing chicken soup sentences,emotional stories,and inspiring cases,finally followed by an introduction to the product.The concluding sentence always wrote,“Want to be a person like me? Scan and become my fans.” Such implanting marketing in a simple and crude way also gave birth to many large brands,such as Choiskycn,Sibu,and so on.

On October 20,a post suspected to be released by Choiskycn’s officials,with the title “The Leader’s Letter to All Official Partners,” circulated in WeChat Moments and aroused the attention of the industry.The letter stated that “for any of our official partners who are also selling Hanhoo products and have not made their choice or made an announcement in WeChat Moments declaring their stand by October 20,their partnership will be immediately disqualified tomorrow.” Later Hanhoo responded to this letter,stating,“before October 21,for those (of our partners)who have to give up Choiskycn because of its banning order,Hanhoo will unconditionally compensate for the loss of their three months’ profits; those who sign the contract with Hanhoo and quit from Choiskycn before October 30,Hanhoo will offer them free goods valued 500,000 yuan as start-up support.”

The case of Choiskycn banning Hanhoo displays that the competition in the WeChat-business channel also became intense.In June 2014,Coty announced that TJOY was officially discontinued.Within just two or three years of acquisition,TJOY’s performance fell drastically,sales reduced by 50%,and it ended up being dissolved,with production lines suspended and employees laid off,making its peers in the industry rather regretted.A year later,its founder Zhuang Wenyang repurchased TJOY.

From Dabao,Elsker,to MG,Yue-Sai,and Mininurse,the examples of foreign giants acquiring local brands were no longer uncommon.However,TJOY become the first example in recent years of domestic repurchase from foreign investors in the industry.In the meantime,a company named Eggshell Network Technology Co.,Ltd.was established in Guangzhou.Perhaps few people at the time would realize that this company was going to breed the first cosmetic “dark horse” in China,HomeFacialPro(hereinafter HFP).

2015 was the year when foreign capital aggressively entered China.On May 25,the Department of Tariffof the Ministry of Finance of China issued a notice to reduce import tariffs on some daily products from June 1.Among them,the import tariff rate for skincare products was lowered from 5% to 2%.On the other hand,the retail sales of cosmetics fell to the lowest point in six years,and the saying of “retail’s winter” began to emerge.

In terms of channels,in June 2015,products of the brand Blue Moon was removed from a national range of Key Account supermarkets such as Renrenle,Carrefour,and RT-Mart,and the shopping guides responsible for the brand were also removed from these supermarkets.Blue Moon marked the beginning of a channel revolution for daily chemical brands.In terms of marketing,KANS invested a total of 1.5 billion yuan in Hunan TV in 2015,setting a record for advertising of local daily chemical brands.In addition,Uniasia Technology invested 500 million yuan to the year-round bombardment of highend advertisement,and created a domestic trend in silicone-oil-free shampoo.

During the “Double 11” sales of that year,Pechoin reached the top and became the only beauty brand whose sales exceeded 100 million yuan,opening its way of receiving three consecutive championships in the “Double 11” events.

Social media on the rise and a fierce competition underway

The WeChat-business brands underwent several major reshuffles between 2015 and 2016.At that time,the elementary code concerning WeChat official accounts channel was to use every existing account.So in a strict sense,the current methods that HFP adopts are in fact inherited from that period.In August 2016,HFP entered Tmall.According to statistics from Euromonitor,from 2016 to 2019,HFP retail sales increased from 278 million to 2.282 billion yuan,with a compound annual growth rate (CAGR) as high as 101.92%.The emergence of HFP also brought two keywords in vogue,“Ingredient Fanatics” and “Social Marketing.”

Local skincare brands began to enter the field of make-up cosmetics.Owned by Yalget,which opened up the make-up market with its BB cream,the make-up brand Skin Match launched a full range of professional make-up cosmetics in September 2016.Chando,which already made attempts in the make-up field,launched the Chando Florid Gradient Lipstick.Meanwhile,Herborist Diancui released its “l(fā)ight makeup” series in January as a move to build its make-up division.And the Chicmax Group,which originally had no make-up brands,obtained full ownership of a make-up brand HiFace in April 2016.

At its financial report conference,L’Oréal Group announced in February 2016 that China has surpassed France to become the second largest market of L’Oréal Group (second only to the United States).In the following April and June,L’Oréal Group successively introduced its high-end fragrance brand Roger ＆ Gallet and its natural personal care brand Ultra DOUX to the China market.The addition of Roger ＆ Gallet and Ultra DOUX brought the total number of brands operated by L’Oréal in China to as many as 23.

It was also in the same year that David Huang joined hands with two of his alumni from Sun Yat-sen University,Vincent Chen and John Lyu,to establish Yatsen E-commerce Co.Ltd in Guangzhou.Maybe they themselves could not have imagined that Yatsen E-commerce would become the first NYSE-listed cosmetics company in China.

On February 28,2017,the THAAD incident broke out,and the “South Korean fad” in the China market turned into a “South Korean phobia”:Chinese consumers boycotted South Korean products; the number of tourists visiting South Korea dropped sharply; a large number of cosmetic stores removed South Korean cosmetics from their shelves,and the performances of numerous South Korean cosmetics companies plummeted.

Also in 2017,local Chinese companies ushered in a wave of listing,Lovefun,Proya,and Ming Chen successfully went public,and Yujiahui passed the IPO review.At the end of May,Yan Ming,who had made great contributions to the development of Inoherb,returned to Inoherb and assumed the position of vicepresident and CEO.

During that year’s “Double 11”,Pechoin delivered an excellent sales result of 294 million yuan,which also made it once again the single-product champion in the beauty category of Tmall “Double 11” sales and successfully won three consecutive championships.

At the end of November,Lu Yixiong announced his “retirement” and indicated that he would mainly be responsible for overseas markets thereafter.Also at the end of 2017,Perfect Diary began its marketing in RED (Xiaohongshu) in an all-round way.

With the overall rise of e-commerce,the entire industry entered the “second half” of full Internet transformation in 2018.Jumei once used four terms to summarize the historical significance of the year 2018 to the cosmetics industry,namely,“New Tracks” meaning e-commerce became the main battlefield,“New Species” signifying the rise of a new generation of brands,“New Talent”which was king in content marketing,and “New Organizations” that reconstructed the relationship between companies and talents.In that year,traditional local brands seemed to have all sensed that they were about to encounter a “middle-age crisis.”

In July 2018,Lv Yixiong,Global CEO of Chicmax,stated in an open letter “To Agents of Chicmax CS Channels” that the current environment for CS (Customer Satisfaction) channels was harsh due to consumption and channel upgrades,and that the transformation and upgrading of channels would take at least two or three years to finish.

Marubi Group’s CEO Sun Huaiqing,Hanhoo Group Chairman Wang Guo’an,etc.publicly expressed their sense of crisis for the CS channels.Sun Huaiqing listed the five major issues that CS channels faced,i.e.discount and clearance,insufficient passenger flow,turmoil of changing employees,online competition,and gaming among vendors.Wang Guo’an admitted that the CS channels used to serve as the “mother” of almost all local Chinese brands,but this “mother” who had raised her children was growing old and pale now and was no longer young and beautiful.

At the same time,changes took place online.There quietly emerged a group of new-generation brands that started business through Internet content marketing,without any offline basis.Newly-emerged prominent brands,represented by HFP and Perfect Diary,sprouted in 2018.They were closer to the minds of the new generation of consumers,and had an inborn edge in cooperating with KOLs and network opinion leaders.

Gradually,acquisition cases brought by the capital or the Internet started to appear.Yujiahui,which started online,planned to acquire Afu; Lovefun Cosmetics intended to acquire a Taobao Partner company named Shanghai Jinjia International Trade;Huaren Pharmaceutical planned to acquire Hanhoo,a company with the genes of an Internet gambler...From these cases it can be seen that local companies were desperate to look for foreign assistance.However,in such a winter,the road to capital integration was nothing easy,and none of the above acquisitions were successfully completed in 2018.

Following the star-like emergence of new prominent brands,local large-scale enterprises also began to collectively launch sub-brands.The JALA Group launched Spring Summer,and Chuangyuan Group (Marie Dalgar’s parent company) launched YES!IC.At the end of 2018 Uniasia launched a new-tech skincare brand Skynfuture,a peptide skincare brand Gittamy,a family private care brand COCOBOBO,and a make-up brand Face Ideas.

2018 was a year of worry and anxiety for traditional cosmetics companies,but it was also a year when the new generation of brands showed great vigor and attracted much attention.

A great many changes were underway in the cosmetics industry in 2019.In this year,new consumer groups represented by the post-95’s generation became the main driving force for the“brand rejuvenation reform.” Online livestreaming shopping,innovative cross-border marketing,and other scene-based marketing gradually became a prevailing trend.Traditional retail explored their own ways of making breakthrough in the CS channels.The introduction of various new policies promoted the gradual normalization of all links in the cosmetics industry.

On January 10,2019,the Department of Cosmetics Regulation of the National Medical Products Administration of China (hereinafter NMPA) issued the “FAQs on the Regulation of Cosmetics,” clarifying once again the official attitude towards the regulation of conception of terms like“cosmeceuticals,” “medical skincare products” and“cosmeceutical products,” that is,products registered or filed in the name of cosmetics that advertise the concepts of “cosmeceuticals” or “medical skincare products” will be deemed illegal.This banning order caused much of a shock in the cosmeceutical market.

The e-commerce company Ruhnn,which successfully incubated many Internet influencers,such as Zhang Dayi,Chonny,Da Jin,was officially listed on NASDAQ in the United States on April 3,2019 (stock code:RUHN).Its issue price was US$12.5 per share,but dropped by 8% after opening.By the end of 2020,Ruhnn had already been delisted from NASDAQ.

In July,Marubi finally realized its goal to go public after several attempts to apply for the IPO,Two months later,Hangzhou Onechance Tech Corp.was officially listed on the Growth Enterprise Market of Shenzhen Stock Exchange and became the first e-commerce operating agency company listed on the A-share market.

On October 8,the Shiseido Group officially announced that it would invest US$845 million(approximately 6.04 billion yuan) to acquire the American skincare brand Drunk Elephant.

In 2019,Tmall “Double 11” put forward the pre-sales strategy and prolonged the sales period,thereafter making the event gradually become a“carnival” for foreign brands.

Although 2020 encountered a “black swan”at the beginning of the year,the cosmetics industry,itself a vigorous market,was never short of significant events.Every link in the industry witnessed drastic changes,including policies,capital,brands,channels,platforms,supply chains,etc.

2020 is the “year of supervision and administration”for the cosmetics industry.On June 29,the State Council of China published the Cosmetic Supervision and Administration Regulation,which was to be implemented on January 1,2021.This regulation,regarded as the “supreme,basic,and fundamental law”of the cosmetics industry,took 7 years to complete the process from being included in the State Council’s revision plan in 2013 to its official promulgation.

Following the listing of MINISO and Perfect Diary in the United States,dozens of beauty-related companies went for IPO in 2020,covering the entire chain of the cosmetics industry,e.g.“the first stock of sunscreen” Nanjing Cosmos Chemical,“the first stock of cotton pads” Winner Medical,and “the first stock of sensitive skin care” Botanee Group.There were also successive cases of companies in the market segments listed,such as Lily ＆ Beauty,and Ruoyuchen Technology.

In this year,many new beauty retail species were born,such as Wow Colour,The Colorist,Suning Jiwu,Only Write,H.E.A.T,NOISY Beauty,Harmay,SN’SUKI,Health Planet and so on.

During the pandemic,livestreaming e-commerce came to the center position.Relevant statistics shows that in October,Wei Ya’s and Li Jiaqi’s total turnovers of livestreaming selling alone exceeded 10 billion yuan.During the 2020 “Double 11”sales,Estée Lauder became TOP 1 in the cosmetics category with 2.4 billion yuan.Winona topped the list of domestic cosmetic products.The functional skincare top dog,along with a group of new prominent brands,started a new round of battle among the “ingredient fanatics.”

Since January 1,2021,theCosmetic Supervision and Administration Regulationhave officially been in effect.On the first press briefing of 2021,Qi Liubin,deputy director of the Department of Cosmetics Regulation of NMPA,pointed out that there were currently over 5,400 licensed cosmetics manufacturers,over 87,000 registered and filed cosmetics entities,and nearly 1.6 million validl y registered products in China,and that China has become the second largest cosmetics consumer market in the world.

The next 20 years of splendor and brilliance has now formally commenced...