Long Yanyu

Guangzhou Blispring Technology Co.,Ltd.,China

The “Regulations on the Administration of the Registration and Filing of Cosmetics”and“Regulations on the Administration of the Registration and Filing of the New Cosmetic Raw Materials”and “Catalogue of Used Cosmetic Materials(2021 Edition)” came into force on the same day on May 1st,2021,ushering in a new stage for the development of China’s cosmetic ecology.On the one hand,regulation will be stricter,and on the other hand,it provides a feel-good factor for raw material innovation.For example,the “Regulations on the Administration of the Registration and Filing of Cosmetics” stipulates that "the registration applicant,filing applicant or domestic responsible who use new cosmetic raw materials under safety monitoring shall be confirmed by the registrants applicant and filing applicant of new raw materials before submitting registration applications or go through the filling.This is a way to protect the innovators of raw materials from the source.However,according to the “Regulations on the Administration of the Registration and Filing of Cosmetics”,the registration applicant and filing applicant of cosmetics shall submit the product formula when going through registration or filing,which makes the enterprise feel insecure.In order to be more exclusive and competitive in products,and to better meet the needs of consumers for efficacy,more and more enterprises begin to seek strategic cooperation with upstream suppliers of raw material as a way to promote exclusive customization of raw materials.

Who is at the forefront of exclusive customization of raw materials? Will exclusive customization of raw materials become the standard in market competition?International brands are pioneers in this field.They invest a lot of money to develop exclusive supply of raw materials,apply for patent protection,or obtain a certain period of exclusive supply,forming exclusive product competitiveness and market leadership.For example,the popular anti-aging ingredient “Pro-Xylane” in recent years was originally developed and launched by the L’Oréal Group.The ingredient was used as the core of the eye cream in vogue by its subsidiaries “Helena Rubinstein” and “Oreal Revitalift Filler”.Pro-Xylane is not a single ingredient,but a combination of ingredients,and is named as such to facilitate marketing.L’Oréal Group applied for a synthetic process patent for it and used this patent extensively.

With the improvement of domestic cosmetics ecology and the growing strength of Chinese enterprises,more and more domestic pioneers are beginning to capture the market for exclusive customization of raw materials.This is in line with international practice to a certain extent.For example,in January 2021,in order to promote the technological upgrading of its brand products,PROYA signed a new strategic cooperation agreement with Ashland(China)Investment Co.,Ltd.According to the agreement,Ashland will tailor the exclusive ingredients for PROYA.In March 2021,PROYA signed a strategic cooperation agreement with BASF SE,the world’s first giant of cosmetics raw materials,to jointly develop exclusive ingredients with “PROYA characteristics” for the local market.In March of the same year,as China’s leading ODM cosmetics company and mask production leader,NOX-BELLCOW and Jinan University established a joint research and development center,including “codevelopment of new cosmetic raw materials based on genetic engineering technology” to seize the leading edge of materials.

The customization of raw materials once dedicated to big brands is making its way to more and more Chinese companies.On the one hand,it means the rise of Chinese innovative raw material manufacturers and attention to innovation at source,on the other hand,it also highlights the growth of Chinese brands.They have force and strength to reach strategic cooperation with international raw material giants to make Chinese brands more competitive in R&D.Of course,one of the most direct factors is the implementation of “Regulations on the Administration of the Registration and Filing of Cosmetics”.

Industry insiders said that the brand began to look for large raw material manufacturers for customization,in response to the new regulations requiring the disclosure of formulas.To a certain extent,the exclusive customization of raw materials is a protection for the product formulas of enterprises under the new regulations,so that other competing companies,even in the case of formula disclosure,cannot produce the same product.In the future,there will be more and more brand companies seeking customization of raw materials.In this process,the raw material manufacturers with technology and innovation ability have more advantages and can seize the market opportunities.It is difficult for raw material traders to do the same.Especially in the long run,the brand owners and raw material manufacturers shall cooperate strategically to jointly customize the raw materials.In this way,raw material traders can get a lot of resources from the brand owners to decrease the pressure.And the brand owners can take the lead to enjoy the unique raw material technology achievements,and win more advantages in product innovation,forming a virtuous circle.

Therefore,the joint customization of brands owners and raw material manufacturers will break the deadlock of domestic homogeneous competition.In recent years,consumers have a new pursuit for product types and raw materials.In the case of similar types and impressions,it is better to seek a new way out from the source of raw materials.

In this regard,industry insiders said that as domestic leading enterprises begin to jointly customize raw materials with international raw material giants,the market will usher in a wave of opportunities for localization of imported raw materials.It is said that in addition to the exclusive customization of raw materials,there are also early signs in the upstream facial mask fabric manufacturing.An innovative facial mask company will exclusively supply the new mask fabric it has developed to a certain brand.Of course,this is also a win-win situation,with both sides jumping out of low-quality and low-price competition.First of all,for the fabric manufacturer,it saves a lot of promotion cost,and at the same time,it secures sales and profit,so that they can focus on developing more innovative products.For the brand owners,getting an exclusive customized product is the best exclusiveness,which ensures the unique competitive advantage of the product from the source.

This also means that the competition threshold in the upstream gets higher,and the enterprises with innovation ability in the upstream supply chain will stand out and win the favor of brands owners and resource preference to achieve mutual creation and win-win situation.