Chen Ye

ChemLinked,China

The claim “cosmeceutica”is strictly forbidden in China since 2019.However,cosmeceutical can still be sold in China as general cosmetics.In the meantime,functional skincare,a claim that is similar to cosmeceutical,has been strongly trending recently.

Cosmeceuticals are products that have both cosmetic and therapeutic(medical or drug-like)effects.Cosmeceuticals is a globally popular industry,with different names in different countries,such as active cosmetics in Europe and functional cosmetics in South Korea.Regulations about this sector are also vague in many countries.Japan is a country that has legally established a sector called “quasi-drug”between medical drugs and cosmetics,thereby giving“cosmeceutical” legal status and special supervision.

What about cosmeceutical in China? What are Chinese consumers’ attitudes to this sector? What about corresponding regulations? Is it a potential sector in China? .

Cosmeceutical

At present,China’s cosmeceutical market still accounts for a small share of the entire cosmetics market.Compared with the average penetration rate of 50% to 60% of cosmeceuticals in Europe,America,and Japan,sales of cosmeceuticals in China currently only account for 20% of the domestic cosmetics market,which means huge development potential for cosmeceutical brands.

However,the Chinese government holds a very cautious attitude to cosmeceutical.In January 2019,the National Medical Products Administration(NMPA)clearly stated that cosmetics’ claims,such as “cosmeceuticals” and “medical skincare products”,are illegal.At the end of the same year,the NMPA issued another announcement stating that cosmetic products are prohibited from using medical terms and words that indicate or imply a medical effect.After that,major e-commerce platforms removed all products claiming as “cosmeceuticals,”,“drug cosmetics,” and “medical skincare products.”

From October to December 2020,the NMPA launched an inspection campaign targeting illegal cosmetics nationwide.Cosmetics that illegally claim“cosmeceuticals”,“drug cosmetics” or “medical skincare products” were one of this campaign’s focus.

We can see that the claim “cosmeceutical” is strictly banned in China.Cosmeceutical that wants to sell in China can only be claimed as general cosmetics.

Functional skincare products

In 2020,functional skincare products,a new claim similar to cosmeceutical,became trending in the Chinese market,Many people suffered more skin problems because of mask-wearing during the pandemic in 2020,so they paid more attention to skin health and repair.Skincare products with repair and relief functions became trending during this period.These skincare products,which used to be mainly claimed as cosmeceutical,now are claimed as functional skincare products to distinguish themselves from general cosmetics.Many functional skincare brands stood out and performed well in 2020.

International brands

L’Oréal Group is undoubtedly a strong competitor in the functional skincare market since its active cosmetics division owns several famous functional skincare brands,including CeraVe,Vichy,La Roche-Posay,and SkinCeuticals.In 2020,only this division recorded an 18.9% YoY growth rate while the other three divisions all showed decrease trends.2 Kao also stated in the 2020 financial report that its two functional skincare brands,Curél and freeplus,had excellent performances.Dr.Ci Labo,Johnson &Johnson’s ace functional skincare brand,posted nearly flat sales compared with the same period last year,showing strong risk resilience.

Domestic brands

Domestic functional skincare brands are also emerging.As the top domestic functional skincare brand,Winona achieved 930 million sales in the first half of 2020.On the Double 11,2020,Winona ranked 9th in the Top 10 Tmall skincare and beauty products,becoming the only domestic brand on the list.The capital market is also bullish on the brand.Botanee,the parent company of Winona,successfully launched an IPO in March 2021.Its stock price rose 272.09% on the first day.Its market share reached 70 billion yuan,making this company the most valuable Chinese cosmetic company(Higher than Yatsen Global,Proya,and Jahwa).Other domestic functional skincare brands also performed well.The growth rate of Yaodu Renhe,a sub-skincarebrand of Renhe Pharmaceuticals,reached 516% from June to August 2020,and the growth rate of Dr.Yu,another functional skincare brand from Jahwa Group,reached 238% in 2020.Runbaiyan,another functional skincare brand from Bloomage Biotech,grew at a rate of 147% from June to August in 2020.

In conclusion,the claim “cosmeceutical”is strictly forbidden in China.However,cosmeceutical can still be sold in China as general cosmetics with proper function claims.In the meantime,“functional skincare product” can be a replaceable claim for cosmeceutical.