In the race to expand in every sector, China has recently emerged as one of the most exciting markets for beauty companies. In the past four years, the cosmetics industry in China has grown at a staggering rate. In the next few years, it is expected to reach US $23 billion.
China is home to hundreds of thousands of skincare and make-up aficionados who are ready and waiting to try out new products. They make up a growing base of consumers that cosmetics companies can tap into. For example, Sephora has opened its first store in China, indicating the growing popularity of cosmetics. In order to tap into this market and capitalize on the opportunity, here is an overview of the business of cosmetics in China.
What is the Business of Cosmetics in China?
The business of cosmetics in China is made up of multiple parts: formulation, manufacturing, distribution, and retail. These parts are regulated by the Cosmetics Regulation of the People’s Republic of China (CRPC), which the Ministry of Health (MOH) of China introduced in October 2011. The CRPC sets the rules for the manufacture, formulation, and labeling of cosmetics in China.
The regulatory framework in China is at an early stage of development compared to many other countries. The Cosmetic Regulation of the MOH was approved in 1998 and remains the primary law regulating the business of cosmetics in China.
The Regulatory Framework
The regulatory framework in China is at an early stage of development compared to many other countries. The Cosmetic Regulation of the MOH was approved in 1998 and remains the primary law regulating the business of cosmetics in China.
Before the CRPC, the MOH released the Technical Regulation on Cosmetic Ingredients (CRCHI) in 2000 and the Technical Regulation on Cosmetic Packaging (CRP) in 2002. The CRCHI and CRP set the regulatory framework for the safety, labeling, and use of ingredients and packaging in cosmetics in China.
Manufacturing in China
The CRPC regulates the manufacturing of cosmetics in China. The law defines cosmetics as “prepared for use or sale as bath or body products, or for further processing and sale as final products.” Cosmetics are not included in the definition of pharmaceuticals, which are regulated by law to ensure safety and efficacy. The CRPC specifies that the manufacturing of cosmetics must be carried out in China by companies with a business license issued by Chinese competent authorities.
Distribution in China
The CRPC regulates the distribution of cosmetics in China. The law defines a cosmetics dealer as “any person who engages in the business of selling or offering for sale any cosmetic products.” A cosmetic product is defined as “any product including its ingredients intended for use as a cosmetic, including make-up, hair styling products, soaps, shampoos, sanitary napkins, deodorants, toothpastes, and Oral Health Care products.”
Personal Care in China
The CRPC regulates the manufacture and sale of personal care products in China. The law defines personal care products as “any product, other than food, intended for use in the maintenance of human health, including make-up, shampoos, soaps, deodorants, toothpastes, sanitary napkins, Oral Health Care products, and other similar products.”
Conclusion
Cosmetics in China are in their early stages of development and the industry is still in its infancy. However, the size of the Chinese market, the popularity of make-up, and the increasing demand for safe, natural and organic products have made China an attractive market for foreign companies. Furthermore, the introduction of new regulations such as the CRPC and the Technical Regulations on Cosmetic Ingredients and Packaging have helped the industry to grow. The industry is still in a nascent stage, and it is likely to experience significant growth in the coming years.
Further readings
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