China Focus: Our top stories featuring China’s cosmetics industry

1 - ‘Regulatory grey area’: Chinese herbal toothpaste controversy highlights licensing and standards anomalies

Yunnan Baiyao, a Chinese toothpaste brand that has become a household name for its herbal approach to treating bleeding gums, has defended its use of tranexamic acid in its formula, which has led to question the brand’s label claims.​

The ingredients was highlighted by a pair of medical practitioners, who took to Weibo to question if the efficacy of the product was due to tranexamic acid, which is used to treat excessive blood loss, rather than the herbal components.

2 - Aussie cosmetics firm spurns domestic market to sell directly to China through daigou

Alternative sales channel is becoming more organised​ as businesses look for new ways to export.

While once the daigou channel was an unorganised means of distribution from countries like Australia to China for mostly health products and supplements, it is quickly transforming into something far more proper—especially for cosmetics manufacturers Down Under.

As recently as just a couple of years ago, battalions of Chinese buyers in Australia—or daigou—would supply their home networks, made up of friends, family and communities, with goods bought off shelves there and take them home in rammed suitcases. This was due to a continuing lack of trust in domestically made Chinese products in the wake after years of safety scandals.

3 - Shiseido’s nine-month sales growth driven by Japan, China and travel retail

Shiseido’s nine-month profits and sale “reached all-time highs” with help from China and travel retail sales​, and despite natural disasters and supply shortages in its home country.

The Japanese cosmetics giant announced on Nov 8 that net sales reached ¥805.8bn ($7.1bn), up 10.2% from last year. Shiseido also reported an organic year-on-year sales growth of 14% while operating income increased 43.5% to ¥101.4bn ($891m).

“We were able to achieve these results because we have created a virtuous cycle in which a combination of accelerated brand growth and effective cross-border marketing in our Japan, China and Travel Retail businesses is leading to considerable improvement in our cost structure,”​ said Norio Tadakawa, Corporate Executive Officer and CFO of Shiseido Company.

4 - L’Occitane half-year sales boosted by Greater China boom

L’Occitane International has recorded double-digit growth driven by China and Hong Kong​, and boosted by the launch of its Immortelle Reset Serum.

Net sales for the six months ending September 2018 grew 12.4% at constant rates to €595.4m ($679m).

Excluding LimeLife, which was acquired by the company earlier in January, and Le Couvent des Minimes, the company’s sales improved by 4.9%.

The company did not share the profit figures but reported that same-stores sales growth for the half year grew to 2%, from 0.6% in the first quarter.

5 - IFF’s new naturals lab in China is the first outside of the US

International Flavors & Fragrances Inc. (IFF) has opened two new facilities in China this month​, one of which is the company’s first lab focusing on naturals outside of the US.

The Natural Product Research lab, which was slated for launch on October 15, is located in the Nanjing Life Science Park.

Unveiled six days before, the second facility is a flavours manufacturing plant located in the Zhangjiagang Free Trade Zone. The flavours plant is the IFF’s second in China and was planned to supplement IFF’s existing operations in Guangzhou.

“We are proud to build on this legacy with our growing presence in China and look forward to being a strong corporate neighbour in our new homes within the Zhangjiagang Free Trade Zone and the Nanjing Life Science Park,”​ said Matthias Haeni, Divisional CEO, Taste