Cosmeceuticals in China.
Although there is no clear cut definition for cosmeceuticals, which in general refer to cosmetic products with drug like benefits, China is expected to move into this market in a bold way, since consumers here are prepared to pay extra for premium products with better safety and efficacy. With the rise of a more knowledgeable, wealthy and beauty-conscious class of urban consumers, cosmeceuticals have come a long way in recent years to become one of the fastest-growing cosmetic options.
While there are few consolidated statistics for the cosmeceuticals market the latest Euromonitor report on China medicated skin care can give us some clues about what's going on in this area. Classifying medicated skin care into different treatments for skin diseases such as acne, skin allergy and hair loss, the report covers the subcategories that can be regarded as cosmeceuticals. According to the report, medicated skin care accounts for 21% of total OTC market size, and 2010 sales rose 10% to nearly $1.1 billion. Due to the growing population as well as growing awareness of self medication, sales are expected to reach nearly S1.6 billion in 2015--a CAGR of 8%.
In contrast although hair loss treatments and acne treatments account for small shares of the medicated skin care segment, they experienced the fastest growth from 2005 to 2010, representing CAGRs of 17.2% and 14.2%, respectively, during that period. This reflects the fact that the cosmeceutical market is presently dominated by these two subcategories of cosmeceuticals. However, injectable and other key subcategories, such as tooth whitening, lip protection and anti-aging, are also boosting profits for cosmetic companies, as new research into ingredients such as stem cells and nanomaterials are changing the face of cosmeceuticals.
While the generally understood definition of cosmeceutical is a cosmetic with some medicinal benefit, it is important to realize that there is no such term as cosmeceutical under the current regulation in China. Industry members and consumers may have their own definition, but the most important thing to remember is that government officials and professional institutions don't have their own definition.
Although most industry experts think that it is important to first establish what cosmeceuticals mean, regulators have already taken action. Ever since taking charge of the administration of cosmetics back in September 2008, the State Food and Drug Administration (SFDA) has issued several drafts of the Regulations and Guidelines on Naming of Cosmetics for comments. According to these drafts, any-medical term or other word implicating or explicating any medical effect or function is not allowed in cosmetics naming. As a result, those marketing terms currently found on the labels and descriptions of product? claiming drug-like effects, such as "cosmeceutical," "medicated skin care" and "prescription," are illegal under these upcoming regulations.
These draft regulations and guidelines have gone through many amendments in recent years. In the version proposed in July 2009 by SFDA, the terms "Chinese Medicine" "Chinese Herbal Medicine" and any other related to Chinese traditional medicine were forbidden to be used on cosmetic names and marketing. Bui this has caused a huge debate, especially among those domestic manufacturers relying heavily on TCMs to differentiate them-selves from international brands. Amid the concerns that domestic manufacturers are the ones who would get hurt the most if this draft went through, the terms related to "Chinese medicine" are permitted under the latest drafted regulations, although medicine-related ones are not.
All these efforts reflect the SFDA's determination to regulate cosmetics that, in turn, will make marketing cosmeceuticals even move difficult in China. Yet, the cosmeceutical market has a huge potential in China and is set to attract major players, where there remains an untapped population with the desire to look young and healthy.
Aside from traditional cosmetics and pharmaceutical companies, an increasing number of major retailers are expanding into this market. For example, Lianhua teamed up with Japan's Crowell for Chinese cosmeceuticals.
In mid-2011, Lianhua, one of the biggest supermarket operators, formed a partnership with Growell Group, a well-known cosmeceutical company in Japan, and Shanghai based Meiribuy, the first Chinese shopping website that provides made-in-Japan products, to create a three-way cosmeceutical joint venture. Aiming to snap up a greater share of the high-end cosmeceutical market in Shanghai, the cosmeceutical stores will expand via Lianhua's existing network resources and eight new stores will open this year. Plans call for 50 stores by 2016.
Matsumoto Kiyoshi, a leading Japanese chain drugstore, will launch its chain stores and supermarkets in Beijing and Shanghai. Well-known for its cosme-ceuticals, Matsumoto Kiyoshi will introduce its own brand as well as those from fellow Japanese company Pola Orbis.
Today's consumers are becoming more knowledgeable and proactive about cosmeceutical products; they are no longer willing to take product manufacturers' word on efficacy; they want research. Cosmeceutical brands are considered leaders in advanced skin care since they tend to use the newest active ingredients and technologies, often backed by research from biochemists or medical professionals. Scientific and clinical expertise lends credibility.
At the 3rd Cosmeceutical Summit organized by Ringier Trade, Dr. Jason Gu from Unilever Research & Development Shanghai expressed his view on an ideal cosmeceuticai in "Application of Chinese Medicine in Cosmeceuticals." In his opinion, ideal TCM-based cosmeceuticai products should be "natural and safety assured, with perceivable and mild effects for consumers. (They should) prevent or deal with mild disorders, (contain) natural constituents (and offer) bioactivity."
Despite the main issues facing current TCM-based products, including soft claims, lack of scientific evidence and safety issues, TCM-based cosmetics still hold great potential, as they aim to treat the whole person via a holistic approach based on the complementary forces yin and yang, Dr. Gu pointed out.
Ally Dai is senior editor of Happi China, She has more than 10 years of experience in the cosmetics and food industries, Happi China is a leading media for the China household & personal care industry Pub seed by Ringier Trade Media in strategic editorial now partnership with HAPPI, it help local manufacturers update their knowledge on formulating, testing and packaging, as well as providing market insight.
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|Title Annotation:||Notes from China|
|Publication:||Household & Personal Products Industry|
|Date:||Mar 1, 2012|
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