Overview of China cosmetics market and regulations

Amid the background of global economic tsunami, China’s consumer cosmetics market, which maintains rapid development, was undoubtedly an eye-catching bright spot at the show. On the first day of the show, a full-day Natural Beauty Workshop had been held and a seminar called “How to Enter the China Cosmetic Market” was given by Chan Chong-Kong, the representative of the Hong Kong Cosmetic Technical Resource Centre. The seminar outlined the general direction for entering into the Chinese cosmetics market and the regulatory framework of the cosmetics industry, which investors should become familiar with. At the beginning of his speech, Chan Chong-Kong asked a question which drew the whole audience’s attention: “What’s the reason for my company to enter the China cosmetic market? It is simple, because the China cosmetic market is in fast growth, rapid development and steady rise,” said Chan Chong-Kong, frankly.

Status of cosmetics end-products in the market

Chan Chong-Kong further explained the changes within the cosmetics industry in China over the past 20 years. Today, the cosmetics market in China has shifted from luxury products to necessities for people’s day-to-day lives. In 1982, the annual sales volume of China cosmetics was only RMB0.2 billion. However, in 2007 it has become RMB120 billion. Looking in detail, there was a significant spike in growth between 2000 and 2005, and after 2005 the sales volume still increased at a double digit rate each year (around 12%). In his speech, Chan Chong-Kong also mentioned that he believed China should be the main focus of the global cosmetics market because currently China is:
• The most populous nation in the world.
• The world’s third largest economic power.
• Under rapid growth among urban populations.
• Improving its people’s living standards so that the middle class with disposable income has increased in size.
• Undergoing a significant drop in tariff policy after accession to the WTO.