The cosmetics market in China and NMPA regulations

The Chinese cosmetics market is the second largest in the world after that of the United States. By 2023, it was already worth over $70 billion, with a compound annual growth rate (CAGR) of over 10% over the past decade. This rapid growth is mainly fuelled by an increase in purchasing power and a growing interest in personal care among Chinese consumers.

Japan is the leading exporter of cosmetics to China in 2023, with a sales value of 11 billion USD. It is followed by South Korea (10.8 billion), France (9.6 billion) and the USA (4.6 billion). Italy, Spain and Germany share a further 2 billion USD.

		Here are the 10 families of cosmetics most exported to China in 2023, with sales values and the 3 main countries of origin.
Products by family		China import value	The 3 first exporting countries
1	Skin care	USD 8.7 billion	Japan, South Korea, France
2	Facial make-up	2.1 billion	France, USA, South Korea
3	Hair care	1.5 billion	Japan, South Korea, United States
4	Eye make-up	900 million	Japan, France, United States
5	Fragrances and Perfumes	800 million	France, Italy, Spain
6	Lip care products	720 million	France, South Korea, Japan
7	Nail care	610 million	United States, France, Japan
8	Bath products	500 million	United States, South Korea, Japan
9	Deodorants & antiperspirants	410 million	United States, France, Germany
10	Soins du corps	300 millions	France, United States, Japan
Source: statistics compiled by C.i. Process, based on figures obtained from Chinese customs, NMPA and the Ministry of Commerce.

 

Chinese consumers are looking for beauty products that meet not only their aesthetic needs, but also their overall well-being. Key trends include:

• Natural and organic products: there is strong demand for chemical-free cosmetics. In other words, made from natural and organic ingredients. Consumers are confronted with an environment rife with health scandals. They are therefore increasingly concerned about the composition and long-term effects of the products they use.

• Advanced skincare: anti-aging products, serums and high-tech creams are highly prized. Consumers prefer products with advanced formulations capable of treating specific problems such as acne, dehydration and pigmentation spots. This aspect goes beyond simple brand communication, and is discussed in the regulatory section of this article.

• Luxury cosmetics: with the rise of the middle class and affluent consumers, demand for high-end beauty products and luxury brands is growing rapidly. A historic gift market too.

• A highly diversified global offer: all the major international brands have been distributed since the early 2000s. These brands include Japanese and Korean brands, for example. These brands have a strong presence and communicate their ability to adapt to the needs of Asian skins. More recently, Chinese brands are showing up on this coveted market.

 

4. The influence of e-commerce on distribution

The NMPA becomes the regulatory and control authority for 3 categories of sensitive goods: cosmetics, medicines, pharmaceutical products and medical devices. It is a separate entity under the supervision of the SAMR (administration of supervision and market controls). The NMPA has 11 departments (registration, inspection, regulatory development) and oversees 31 provincial branches.

Following this reform, all foodstuffs, including alcohols remain under the direct control of the CFDA.

5.1. Regulatory prerogatives of the NMPA

• Drafting laws and regulations
• Issuing approvals for companies, their managers and products
• Supervision of approved companies, persons and products
• Organizing inspections and imposing penalties for serious infringement.
  
  

5.2. Market surveillance for sensitive products

The NMPA's surveillance mission applies to all companies established in China that import, distribute or produce locally these sensitive products. Compliance checks apply to all market players, i.e. Chinese-owned companies, sino-foreign joint ventures (JVs) and 100% foreign-owned companies.

In case products are non-compliant, the NMPA applies graduated sanctions. Warning, confiscation of stock, fines and penalties. In the most serious cases, this can go as far as suspension of activity and withdrawal of licenses. It is also important to consider the effects on the reputation (and corporate social credit) of the company. Competitors will disseminate information that has become public through carefully organized whistle-blowing campaigns.

 

5.3. Controls by Chinese customs and SAMR

The NMPA's supervisory authority, has powers of a fraud control authority. It carries out in-company inspections and product sampling. To illustrate, in April 2024, the DGCCRF published its top 10 results from the "iron fist" campaign carried out at the end of 2023 (link in Chinese). This publication describes the names of the offending companies, the reason(s) for the irregularity or illegal situation, and the penalties, fines and sanctions imposed. It includes cases of communication that exaggerates the effects of a product. In China, this is a serious form of misleading advertising. Or cases of distribution of products for which the distributor does not possess the appropriate qualifications or licenses. From November 2024, a new series of official measures will be implemented for future inspections.

Cosmetics imports stopped in customs In March 2024, Chinese customs also published on its official website cases of products (cosmetics and perishable products) whose importation had been stopped. Imported goods do not have the required certification, or import declarations are lengthy, products have ingredients that are not approved, etc. These publications are regular. They mention not only the names of the offending importers in China, but also the names of the brands concerned.

As a reminder, the Chinese authorities officially encourage consumers to lodge complaints and report situations where they witnesses fraud or are victims of abuse. Find out more about the risks of whistle-blowing in China.

 

The authorities indicate that an operator in these sectors must hold additional licenses or hygiene permits in order to operate. A compulsory registration procedure must be carried out with the NMPA in order to certify a product according to national guidelines. The process and specific formalities vary according to whether operators are local manufacturers, importers or retailers. They are a prerequisite for compliance and market authorization.

6.1. Evolving regulations for compliance

For this market, which has become strategic for international brands, there has been a standards program since 2018 that applies to beauty care products distributed in China. Since 2021, the legislation applies not only to imported goods, but also to those manufactured on Chinese soil. This new regulation for the control and supervision of skincare products is known as CSAR (Cosmetics Supervision & Administration Regulation).

Since May 2022, exporters who had previously filled in this information have had to transfer and complete their previous declarations on a new version of the online platform. Migration of previous declarations is not automatic, as they are often insufficient.

The demanding CSAR regulations also list authorized components. The requirements for approval and marketing authorization differ according to whether the product is intended for a specific or an ordinary use.

6.2. Beauty products fall into 2 main categories in China

Specific care and treatment products: those with an active effect. For example, hair growth or dyeing products, hair removal products, fitness products or breast shapers. This category also includes deodorants, serums for spot removal, skin whitening and sun protection creams. Preparations in this class are subject to a prior approval procedure for full registration.

Other general product categories: e.g. hair care, moisturizing creams, skin care, nail care, perfumes and make-up. The registration procedure for preparations falling within this list is simpler, based on a declaration followed by a series of tests. The formalities are nevertheless demanding in their precision and thoroughness. For a French brand, this applies in particular to the manufacturer's laboratory certificates, the GMP certificate to be provided by ANSM, FEBEA attestation, exporter's declarations, letter of appointment of responsible persons, Chinese agent responsible in China (DRA), etc.

6.3. Liability requirements and labeling rules

Frequently updated, the latest legislation came into force on May 1, 2024. Among the requirements is the full safety assessment of all ingredients used in a formula. Exporters continue to be required to take greater responsibility for the overall safety chain. Managers of foreign production sites must be designated.

Mandatory information on labels (in Chinese) includes: name and brand, approval number issued by the NMPA, contact details of the manufacturer in China (or importer of the brand), ingredients, weight, expiry date (DLU), instructions for use and safety warning on use.

 

6.4. Registration formalities and certificates or licenses to obtain

These vary according to the operator concerned, and the nature and declared functions of each product. Here are 5 examples of certificates or licenses to be obtained, depending on the case:

6.4.1 : approval and certificate for new products not yet distributed in China.

It is up to the foreign manufacturer or exporter to take these steps with the NMPA. The procedure takes place in 2 stages: meticulous registration with a view to opening an NMPA account, followed by tests to be carried out in China. A complete file must be prepared, including a very detailed presentation of the product, its composition and ingredients, its packaging and its brand name in Chinese. Certain documents must be notarized.

In China, a local agent must also be appointed and authorized. This is known as the DRA (Domestic Responsible Agent). He may be the importer or another entity. This is a matter for careful assessment and comparison. Companies with import trading subsidiaries in China prefer to retain this responsibility. In this way, they limit their dependence on an external partner. The formalities involved in changing the DRA can be quite complicated. Once the tests have been validated, a certificate of conformity is issued in the name of the custodian (exporter or manufacturer).

Example of an NMPA NMPA certificate of conformity for a beauty cream This illustration is an extract from the official version. It authorizes the marketing in China of a skin care cream manufactured in France. This certificate was issued by the NMPA on behalf of the French laboratory, the applicant for approval in China. It contains several pages.

6.4.2 : approval of new ingredients

In case a product already approved undergoes a change in formulation or ingredients. It is up to the foreign manufacturer or exporter to take these steps.

Please note: all the ingredients in a beauty care product must list the laboratory of origin in which they were manufactured. This detailed list, which breaks down the formulation, forms part of the file required for approval. The ingredients must already exist in China and be included in the list of authorized ingredients. Otherwise, each new ingredient must be approved first. The current list is an NMPA database called Inventory of existing cosmetic ingredients in China (or IECIC). It is regularly updated with new, approved ingredients. To date, there are over 8700 authorized ingredients, but 1300 remain prohibited. Each registration file requires verification for classification and approval.

6.4.3 : import license for beauty products with a specific effect. Or other care products depending on their degree of sensitivity or dangerousness.

 

6.4.4 : production license when formulated and manufactured in China. It is up to the manufacturer to apply for this license.

 

The products listed are non-exhaustive examples. New chinese standards and technical guidelines are regularly issued. In addition, new import inspection rules and procedures are applied by Chinese customs. The classification of each cosmetic product shall be meticulously conducted according to its particular nature and function, in order to confirm the qualification requirements in force.

• Preparation and follow-up of product approval files
• Regulatory watch, competitor and positioning reports
  
• Search for importers and distribution agents
• Registration and licensing of foreign-owned enterprises
• Assistance and negotiation support in the event of disputes and denunciations with the authorities
• Expertise in logistics solutions and distribution of regulated products
• Search for industrial sites for production and assembly
• Comparisons of investment advantages in Chinese industrial zones.
  
  

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