whitening cosmetics
In recent years, whitening skincare products have gradually become a 'regular' item on consumers' shopping lists. For consumers in Asia, there has been an endless stream of publicity about whitening products or whitening cosmetics. Almost every cosmetic company launches whitening products in its product range, some focusing on removing spots or fading acne marks, while others start from the source to reduce melanin deposition, thereby enhancing skin clarity and improving uneven skin tones.
In today's era where information is more readily accessible, consumers' understanding of cosmetics and skincare products has deepened. They have gradually learned to choose suitable products based on their skin attributes and corresponding needs. For them, what really matters is the product itself, rather than some brand premiums or emotional stories. While becoming increasingly rational, consumers are also paying more attention to the specific ingredients contained in cosmetics.
With the further growth of social media, coupled with the impact of the COVID-19 pandemic, brands have continuously increased their attention to KOLs on various platforms. Many enterprises have realized that marketing through social media to acquire target user groups has become a trend, and more and more companies are beginning to shift their promotional resources towards social platforms.
At the same time, the consumer structure of the entire industry is also constantly changing. On one hand, this is reflected in the age structure of consumers, with more Generation Z becoming the main consumer group. On the other hand, in terms of gender structure, male-related products are gradually becoming a blue ocean in the industry.
01
The 'main force' in the cosmetics market
The overall economic development in China has driven the growth of the consumer market. With the continuous increase in China's GDP and per capita disposable income, it has developed from 75 trillion yuan in 2016 to 114 trillion yuan in 2021. China's per capita disposable income has increased from 23,821 yuan in 2017 to 35,128 yuan in 2021, which is faster than the growth rate of per capita GDP, indicating that the overall economic development in China is improving.
With the gradual increase in per capita disposable income, China's overall retail consumer market has also developed rapidly. According to statistics from the National Bureau of Statistics, in 2021, the total retail sales of consumer goods were 4408.23 billion yuan, a year-on-year increase of 12.5%. Among them, the total sales of cosmetics were 402.6 billion yuan, a year-on-year increase of 14.0% (retail sales of consumer goods above designated size). The average annual compound growth rate from 2016 to 2021 was about 11.10%.Combining the total retail sales of cosmetic categories over the past five years with the structure of residents' consumption expenditure in China for the corresponding years, the overall cosmetic market in China is still in a stage of stable and rapid development.
Source: National Bureau of Statistics
According to the classification published by the National Medical Products Administration, cosmetics can be mainly categorized by their use function, application area, and cosmetic formulation into two major categories: special-purpose cosmetics and non-special-purpose cosmetics (ordinary cosmetics). Non-special-purpose cosmetics can be further divided into cleansing cosmetics (such as facial cleansers, shampoos, shower gels, etc.), care cosmetics (such as toners, lotions, etc.), and beauty cosmetics (such as eyeshadow, rouge, lipstick, etc.).
According to the latest 'Cosmetic Classification Rules and Catalogue' issued by the National Medical Products Administration, cosmetics can also be divided into 28 different efficacy categories such as anti-acne whitening, sun protection, hair loss prevention, acne treatment, nourishment, repair, anti-wrinkle, firming, soothing, oil control, exfoliation, hair break prevention, dandruff removal, moisturization, and hair care.
For the overall cosmetics market, products for removing freckles and whitening are not unfamiliar, and they even appear frequently on various lists. The '2022 Beauty Trends Insights Report' released by Douyin E-commerce mentions that in 2021, the top ten most played beauty efficacy content on Douyin included sun protection, whitening, cleansing/blackheads, etc. At the same time, under the makeup category, consumers' demand for 'skin nourishment' under makeup has surged. They not only need makeup to achieve effects such as concealing flaws and holding color but also expect it to have more skincare benefits while nourishing the skin. The report also mentions that under the makeup category, among consumers' efficacy needs for facial makeup under foundation, 'whitening' has become the primary focus of product selection.
What corroborates this is the impressive performance on e-commerce platforms. Data shows that during the '618 E-commerce Shopping Festival' in 2022, the total sales of whitening products on the Tmall platform approached 2.7 billion yuan, with skincare categories accounting for nearly 80%; in 2022's Double Eleven, the beauty and skincare category ranked first on the Tmall and Taobao platforms with a GMV of 34.47 billion yuan. Although the pandemic has led consumers to be more cautious and conservative about non-essential beauty and skincare consumption, overall sales are still far ahead of other categories.
The main driving factors are inseparable from consumers' continuous refinement of their skincare needs and increasing emphasis on them. The overall skincare market size has rapidly climbed from 101.65 billion yuan in 2015 to nearly 200 billion yuan in 2021, and it is expected to exceed 250 billion yuan within the next five years, with an average annual compound growth rate of around 10%.
Looking at the overall skincare market, a general classification can be simplified into common cosmetics, functional cosmetics, and topical medication-based cosmetics. As shown in the figure below, each individual category corresponds to different characteristics and suitable skin types.
Source: Compiled by Frost & Sullivan
After the National Medical Products Administration issued the 'Regulations on the Supervision and Administration of Cosmetics' in 2020, the entire range of whitening skincare products underwent a major reshuffle. After the new regulations were released, whitening skincare products were officially classified as functional skincare products.
According to Frost & Sullivan research, the overall market size of functional skincare products in China has been growing continuously from 12.29 billion yuan in 2015 to 36.47 billion yuan in 2021. The slowdown in growth rate in 2020 was mainly due to the impact of the pandemic, but the pandemic further increased consumers' attention to their health, thereby driving the further development of the overall market. It is expected that the overall market size will continue to grow in 2022.
Source: Compiled by Frost & Sullivan
02
"Work with Certificates" whitening cosmetics
Looking at the development process of the overall cosmetics industry in China, the industry has benefited from the continuous switching of different distribution channels among products at the beginning, the constant renewal of domestic and foreign products, and the continuous innovation of marketing models. As a result, the industry has been able to develop continuously forward. After 2021, the entire industry began to focus on products themselves as its foothold and product strength as its driving force, further promoting the deepening of the industry as a whole. When an industry develops to a stage where consumer penetration is stable, it means that the industry has entered a relatively mature development phase.
The development process of the Chinese cosmetics industry
Source: Literature review and analysis by Frost & Sullivan
Relevant government departments are also making continuous efforts in this regard, formulating a series of relevant policies.
The earliest relevant policies for the cosmetics industry promulgated in China can be traced back to the 'Regulations on the Hygiene Supervision of Cosmetics' approved and issued by the State Council in September 1989. These regulations aimed to strengthen product supervision and quality control of cosmetics. The 'Work Specifications for Cosmetics Supervision Sampling' promulgated by the National Medical Products Administration in 2017, on the other hand, detail the responsibilities of various parties involved in sampling activities and the disclosure of relevant information, ensuring to a certain extent the safety of consumers' use.
Subsequently, in January 2018, the National Medical Products Administration successively issued two documents: 'Cosmetic Classification Specifications' (Draft for Comment) and 'Guiding Principles for the Evaluation of Cosmetic Claims' (Draft for Comment). Both documents clearly mention that, on the premise of ensuring product quality, a scientific and reasonable cosmetic classification method needs to be established to provide a basis for the standardized development and scientific supervision of the cosmetic industry. Specific claims for efficacy other than those that can be directly identified (such as beauty modification, cleansing, fragrance effects, etc.) should undergo corresponding evaluation, including but not limited to: sun protection, whitening and freckle removal, hair growth promotion, breast enhancement, bodybuilding, anti-wrinkle, acne treatment, oil control, dandruff removal, repair (more than 2 hours). These guiding principles are not only conducive to correcting some merchants' vague publicity towards consumers but also enable the claims for efficacy in the cosmetic industry to be more scientifically, truthfully, objectively, and accurately based, thereby promoting the healthy development of the entire industry.
Over time, after 2020, several important supporting regulations were successively issued and began to gradually enter the intensive implementation pilot phase in 2022. The China Food and Drug Administration has successively formulated policy documents such as 'Cosmetic Supervision and Sampling Inspection Work Specifications', 'Cosmetic Hygiene Supervision Regulations', and 'Cosmetic Risk Monitoring Work Procedures'. The issuance and implementation of this series of documents have assisted in constructing a new regulatory system for the entire cosmetic industry chain, setting higher requirements and more detailed standards for all parties involved in the industry chain, continuously strengthening market supervision and management of the cosmetics industry, and striving to make the entire market development more standardized and perfect.
*Indicates that the file is still in the draft stage.
Source: State Council, National Medical Products Administration, Frost & Sullivan
It is worth mentioning that since January 1, 2021, the State Council has issued the 'Regulations on the Supervision and Administration of Cosmetics' (State Decree No. 727). This regulation clearly states that new raw materials used in cosmetics are subject to hierarchical risk management. For specific types of new raw materials, such as those containing preservatives, sunscreens, coloring agents, hair dyes, or skin whitening and depigmentation functions, registration management is required. For other non-related types of new raw materials, filing management can be adopted. There have also been certain changes in the regulatory requirements after new raw materials are launched on the market. Not only do they need to submit information on the use and safety testing of new raw materials annually, but also during the three-year regulatory period, new raw materials that have been registered or filed still need to be managed under the new raw material regulations. After the regulatory period, they can be included in the list of used cosmetic raw materials (IECIC list).
In addition, the 'Regulations on the Supervision and Administration of Cosmetics' classify cosmetics into 'special cosmetics' and 'ordinary cosmetics', with Article 16 making corresponding provisions: 'Cosmetics used for hair dyeing, perming, freckle removal and whitening, sun protection, hair loss prevention, as well as those claiming new effects are considered special cosmetics. Cosmetics other than special cosmetics are ordinary cosmetics.' The corresponding provision in the old version of the regulations was Article 10, which referred to 'cosmetics for special purposes', namely: 'Cosmetics for special purposes refer to those used for hair growth, dyeing, perming, hair removal, breast enhancement, bodybuilding, deodorization, freckle removal, and sun protection.'
It can be seen that the 'Regulations on the Supervision and Administration of Cosmetics' have undergone changes in both name and scope of efficacy, removing 'hair growth, hair removal, beauty milk, bodybuilding, deodorization' and adding 'whitening, anti-hair loss'. After the release of these regulations, many cosmetics containing the ingredient phenethylisothiazole (377) were taken off the shelves because some manufacturers added the whitening ingredient phenethylisothiazole (377) to products registered as ordinary cosmetics. This ingredient was approved by the former State Food and Drug Administration in 2012 for cosmetic use with the sole purpose of 'whitening the skin by inhibiting tyrosinase activity and thus suppressing melanin formation'. However, some merchants on the market use phenethylisothiazole (377) in non-special/ordinary cosmetics, and they use 'brightening the complexion', 'counteracting dullness', 'whitening from within out' as promotional points to confuse consumers. This regulatory action better protects consumers' rights and interests.
Source: National Medical Products Administration
The overall market is undergoing continuous restructuring. On August 1, 2022, the China National Institutes for Food and Drug Control issued an announcement soliciting public opinions on the "Technical Guidelines for Special Cosmetics for Spot Removal and Whitening (Draft for Comment)". The guidelines made specific technical requirements regarding the basic information of spot removal and whitening special cosmetics, product names, product formulas and raw material usage, standards implemented by products, packaging labels, product inspection reports, and safety assessment materials. The guidelines clearly state that the spot removal and whitening effects of spot removal and whitening cosmetics should be relatively mild and should conform to the definition of cosmetics. They can regulate the production, transport, and metabolism of melanin in the skin through principles such as inhibiting tyrosinase activity, thereby achieving a certain spot removal and whitening effect. They must not be used for medical purposes and must not have a drastic or irreversible impact on human physiological functions.
After the release of the new regulations, there has been a significant impact on the registration of overall cosmetics. According to the delivery information published by the National Medical Products Administration, as of the end of May 2022, the number of submissions for general cosmetics filing decreased significantly compared to the same period last year. Although there were certain factors influenced by the pandemic in the first half of 2021, the overall number of filings could still reach about half of last year's level.
Additionally, the number of registrations for special cosmetics in 2022 decreased by more than 70% compared to the first half of 2021. The reasons behind this include not only the extended technical review cycle and reduced approval rate for special cosmetics due to the transition period under the new regulations, but also that some of the reasons may be due to the new regulations requiring registration applicants for special cosmetics to submit human efficacy test reports that meet the requirements. The stricter review requirements have prompted brands to slow down their pace and reduce the application speed. However, from the statistical data on special cosmetics registrations, it can be seen that the registration volume for whitening and spot-lightening products accounts for nearly 50%, still being a competitive area for cosmetic businesses.
Source: National Medical Products Administration and Frost & Sullivan compilation
Source: National Medical Products Administration, compiled by Frost & Sullivan
03
New trends in whitening cosmetics
From the perspective of the product side, the mechanism of action of whitening cosmetics on the market can basically correspond one-to-one with the process of melanin formation. They can be mainly divided into three parts: inhibiting the production of melanin by three enzymes and one substance, blocking the oxidation chain of melanin production, and metabolizing melanin. For example, the currently popular ingredient niacinamide can inhibit the production and deposition of melanin on the skin, thereby achieving the effect of whitening the skin.
Source: Compiled by Frost & Sullivan
According to the research report of Meili Xinggong Big Data, from market feedback, popular whitening cosmetics have good whitening effects, brighten skin, remove spots, are safe and non-irritating, and consumers are more sensitive to terms such as ingredient concentration and formula. In an environment where consumer perception is constantly evolving, among all whitening and spot-lightening ingredients filed for record, plant extracts account for as high as 45.7%.Demonstrating consumers' preference for mild ingredients.
Consumers' attention to ingredient concentration is also gradually increasing.A perception has been formed that good ingredients = good products. It has become clear that the pursuit of just whitening ingredients or concentrations alone is meaningless. It is unfair to reject all products containing preservatives or fragrances. Moreover, natural active ingredients are relatively unstable and prone to losing their activity when present alone. A certain safe dosage of stabilizer needs to be added to the product formula system to ensure its activity and achieve whitening effects.
The prices of popular whitening products show a trend towards parity.Approximately 48.1% of whitening products are priced below 200 yuan, while only about 3.0% have a unit price exceeding 2,000 yuan. Considering the changes in whitening product prices,It can be seen that consumers have a more pronounced demand for cost-effective whitening products.Under such trends, how brands can formulate different ingredients in whitening products to achieve the goals of low cost, high quality, and excellent skin feel has become an area worthy of development in the future.
The typical segmented market for overall whitening and spot-lightening products is dominated by Generation Z and urban white-collar workers as the main demographic groups.The Z generation has a larger proportion compared to urban white-collar workers, but based on their lifestyle habits, staying up late has become a norm for them. While staying up late for a moment can be enjoyable, continuous late nights can cause significant harm to the skin. The darkening of the skin caused by staying up late prompts the Z generation to turn their attention to whitening cosmetics. However, this group of consumers not only seeks efficacy but also the safety and health of the ingredients in whitening products. When choosing cosmetics, they pay more attention to the specific ingredients added to the products. Additionally, another distinct consumer characteristic of this group is their generally weak purchasing power and more segmented needs, such as some sensitive skin types still having a strong desire for whitening.
Source: Alibaba Big Database
In addition to this,The entire whitening cosmetics industry has also seen trends such as multi-scenario synergy effects and product category extension.In addition to using facial whitening cosmetics in their daily lives, consumers are paying more attention to overall body whitening, including products for the hands.
On the other hand, the target consumer group for overall whitening products has been further expanded. Men aged around 25 to 34 have gradually increased their awareness of related consumption, indicating an interest in whitening and spot-lightening products.Although the target group for overall functional skincare products is still predominantly women, there has been a varying degree of growth in the frequency and number of men using skincare products in recent years, which may become a new blue ocean market.
Whether it is industry attention or market data, the overall whitening cosmetic market has shown a good development momentum.As the industry becomes more standardized, the overall whitening cosmetics industry will face a tug-of-war. The fierce competition will lead to a reshuffle of the industry that is more beneficial to consumers and brands with strong product capabilities, thereby promoting the healthy development of the entire industry.
