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Chinese Makeup Firms Start to Make Own Ingredients to Wean Themselves Off Imports
Liu Xiaoying
DATE:  Aug 01 2022
/ SOURCE:  Yicai
Chinese Makeup Firms Start to Make Own Ingredients to Wean Themselves Off Imports Chinese Makeup Firms Start to Make Own Ingredients to Wean Themselves Off Imports

(Yicai Global) Aug. 1 -- Some Chinese cosmetic companies have started to manufacture their own ingredients after excessive reliance on overseas supplies made them vulnerable to price increases and supply disruptions, Yicai Global learnt from industry professionals.

Raw material prices have been on the rise for the past two years, a person engaged in cosmetics research and development told Yicai Global. Swiss perfume giant Givaudan has hiked its prices three times so far this year. Germany’s BASF, South Korea’s LG Chem and other suppliers have also raised the price of polyurethane and acrylonitrile-butadiene-styrene several times.

Self-sufficiency in raw materials will help Chinese players in the beauty industry wean themselves off imports and break the monopoly of overseas suppliers, the person said. It will also make them more competitive by removing technical barriers.

"But the worst is when the raw materials are unavailable," a cosmetics R&D insider said. “We planned to purchase 100 tons of a certain material from Japan, but the supplier said he can only supply 20 tons. We know this is not about the money.”

"Rather, being a makeup firm whose annual sales can reach CNY10 billion (USD1.5 billion), you start to pose a threat to the competition. And they hope you don’t become bigger and stronger and further encroach on their market share,” the industrial insider added. 

Shanghai-based Jala Group has spent ten years developing its own skincare ingredient HiMurchaSin, to which it owns the intellectual properties, Zou Yue, general manager at the Shanghai-based firm's R&D center, told Yicai Global. Jala has spent CNY20 million (USD3 million) in the last three years on the product and the firm hopes it will become a best seller, just like Japanese SK-II's Pitera.

China has one of the most important makeup markets worldwide. It is set to reach CNY907.6 billion (USD134 billion) in value by 2025, a 50 percent jump from last year, according to Euromonitor statistics.

Editors: Liao Shumin, Kim Taylor

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Keywords:   Cosmetics,Skin Care,Raw Material,Research and Development