(Yicai Global) Jan. 9 -- Many multinational cosmetic and skincare companies are ploughing more money into research and development in China as well as nurturing local talent as the value of the country’s cosmetics market looks set to surpass CNY500 billion (USD73.3 billion) this year.

The Chinese cosmetics sector will rebound now that the country has relaxed its pandemic prevention measures, and the size of the market should exceed CNY500 billion in 2023, according to a report by Hong Kong's iiMedia Research.

Despite a tough year last year, several cosmetics titans increased R&D investment in China with the aim of developing new products tailored to the local market. Many of these R&D hubs are only second in size to those in their home countries.

For instance, US makeup giant Estée Lauder Companies’ new R&D hub in Shanghai opened its doors at the end of last year. Covering 12,000 square meters, the center boasts advanced labs, shared working spaces, interactive testing devices, packaging and modeling studios as well as workshops for scale experiments. It is the New York-based firm’s biggest R&D hub outside the US.

Estée Lauder will strengthen its ties with Chinese consumers through this first-tier R&D center, President and Chief Executive Fabrizio Freda said earlier. The company will continue to expand its local team and cultivate a new generation of cosmetics scientists for both China and the globe, Chairman William Lauder said previously.

Partnering with Chinese firms and setting up investment companies is another way for multinations to gain better access to the Chinese market. For example, Shanghai Meicifang Investment, the first investment arm set up by French beauty firm L'Oréal in China, said in September that it will buy a minority stake in Chinese perfume brand “Documents”.

While Japanese cosmetics giant Shiseido’s CNY501 million (USD74 million) investment fund, its first in China, got off to a good start by taking part in a fundraiser in Trautec in August, injecting nearly CNY100 million into the Chinese recombinant collagen raw materials startup.

The growing importance of the Chinese market has made multinationals prefer local hires. Ma Xiaoyu became the first Chinese national to be appointed vice president of L'Oréal’s China business in July 2021. Ma, who used to be brand manager at France’s Lancôme, was also appointed general manager of the Paris-based firm’s department for high-end cosmetics.

Henkel is preparing to build a China-centered Asia-Pacific R&D facility in Shanghai which should be completed by next year, the German chemical and consumer goods company said at the China International Import Expo in November last year.

Editors: Tang Shihua, Kim Taylor