Cosmetics can become free of animal-tests, at least a little – Mark Schaub

 

Mark Schaub

Cosmetics sold in China require up to May 1, 2021, animal tests to prove they are safe for consumers. Since their users required cruel-free cosmetics, foreign manufacturers had a hard time selling cosmetics to Chinese consumers. But times are changing, although only a little, says China-lawyer Mark Schaub in the China Law Insight in a review of upcoming legal change.

Mark Schaub:

It is good news for animals. From May 1, 2021 international cosmetics companies can apply to sell ordinary cruelty-free cosmetics in mainland China through general import and general trade.

In a best case scenario this will open up the opportunity for distribution through physical stores or distributors (which despite the hype about online remains crucial in China). These cruelty-free brands will be able to be sold in physical stores in China after being registered/filed to NMPA and imported via general trade according to the Provisions.

Online sales will also change. At present cruelty free brands are effectively excluded from the mass online market (i.e. can only sell T-Mall Global rather than T-Mall). In our experience, consumer facing companies will sell far more on T-Mall than on T-Mall Global. Indeed international brands can establish their own shopping websites in China to sell products directly.

Another change may be in respect of the outsourcing of production to China. In recent years a number of international cosmetics brands transferred part of their manufacturing process to China in order to manufacture under a limited animal testing exemption which could be applied for in respect of domestically manufactured ordinary cosmetics. This change in regulation may make such practice less attractive.

Although Chinese cosmetics brands are becoming increasingly popular but the heritage of cosmetics can play an important role in the consumer’s relationship to a product. However, we anticipate that the roll out may be time-consuming and much will depend on the land of origin and the status of its negotiations with the Chinese authorities.

International cosmetics companies will embrace the ability to export cosmetics to China without animal testing. However, it is important to note that this loosening is coupled with increasingly strict regulations, introduction of a trusted manufacturer concept, improved health and safety standards and also an expanded role and potential liability for the domestic representative. Importing cruelty free will now be possible but it will be coupled with greater obligations and paperwork.

In addition, it should be noted that a crucial issue is that the recognition of the QMS is on a bilateral basis between China and the relevant manufacturing country. This may mean that brands may need to outsource manufacturing to countries that are recognized. This may be an issue for countries that are politically out of favor with China. Time will tell but it is likely that for international cosmetics companies will find that they will not need to test on animals for most products whether exported to China or domestically manufactured.

More in the China Law Insight.

Mark Schaub is a speaker at the China Speakers Bureau. Do you need him at your (online) meeting or conference? Do get in touch or fill in our speakers’ request form.

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Less red tape and more certainty for cosmetics manufacturers - Mark Schaub

Mark Schaub

China has adopted new regulations for cosmetics manufacturers allowing more access to the China market, although the changes are not only positive, writes China-lawyer Mark Schaub at the China Law Insight. 

Mark Schaub:

The cosmetics market in China is growing bigger each year. Data from China’s National Bureau of Statistics suggests total retail sales of cosmetics in China in 2019 exceeded RMB 299 billion and a year-on-year growth was almost 13%, which means that retail sales increased by approximately 40 billion over the year.[1] The size and growth of the Chinese cosmetics market has not gone unnoticed by the authorities. There is a significant increase in cosmetic product offerings and competition. To address issues such as product safety and quality, the PRC authorities finally passed new regulations to better regulate the cosmetics industry... 

The New Regulation is passed in a similar form to the Second Draft with minor changes. For overseas cosmetics manufacturers, the New Regulation provides more market access; less red tape and more certainty. On the negative side, the New Regulation will increase obligations and expands the types of measures the Chinese authorities can take. However, none of the measures are highly surprising and the triggers for taking action are also reasonable. Few international manufacturers are likely to be anxious about such measures. It would be wise for overseas manufacturers to monitor the implementation of the New Regulation as they will not bring just increased levels of responsibilities but very welcome market access and clarity.

More details at the China Law Insight.

Mark Schaub is a speaker at the China Speakers Bureau. Do you need him at your (online) meeting or conference? Do get in touch or fill in our speakers' request form. 

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China bans plastics from cosmetics - Mark Schaub

Mark Schaub

China has announced the ban on micro beads - solid plastic particles of less than five millimeter - in cosmetics by the end of 2020, writes China lawyer Mark Schaub at the China Law Insight. "The clock is ticking for cosmetics companies – domestic and international alike. Alternative ingredients need to be sourced quickly," says Mark Schaub.

Mark Schaub:

Few people will be opposed to the ban on microbeads. The regulation is welcome from a number of perspectives – it is good for the environment, it reflects concerns of consumers, it requires companies to be socially responsible and it is further evidence that China takes the environment seriously. 

However, the clock is ticking for cosmetics companies – domestic and international alike. Alternative ingredients need to be sourced quickly. Cosmetics companies will face constraints in possible cost factors but also due to the rigidity of the Chinese system for using new ingredients. Companies failing to take action quickly may find themselves locked out of the world’s largest market in the very near future.

More at the China Law Insight.

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China moves to kill animal cruelty in cosmetics tests - Mark Schaub

Mark Schaub

China forced global cosmetics brands to use animal tests before entering the market, but is now moving to fall in line with cruelty-free cosmetic tests, writes lawyer Mark Schaub at the China Law Insight. "For international cosmetic companies, this may make the Chinese market more attractive for cruelty-free brands. However, issues will still exist but the direction at least should be applauded," he says.

Mark Schaub:

This is the first time the Chinese authorities have explicitly on the record opened the door to excluding animal testing for imported cosmetics products across the country. 

This also further evidence a trend in that the Chinese authorities are s experiencing a strategic shift in regulatory thinking, moving from strict pre-entry control to a more balanced combination of pre-market regulation and active and on-going post-market supervision. 

For international cosmetic companies, this may make the Chinese market more attractive for cruelty free brands. However, issues will still exist but the direction at least should be applauded. 

For international cosmetic companies already in the China market or imminently entering then the Measures when implemented would allow for a weaning off Chinese partners in that their own representative office could serve as the domestic responsible person. 

However, existing players will likely need to negotiate the way to freedom or de-coupling from their Chinese partners as the Measures do hint at agreements being required for existing relationships. 

International cosmetic companies will likely cheer the NMPA’s quantitative grading system that will result in more attention being paid to untested, inexperienced or non-compliant manufacturers. Most international cosmetic companies will already meet the requirements under Chinese law.

More at the China Law Insight.

Mark Schaub is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more experts on branding issues at the China Speakers Bureau? Do check out this list.

Dilemmas of animal-testing for China cosmetics - Mark Schaub

Mark Schaub

Globally cosmetic companies have been phasing out animal testing, but in China authorities sometimes still require those tests. Lawyer  Mark Schaub looks at the dilemmas for international cosmetics, who face different requirements, and potential damage to their brand, at the China Law Insight.

Mark Schaub:

There is a clear trend in China away from animal testing. This is due mainly to changing sentiment on the part of Chinese consumers. Local authorities across China are developing cruelty-free programs to entice international brands into China. 

However, the system in China tends to allow authorities broad discretions. Accordingly, those awaiting a clear legal prohibition across the whole country may be waiting a long time. 

However, brands torn between revenue and conscience may consider whether cross border e-commerce or producing locally are possible solutions. Any brand with great ambitions for China will likely need to pursue domestic production. In addition, domestic production may allow brands to tweak products for Chinese consumer trends. The risk in this regard is that product localization may not receive a warm welcome from Chinese consumers. Many still have great enthusiasm for imported cosmetics. This is especially the case in respect of luxury or organic cosmetics brands.

More at the China Law Insight.

Mark Schaub is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more branding experts at the China Speakers Bureau? Do check out this list.  

New rules for China's cosmetics - Mark Schaub

Mark Schaub

China is overhauling its now 30-years old regulations for cosmetics, a fast-growing industry of now 260 billion Renminbi (euro 34 billion). The new rules remove some of the red tape, says lawyer Mark Schaub, but also gives the authorities more leverage over the industry, he writes at the China Law Insight.

Mark Schaub

The Regulations on Hygiene Supervision of Cosmetics (<化妆品卫生监督条例>) (“Current Regulation”)[2] are the most important and also primary regulation that currently governs the production of cosmetics and the operation of cosmetics companies in China. As the Current Regulation was passed a long time ago (actually when there was still a Soviet Union) and a lot has happened in China ever since, it is more and more obvious that the Current Regulation is too outdated to deal with new issues that continue to emerge in the cosmetics industry. 

The Chinese authorities have taken measures to improve the regulatory framework under the Current Regulation to meet changing needs of the market and also of an industry that has evolved towards increasing complexity but the time is nigh that the Current Regulation  is now ripe to bow out after almost thirty years since first being published. 

The much awaited second draft of Regulations on Supervision and Administration of Cosmetics (<化妆品监督管理条例 (草案)>) (“Second Draft”)[3] was circulated for comment amongst cosmetics industry associations and stakeholders back in August 2018. A final draft is anticipated to be issued in the near future and when this happens it will replace the Current Regulation... 

For overseas cosmetics manufacturers the Second Draft provides more market access; less red tape and more certainty. On the negative side the Second Draft will increase obligations and expands the types of measures the Chinese authorities can take. However, none of the measures are highly surprising and the triggers for taking action are also reasonable. Few international manufacturers are likely to be anxious about such measures. It would be wise for overseas manufacturers to monitor the progress of the new Chinese regulations on cosmetics as they will not bring just increased levels of responsibilities but very welcome market access and clarity.

More details at the China Law Insight.

Mark Schaub is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more political experts at the China Speakers Bureau? Do check out this list.

Cosmetic giants deal with pricing gap - Ben Cavender

Shaun Rein

One of the main reasons Chinese consumers buy themselves silly abroad - including Hong Kong - is the high difference in pricing of similar products in mainland China. Cosmetic giants Estee Lauder and AmorePacific have lower their prices up to 30 percent, as also the government is revamping its import fees. More will follow, tells retail analyst Ben Cavender to the South China Morning Post.

The South China Morning Post:

“These global cosmetics names are now narrowing the price gap between China and overseas, and we believe more are probably about to follow suit,” said Ben Cavender, director with the China Market Research Group. 

“The fact that western brands are becoming cheaper in the mainland may also discourage people from travelling to Hong Kong to make purchases,” he added. 

Imported cosmetics used to face tariffs of 84 per cent, reflecting both import and point of sales taxes. 

But the tariffs have now gone down to 29 per cent for most beauty products thanks to policies introduced in 2016 designed to boost domestic consumer spending... 

With incomes rising, Chinese shoppers have become one of the largest single markets for western consumer brands. 

Prior to the tariff reduction, the significant price premium on foreign goods in China saw many mainland consumers shop via cross-border online marketplaces or while travelling abroad. 

Analysts said that stiff competition from rival brands and a weakening yuan might take some of the sparkle off the Chinese market for international cosmetics groups in spite of the price cuts. 

Over the last two years, AmorePacific has pushed ahead with its strategy to make inroads into China, competing head to head with established international players such as Estee Lauder. 

“The market is competitive and the rise of South Korean brands are posing a challenge to the rest of the players in China,” said Cavender.

More in the South China Morning Post.

Ben Cavender is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers´request form.

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Rabbits Rejoice – End of PRC Animal Testing Requirements Nears – Mark Schaub

+Mark Schaub 

China is introducing new regulations that makes it possible to phase out animal testing for cosmetics. Shanghai-based lawyer Mark Schaub explains how NGO´s, international pressure and basic market forces have made it possible to give rabbits and mice a happier life, and consumers politically correct cosmetics.

Mark Schaub:

There is little that China’s big cities retail scene cannot offer the eager shopper – flagship stores, bright lights, big lines … However, the long term China expat will still often miss specific items – the lack of a Body Shop … the quirky soaps manufactured by Lush … 

The reason for that some brands are not to be found in China is that a number of cosmetics and body care companies have a corporate policy against animal testing. To date China has basically required that such products conduct animal testing as part of an overall consumer safety policy. This practice is now changing ... in part. 

Chinese rabbits and mice are set to rejoice due to the “Notice on the Adjustment of Cosmetics Registration and Filing Administration” (“Notice”) which was posted on the website of the China Food and Drug Administration (“CFDA”) on December 16, 2013. The Notice states that from July 2014 animal toxicological testing for “non-specialized cosmetics produced in China” will no longer be mandatory provided a risk assessment has been carried out. Chinese manufacturers of such non-specialized cosmetics will be able to evidence product safety by using existing data or European Union-validated non-animal tests and can avoid government conducted tests. 

The change had been expected as the CFDA had issued a proposal on its website in November 2013 regarding cosmetics registration and filing. After one month’s public consultation the proposal was considered as having been approved. 

Previously Chinese regulations had required all cosmetics to undergo a lengthy approval process known as "toxicological testing" which typically involved testing on animals such as rabbits, pigs and mice.Although the PRC regulations did not specify animal testing as a requirement of such toxicological testing in practice this was often the case. 

The ambit of toxicological testing was wide as the “Regulations Concerning Hygienic Supervision over Cosmetics” included "special cosmetics" as being products used for hair nourishment, hair-dying, hair perming, hair removal, deodorant, bleaching treatments and suntan lotion. “Non-specialized cosmetics” include general body care products such as, soap and general skin related products. 

In accordance with “Risk Assessment Guide on Possible Safety Risk Substances in Cosmetics” if the risk assessment can ensure consumer safety then such Non-Specialized cosmetics are no longer required to conduct toxicological testing. However, it should be noted that special cosmetics made in China and cosmetics produced outside of China regardless whether special or not will not fall under the new regulation. 

Why now? Undoubtedly efforts by PETA and the Humane Society were influential. In particular, PETA funded scientists to provide guidance to Chinese counterparts on alternative testing processes. However, in the end it may well be that the practice of testing cosmetics on animals is increasingly considered as being old fashioned and China wishes to follow international practices. In March 2013, European Union regulators announced a ban on the import and sale of cosmetics containing ingredients tested on animals and pledged to push other parts of the world, like China, to accept alternatives. This may also have played a role.

An extensive edition of this piece, with more technical details, will be published later at the King&Wood Mallesons website or can be send to you on request.

Mark Schaub is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers´request form.  

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Chinese men now "dressed to impress" - Shaun Rein

Shaun Rein by Fantake via Flickr

Women have been driving the Chinese consumer market for a long time, but now Chinese men are miving in and focusing more on skin care products and other cosmetics, tells Shaun Rein in this discussion on  CNBC. Not only foreign brands like L'Oreal, but also Chinese brands are doing good business.
"Men in China are more open-minded than those in the US," says Shaun Rein. "They now want to dress to impress." Where they US counterparts had the masculine, smoking, shooting cowboy as the image to refer too, Chinese men just do not want to look like their parents, the farmers of the past.
Rein expects the market for male cosmetics products to grow 25-30 percent in the next 3-5 years, although often the first purchase is still done by the wifes and girlfriends.

Commercial
Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference, do get in touch.

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