Overview on Cosmetics and Personal Care Industry : Hong Kong / Mainland

Albert Leung

Director, The Cosmetic & Perfumery Association of Hong Kong

Speaker Bio

• Albert, Leung Kwok-Pun

• Director, The Cosmetic & Perfumery Association of Hong Kong • Secretary General, Hong Kong Society of Cosmetic Chemists • Executive Director, Hong Kong Hair & Beauty Merchants

Association • Business Development Manager, Hong Kong Cosmetic Technical

Resources Centre • Visiting Lecturer, Hong Kong Polytechnic University • Programme Instructor, Diploma of Cosmetic studies and

Management, School of Continuing and Professional Studies, The Chinese University of Hong Kong

• Visiting Tutor, Cosmetic Science Course, Institute of Professional Education And Knowledge, VTC Group

• Member, Royal Society of Chemistry, UK • Columnist, HK Sister Beauty Pro Magazine

Content

• Brief Regulatory Framework for cosmetics products,

a comparison of Mainland and Hong Kong

• New Trend for Mainland cosmetic market: Cross Border E-tail

Definition of Cosmetic

• “Cosmetic Product” refers to daily chemical product, being rubbed, sprayed or other similar methods, to spread onto any part of the body surface (skin, hair, nails, lips, etc.), in order to achieve purposes of cleansing, eliminating bad odours, skin-care, beauty and modifying.

HK regulatory framework

• No pre-approval system for cosmetic products

• No permits required

• No mandatory testing

• Post marketing surveillance, by Customs and Consumer Council

• For manufacturing, factory license by TID is suggested but not mandatory.

HK regulatory framework

• Ordinance #456: CONSUMER GOODS SAFETY ORDINANCE

• to ensure consumer goods are safe and for incidental purposes.

• Ordinance #138: PHARMACY AND POISONS ORDINANCE

• To prohibit the use of any poisons or pharmaceutical-use substances in non-drug products

• Ordinance #362 Trade Descriptions Ordinance

• To prohibit false trade descriptions, false, misleading or incomplete information, false marks and misstatements

Mainland regulatory framework • Ordinance concerning hygiene supervision over

cosmetics

• Article 9: • Before a new ingredient is used to manufacture cosmetic

products, it must be approved by CFDA. New ingredient refers to natural or synthetic materials that is the first time being used to manufacture cosmetic products in China. CFDA approval is a must for using a New ingredient to manufacture cosmetic products.

Mainland regulatory framework • Ordinance concerning hygiene supervision over

cosmetics

• Article 15 • For the first importation of a cosmetic product, the importing unit

is required to submit the application with relevant information such as the product specifications, the quality standard, and methods of testing, production license issued by the official authority of the exporting country (or region) together with a sample to CFDA, to obtain approval

Mainland regulatory framework • Ordinance concerning hygiene supervision over

cosmetics

• Article 16 • All imported cosmetics should be inspected by Inspection

Authorities. Only those qualified cosmetics are allowed to be imported.

-1st1st 2nd 3rd 4th 5th 6th 7th 8th 9th 10th 11th 12th 13th

Appointing China Legal Representative

Document Consolidation

Prelimary Assessment (mainly

formulation and product packaging)

Missing Document Preparation

Product Testing

Document Notarization

application submitting to CFDA

CFDA evaluation

permit issued

Months after starting

1 Jan 2010

Permit received

Mainland regulatory framework • Non-special

cosmetics

• Hair care products

• Skin care products

• Colour cosmetics

• Nail care products

• Fragrances

• Special cosmetics:

• Spot-removing

• Sunscreen products

• Hair dye

• Hair perm

• Hair growth

• Hair removing

• Breast massage products

• Slimming products

• Deodorant

Number of Imported Cosmetic Permits Issued

Year Permit Issued (including General and Special-Use Cosmetics)

2008 4205

2009 13653

2010 8926

2011 8137

2012 13010

2013 17879

China FDA website

Mainland Trade Barriers

• For Foreign Cosmetic Suppliers

• Complicated permit application and related high cost

• Toxicological testing [Animal Test] is a must

• Cosmetic products, can not be offered as “organic” items

• Product claim “Organic” should be certified by representative certified team under the Ministry of Agriculture

• MOA have not yet put cosmetic into certified category list.

Cross Border E-tail

Cross Border O2O E-Trade

• HK is free trade zone.

• Mainland consumers purchasing cosmetic in HK is legal and no permit required

• Mainland consumers can purchase HK cosmetic online

• HK suppliers will provide additional courier service, to send the goods to consumers’ address.

under new policy, Cross-border purchasing would become workable for cosmetic

Cross Border O2O E-Trade

• "Online (Offshore) Purchasing + Offline Delivery" has become a new pattern of Chinese consumers

• Cross-border purchasing in some industries (clothing, shoes, snacks) increasing

• For industries with strict regulation (health supplements, milk powders, cosmetics), cross-border procurement become very popular, due to limited choice on the Mainland

• complicated permit procedure reduce product launching in market

Why HK

• Geographical Advantage

• Bilingual marketers, with deep understanding in Mainland Cosmetic Industry

• 1,890 import-export trade establishments

• 11,560 Employees in Dec 2013 (data from HKTDC Research Centre)

• Cosmoprof Asia: World second largest Beauty Expo

Thank you!