Skin treatment products: On-trend releases spark industry's optimism

The growing trend for anti-aging, natural and organic skin care has helped the industry in China survive global economic challenges better than other export manufacturing sectors in the country.

The annual growth rate for skin care during the past few years ranged between 10 and 20 percent. The increase in foreign sales slowed to about 5 percent in 2008 and is not expected to grow at a faster rate this year.

The supplier base shrank by no more than 5 percent as well, as several small plants in Zhejiang and Guangdong provinces were forced to stop operations during the past year. At present, there are at least 1,000 makers in the line.

Even so, many companies remain optimistic about prospects for 2009 and throughout the coming year. This positive outlook stems from the growth they have achieved in developing skin care with anti-aging properties, or containing organic or natural formulations.

Because of the strides made in these lines, an increasing number of businesses have now gained the confidence to promote their own brands to major export destinations. They are now also developing formulations with new or additional functional properties for upcoming releases.

In fact, manufacturers continue to embark on ways to improve product development capability. Many of the tier 1 suppliers have now established domestic and overseas R&D centers or teamed up with local universities or medical institutes, or renowned international companies.

One of the country's largest skin care suppliers, Jiangsu Longliqi Group Co. Ltd, has been working with Tsinghua University and Jiangnan University in establishing in-house laboratories. Further, it has set up R&D centers in New York and Kobe.

LAF was also able to construct an R&D center in cooperation with Jiangnan University and major material providers Arch, IFF, Dow Corning and International Specialty Products. By doing so, the company has gained steady and convenient access to ingredients.

In addition, many businesses are exploring new markets such as Mexico, Brazil, India and Singapore. Models are tailored to suit the skin tone of consumers there and take into account local weather conditions that may affect efficacy.

Moreover, new suppliers continue to join the line, especially established pharmaceutical manufacturers. One of the oldest such companies in China, Guangzhou Chen Li Ji, recently launched facial skin care products that leverage traditional Chinese medicine. In business for more than 400 years, Guangzhou Chen Li Ji uses ginseng, ginkgo, ganoderma, avocado, beeswax, sea urchin, aloe, marigold and oat to lend moisturizing, acne-preventive or anti-aging functions to releases. The products target local and export markets.

Among the other entrants are publicly listed Beijing Tong Ren Tang, Ma Yinglong and Yunnan Baiyao.

The most upscale category in China's facial skin care range, anti-aging products account for no more than 20 percent of companies' output. This is because these products require more expensive ingredients and greater R&D investment. Most models are priced at least $15 each and some even exceed $50.

Anti-aging skin care usually has wrinkle-reducing, anti-oxidant, soothing, lifting and skin-repairing properties. It may take the form of a face mask, serum, gel, lotion or cream.

The latest releases incorporate pearl powder, ceramides, hyaluronic acid, safflower and ginseng. The first is said to aid in repairing damaged skin. Ceramides and hyaluronic acid hydrate and moisturize, while the last two are supposed to prevent wrinkles. Safflower can also treat spots on the skin.

But since free radicals are said to be the key factors behind aging and cellular damage, ingredients that can help fight their effects constitute the bulk of anti-aging skin care formulations.

CoQ10 is one of the most important anti-oxidants used in the line. It generally protects the cell membrane and adipose layer from damage caused by UV rays and free radicals.

Other anti-oxidants include ascorbyl glucoside, witch hazel, idebenone, polyphenols, and vitamins C and E. The last two are probably the most common anti-aging ingredients used in the latest releases.

Collagen is another important element. Accounting for 70 percent of the human skin, it helps prevent dryness, wrinkles and damage.

Apart from these key constituents, other ingredients are incorporated to enhance the anti-aging effect. Algae and himanthalia elongate extracts are said to improve metabolism. Sheep placenta can revitalize the skin, while the epidermal growth factor can repair damage. Acetyl hexapeptide-3 relaxes the skin muscles and reduces deep wrinkles and fine lines.

Although China skin care suppliers are embracing the trend for natural and organic products, many of them continue to incorporate synthetic ingredients in formulations.

The high cost of producing all-organic or all-natural skin care is the main deterrent. Such models are generally twice as expensive to manufacture than versions that only contain natural or organic substances.

Nonetheless, many companies are taking an effort to minimize the use of synthetic fragrances, additives, preservatives and mineral oil in releases. Some of them are also using degradable or recyclable packaging.

China's organic and natural skin care range comes in a variety of forms.

Cleansers are available in milk, foam or oil versions. The latest cleansing milk has a nonsoap-based formula that can help maintain the skin's natural pH level. It incorporates natural plant and fruit extracts that can cleanse, whiten, revitalize, soothe and refresh.

Cleansing oil is generally used for removing makeup and has versions for oily, dry and combination skin types. Most models contain jojoba and olive oil that can help moisturize the skin as well.

Toners are also made to match different skin types. Among the latest releases are oil-free variants with aloe vera extract.

Moisturizer comes with a range of features, including skin repairing, hydrating, anti-aging, nourishing, wrinkle-reducing, whitening and sun protection. The newest versions contain witch hazel, bearberry, orange tea tree oil, jojoba, geranium, grape seed, rose, morus tree extract, chamomile, coix seed, ginseng, olive leaf, or peony or coconut essences.

Cucumber or cherry essences are adopted as well for their nourishing and moisturizing properties. Apple extract is an anti-oxidant that whitens, moisturizes and unblocks the pores.

Other natural ingredients such as licorice or pearl powder are also available.

In addition, some high-end models have anti-acne or spot-removing functions.

Skin care manufacturers usually source natural ingredients from leading raw material providers. Generally compliant with various ISO standards, such suppliers submit safety data sheets along with each delivery certifying that the substances conform to international regulations such as FDA. Further, many of them are capable of providing the same level of quality for every batch, something that most of the smaller suppliers cannot achieve.

China's facial skin care range includes cleansers, toners and moisturizer in mask, serum, gel, lotion and cream forms.

In addition to the anti-aging, natural and organic lines, suppliers are offering models with UV-protective, moisturizing, anti-acne, spot-removing and hypoallergenic functions.

Facial masks are generally used to unblock the pores and are available in a variety of scents and colors. Natural fiber is being adopted for nonwoven fabric models to reduce the risk of irritation that versions made with synthetic variants pose.

Mud masks and products with exfoliating granules are also offered.

Sunscreen is a major line as well. The latest models provide protection from UVA and UVB rays, and some even have an SPF rating exceeding 100. Water-resistant and DEET-free versions are also available.

Natural plant extracts such as jojoba and almond oil, shea butter, aloe vera, and chamomile are adopted in the newest sun-protective skin care range.

Regardless of the type of product, low-end and midrange models dominate exports and are expected to continue doing so over the next few years.

Although not focusing on the high end, most companies source the majority of ingredients from the local offices or domestic agents of leading chemical suppliers such as Germany's BASF. Other substances are imported directly from the US, Germany, Japan, South Korea, France and Switzerland.

Tier 1 companies that have been given a platinum rating by BASF, including Jala, purchase the same ingredients acquired by major cosmetic brands such as Estee Lauder and Shiseido.

Jala, which has plans of moving upmarket, also signed an exclusive procurement agreement with BASF on a type of patented anti-aging ingredient.

In terms of containers and outer packaging, skin care products usually come in plastic or glass cylinders, or plastic tubes. Gift or novelty designs are available for higher-priced models.

There are at least 1,000 skin care manufacturers in China, approximately 30 percent of which have export capability. No more than 10 percent of the suppliers export directly, and the rest course outbound shipments through trading agents. The majority of businesses focus on skin care, although some operations have color cosmetics, hair and scalp treatments, body care, and slimming products as sidelines.

About two-thirds of exporters are private locally owned companies, and 30 percent have outside participation. The investors are mainly from the US, France, South Korea, Hong Kong and Taiwan. The rest are state-owned.

Small and midsize plants with less than 200 workers comprise at least 90 percent of the supplier base. Only the few big enterprises, usually foreign-owned, can produce upscale skin care in large quantities.

OEM and ODM orders constitute 90 percent of exports. Buyers generally specify the active ingredients, functions, type of container and outer packaging, and price point. The makers then work on the formulation and packaging design. Many suppliers have in-house brands but only the very large ones have been able to market them overseas. Some tier 1 businesses have even established warehouses, logistics centers and retail outlets in Russia, Poland, France, Germany and Greece.

A number of these enterprises follow GMP standards in refurbishing, building and operating factories. Their workshops typically have an epoxy resin floor, air shower room, stainless steel work desks, UV disinfection light tubes, and filter, water purification and air purification systems.

The manufacturing process starts with the inspection of incoming materials. Substances that pass QC are grouped depending on the formulation. After heating and melting, they are blended or mixed, homogenized and emulsified. Other ingredients such as fragrant oil are blended in once the mixture has cooled. This is then tested before being sent to the filling and packaging lines. Production is often automated using imported equipment.

R&D teams of tier 1 suppliers generally account for 5 to 10 percent of the total workforce. Most of these companies have in-house laboratories for testing and research. The teams are responsible for inspecting ingredients, mixture and samples for new products. In addition, they develop packaging designs and countersamples.

Such divisions are also able to concoct a new formulation in one to two months. Prior to approval, studies are conducted to ascertain the viability of the product. Intensive research is done to determine the active ingredients, before deciding on the form, fragrance, and physical and chemical properties.

The resulting formulation is then tried, evaluated and adjusted depending on the results.

Regardless of size and product focus, all skin care suppliers perform IQC, IPQC and FQC in-house. They are equipped with basic testing tools. Small and midsize manufacturers use locally made machines, while large companies have advancedequipment, most of which is imported.

The physical and chemical properties of each product are tested for photosensitization, accelerated stability, microbial resistance, heavy metal content, antiseptic effects, pH levels and the presence of active ingredients.

While most packaging QC tests are visual, some companies also inspect the functionality of the containers, including compatibility with the active ingredients, air-tightness and leakage.

This article "Skin treatment products: On-trend releases spark industry's optimism" is originally posted in Global Sources.

Hangzhou Mino Daily Chemicals Co. Ltd
Changshu longliqi group Co Ltd