Navigating regulation and administration key to targeting China market

With markets either stagnant or in decline in Europe and North America, eyes are on developing markets such as China, where growth in the personal care segment has continued at breakneck speed.

Retail cosmetic sales grew at 16.9 per cent in China during the course of 2009, to CNY74.0bn ($10.8bn), according to the China Bureau of Statistics.

“China is the place everyone wants to get into right now and in Asia it is now the second biggest market after Japan,”​ Dr. Alain Khaiat, president, SEERS Consulting, told CosmeticsDesign-Europe.com in an exclusive interview..

Based in Singapore, where he heads up the Toiletry and Fragrance Association of Singapore, Dr. Khaiat has also positioned himself as a consultant for personal care manufacturers and ingredients providers wanting to break into the markets throughout Asia.

Breaking into China requires an agent​

“To start operating in the China market you are actually required by law to have an agent who will register your product for you. All of the paperwork is complicated and only in Chinese,”​ said Dr. Khaiat.

Right now growth in the all-Important skin care market in China is being driven by the area of skin whitening products. Not only is this the biggest category, but it also continues to be the fastest growing.

However, tapping into this category is also more complicated as the regulations governing it are designed to be tighter, ultimately to keep tabs on the aggressive active ingredients that are often used in these type of formulations.

Regulation procedures can take up to two years​

“For most cosmetic products, regulation takes about four months to complete, but for skin whitening products this usually takes about nine months,”​ said Dr. Khaiat.

“The regulation of ingredients Is even tighter and it can take up to two years to complete all the formalities, while at the end there is no guarantee of a positive outcome.”​

Opportunities in Asia are not just confined to China though. Japan still offers opportunities, despite being very crowded, while South Korea is still a booming market, which Dr. Khaiat describes as being ‘relatively easy to access’.

Likewise he also points to the fact that the market for cosmetics and personal care in India is fast growing, though still a long way behind development in China.

Definition, strategy, distribution, regulation, administration...​

“Targeting any new market you have to define that market, your strategy, how to distribute and how to meet local regulation framework. If all of this is clearly in place, the next step is to fulfill all the paperwork and necessary administration,”​ Dr. Khaiat said.

“A lot of companies leave the registration down to the distributor, but if the distributor does not do everything properly, it is the brand that is put at risk of being damaged.”​

Dr. Khaiat is due to give a presentation at the forthcoming in-cosmetics ​show in Paris, on Wednesday 14 April, 2010, entitled Asian Cosmetics Regulation Workshop.