How will cosmetics factories break out in 2022?

On May 20, Qingsong Co., Ltd. responded to the Shenzhen Stock Exchange’s inquiry letter, explaining that the revenue in 2021 will decline by 6.05% and the profit loss will be 54.9 million yuan. Qingsong Co., Ltd. said that the decline in North Bell’s performance last year was not only related to the company’s internal strategy of capacity expansion and employee expansion, but also affected by macro factors such as rising raw materials, the epidemic and industry regulation.

In fact, in addition to North Bell, under the background of the normalization of the epidemic, the overall consumer market is weak, involution is intensified, new industry regulations and regulatory superposition of raw material fluctuations have led to rising costs, and under multiple squeezes, cosmetics and daily chemical foundries are generally ” robbery”. 

“The current planning is to seek certainty in an uncertain environment.” Shi Xuedong, chairman of Guangzhou Tianxi Biotechnology Co., Ltd. (hereinafter referred to as “Tianxi International”), said in an interview with the “Cosmetics News” that today’s cosmetics Anxiety is pervasive in the industry. Uncertainty caused by various reasons makes many cosmetics companies face difficulties. For manufacturers, reducing costs and increasing efficiency, embracing new regulations, expanding business layout, and strengthening core barriers may be their way of fighting against uncertainty. to seek self-determination and an effective way to break through the situation.

01: Reduce cost and increase efficiency to solve cost pain points 

Since the second half of last year, a number of major chemical companies have successively issued letters of price increase for bulk raw materials, and the prices of various raw materials required for cosmetic production have continued to rise. “The main basic ingredients of cosmetic raw materials have all increased in price, such as moisturizers, glycerin, propylene glycol, and surface actives, and individual prices have increased by more than 80%.” The person in charge of a production enterprise in Zhongshan City told reporters that for a while, cosmetics production Businesses are under unprecedented cost pressure. 

In order to reduce the cost pressure, Shi Xuedong told reporters that Tianxi International has formulated a complete system for preparing raw materials to cope with the sharp fluctuations in the price of raw materials. Shi Xuedong introduced that in terms of commonly used raw materials, Tianxi International adopts the method of preparing materials in batches and preparing materials in off-season, and signs an annual procurement plan with cooperative raw material suppliers, and reduces the large amount of raw materials through batch shipment and batch settlement. Negative effects of volatility.

02: Embrace new regulations and strengthen core barriers 

In 2022, the transition period for many new cosmetic regulations is coming to an end, and the industry reshuffle is just around the corner. For the cosmetics manufacturers that bear the brunt, some people are still struggling with the new regulations, and some people choose to embrace the new regulations.

“Tianxi International’s embrace of the new regulations is not a slogan.” Shi Xuedong told reporters, taking the recent requirements for the person in charge of quality and safety as an example, “Tianxi International has established this position long before the relevant regulations were issued.”

In addition, Shi Xuedong believes that the new regulations on cosmetics will bring two changes to manufacturers in the short term, but product power is always the core barrier. First, companies with the production qualifications and strength of special efficacy products will have more potential, such as special whitening licenses becoming a scarce resource; secondly, under the pressure of efficacy evaluation, brand customers will tend to be cautious in developing new products in the future. Compared with the same product, there are many A super single product with various functions and compound formulas will become a fragrant pastry.

03: Expand the industrial chain and seek new increments 

The violent fluctuation of raw material prices and the various new requirements put forward by the new regulations also provide new ideas for cosmetics factories to extend their business layout.

“Nowadays, the new regulations require companies to provide complete formulas when filing cosmetics. In a sense, the formulas have become transparent and can no longer become a technical barrier for cosmetic companies,” Shi Xuedong believes that factors such as the epidemic and trade barriers have led to domestic production. When companies purchase imported raw materials, they are “stuck in the neck” by international cosmetic raw material giants. In addition, the new raw materials have changed from the approval system to the filing system, and the threshold for cosmetics companies to engage in new raw material research has been lowered. “In the future, it is raw materials that will really build a moat for cosmetic factories. “

“The raw materials that really belong to China will have broad prospects.” Shi Xuedong said, “If Chinese cosmetics want to rise, they cannot do without cosmetic raw materials with Chinese characteristics.”