[ECHEMI Focus] PCHI Series Interview- Victor from Globaldata

It is honored to have this conversation with Mr. Victor, Globaldata Greater China Consulting Director during this PCHI summit. Globaldata, as a comprehensive database established in 1999 covering multiple information such as drug research and development, trading, clinical, etc., provides a lot of valuable reference information for insiders.

Q: Before the start of this interview, can you give us a detailed introduction to Globaldata and the company? What new trends will this forum event bring?

A: GlobalData is an international consulting and data company listed in London, spanning multiple industries, and has many years of experience in beauty and cosmetics. Over the years, it has served many international companies to help them understand trends better. And industry trends. In the area of consumer surveys, GD is particularly strong, and spends a lot of energy on different consumer surveys every year. We all know that since it is a fast-moving consumer industry, an important part of the trend is consumer dynamics. Therefore, GD has basically been tracking consumer dynamics for many years and has an in-depth understanding. The new trends brought this time include those before and after the epidemic, as well as some trends that are gradually emerging or becoming more and more important, such as health, nature, and so on. Roughly speaking, look at these issues from two directions, from an industry perspective, and from a consumer perspective. Finally, the future direction will be used as a summary.

Q: We see that your topic this time is "Innovative Trends and Opportunities in the Asian Skin Market". Can you tell us here, what are the attractive trends in your opinion, and how can companies seize the opportunities?

A: The trends are probably: health, nature, social responsibility and ethical trends. After the epidemic, these trends have become more and more important, so basically we can seize these opportunities from several directions, starting from the three aspects of formula, packaging, and publicity, and sticking to these new trends, we can seize the opportunities. Of course, the trends of consumers must be kept abreast of.

Q: This time PCHI is a grand exchange event for China's personal care and cosmetics industry. As an industry expert, could you please analyze the advantages and disadvantages of my country's personal care and cosmetics in the international market?

A: The advantages of Chinese products over the Asia-Pacific region are:
Chinese beauty brands are struggling to overcome the trust issues and plagiarism accusations that have plagued c-beauty for years. More and more new-generation beauty brands challenge the "cheap and copy" tradition by providing value upgrades. Chinese beauty brands make full use of their potential and abandon previous practices. China has an incredible high-efficiency and low-cost manufacturing process. Therefore, beauty brands manufacture products at a relatively low cost compared to other countries in the Asia-Pacific region, and have improved production processes and Quality Standard. In addition, the change in Chinese aesthetic concepts and the acceleration of digitalization in the retail industry in the past few years have also made "c-beauty" the focus of attention.
However, Chinese products are not only high-quality and inexpensive, but also targeted to solve skin problems such as acne, acne, whitening or making eyes bigger. In addition, "natural" is still a must be used in Chinese beauty products, based on the application of local local ingredients in traditional Chinese medicine, which is fully in line with the trend of "inner beauty". In addition, relying on technological beauty solutions (based on ai skin analysis, blockchain introduces transparency), it is easy to get product feedback and reviews on social media, unisex product positioning, and fashionable packaging that attracts millennials, such as smaller The packaging, travel convenience, online beauty and KOL cooperation influence and resonate with Millennials and Generation Z, these are the advantages of beauty products.

The disadvantages of Chinese products relative to the Asia-Pacific region are:
Although cosmetics made in China are reasonably priced, their safety and effectiveness are still questionable. The short shelf life of products and the weak offline (store) market share are key pain points for Chinese beauty products. As we all know, Chinese consumers are active online shoppers, but in terms of cosmetics, the main sales channels are still physical stores, such as supermarkets, hypermarkets, department stores and specialty stores.
It is worth mentioning that the strict rules for testing cosmetics on animals have been opposed by animal rights activists. The European Union, the United Kingdom, India, Israel and Norway have banned the use of animals for cosmetic testing.
In addition, the issue of trust is not over in China. From counterfeit products to fake manufacturers providing fake certificates of authenticity, all sales channels seem to have been affected by these scandals.

Q: Under the influence of the epidemic, the global cosmetics supply chain is in a tight situation. How do you see the impact of the epidemic on the industry?

A: With the continuous evolution of digitalization’s damage to the retail industry, and the continued strain on global trade due to the huge negative impact of Covid-19, the global retail supply chain has become extremely complex.

Even before the implementation of lockdown measures and the global spread of Covid-19, one of the first impacts of Covid was that in the next few months, China’s manufacturing plants were closed and China’s severe chaos began to have a knock-on effect on global trade flows. . Other companies began to consider regrouping sales channels and turning to alternative solutions, usually more localized (or national) solutions for supply and contract manufacturing.

For example, in China, e-commerce giant JD.com made a US$100 million strategic investment in one of Asia’s oldest supply chain management companies, Li & Fung, to simplify the process and make it more demand-oriented. Customer-centric and automated on the basis of digitization.
The beauty industry is facing severe disruptions in the supply chain in China. For example, many cosmetics special shows and exhibitions have been postponed or cancelled. For example, due to the isolation of workers, the internal supply chains of beauty retailers such as Drunk Elephant, Supergoop and Ouai are facing interruptions and a trickle-down effect, leading to shortages and delays in product distribution.

Judging from the current overall situation in China, beauty brands have realized that an agile supply chain strategy will be applied to the cosmetics industry because it can actively respond to the changing cost structure between suppliers in different countries, as well as trade agreements and barriers. Risks within emerging countries.
However, China was affected by the epidemic at the beginning and returned to normal before the rest of the world. This is a temporary advantage because the rest of the world will return to Chinese suppliers because their operational supply chains have been significantly affected.

Q: Cosmetics has become a brand-driven, group-operated assembly line business. From raw materials, production, design to brand, each division of labor, but close cooperation. Raw materials are the power source of the cosmetics industry. Europe has been leading the development of the global cosmetics industry. Can you tell us about the latest developments in European cosmetic raw materials?

A: The European cosmetics industry's demand for natural ingredients is surging. There are many types of natural ingredients used in cosmetics, mainly bamboo, grapefruit, turmeric, mushrooms, shea butter, Coconut Oil, babassu oil, frankincense essential oil, patchouli essential oil and licorice extract.

With the plant-based trend, plant-based substances and their extracts, such as Aloe vera and licorice, are mainly used in cosmetics for functional and anti-aging properties to meet the needs of the aging population in Europe.

Due to fierce competition in the essential oil market in the European market, essential oil suppliers in developing countries are mainly concentrated on their own niche oils. For example, frankincense and patchouli have good potential in the European cosmetics market and are considered to be the most attractive ingredients for exporters of natural ingredients in developing countries.

Thanks Victor for the interpretation. Thank you for your wonderful answer. We are also very much looking forward to your speech at this summit, and wish you some gains while sharing dry goods for us during this PCHI. Finally, thank you again for accepting the interview in your busy schedule.