(Yicai Global) March 17 -- Harmay, a Chinese retailer of cosmetics samples by world-famous brands, has been fined CNY890,000 (USD140,180) by Shanghai’s market regulator for incomplete labeling on its makeup sample bottles.

Some items were missing from the Chinese labels of 24 types of makeup by four brands, including France’s Clarins, that Harmay sells in its brick-and-mortar shops, the regulator said, citing the results of on-site inspections. The list of cosmetic ingredients and production batch numbers were also not shown on some goods.

The fine, huge in the industry, shows that the makeup sample business is attracting the attention of regulators, industry insiders told Yicai Global.

Cosmetics samples are hugely popular, especially among young consumers, as they are a cheap way of trying out a wide range of products.

"A five milliliter sample of Giorgio Armani's liquid foundation only costs CNY99 (USD16) in Harmay’s stores, but a full 30 milliliter bottle would normally cost CNY950 (USD150),” one person wrote on social media.

There have been some doubts as to where the samples come from, as the amount being sold on the market seems in some cases to be more than that of the make-up itself, Bai Yunhu, founder of digital cosmetics platform 1meiji.com, told Yicai Global.

The samples Beijing-based Harmay sells mostly come from specialty stores and traders, co-founder Jason Ju said in response.

Despite such doubts, many international brands, such as France’s L'Oréal, have partnered with it. Recently, Baum, a niche skin-care brand from Japan’s Shiseido, picked Harmay as the channel to debut its makeup on Chinese market.

The firm, which runs 10 outlets in cities such as Beijing, Chongqing and Shanghai, raised almost USD200 million in a fundraising round in January in which big private equity firms such as the US’s General Atlantic and Asia-focused Hillhouse Investment took part.

Harmay has also recently begun to invest in makeup brands. It bought a brand created by a professional Hollywood make-up artist at the end of last year. It also owns a French natural plant skincare brand and Chinese skincare brand PMPM.

Harmay opened an online store on Alibaba Group Holding’s Taobao in 2008 and its first brick-and-mortar shop in Shanghai in 2017. By 2016 it had annual sales of over CNY100 million (USD15.7 million).

Editors: Liao Shumin, Kim Taylor