Compared with foreign big names, relying on the "cost-effective" advantage and the "equality" advantage of social media, as well as the upgrading of product research and development technology, domestic cosmetics are on the rise in recent years.

"Core competitiveness, I think it is foreign companies that are learning from domestic companies. Some top international brands are more likely to talk about formulas and brands, but when they arrive at home, their (market size) is declining." Recently, during the second China (Jinan) hyaluronic acid industry conference and China life and health industry science and technology innovation conference, Zhao Yan, chairman and President of Huaxi biology (688363.SH, stock price 58.31 yuan, market value 28.087 billion yuan), told media reporters including the daily economic news.

Zhao Yan, Chairman and President of Huaxi Biology Photo Source: Provided by Enterprises

Zhao Yan's above statement stems from the rapid development of domestic beauty makeup in 2023, creating new records for many brands.

Relevant data from the "2023 China Cosmetics Yearbook" released by the industry organization Green Eye Intelligence show that the overall scale of China's cosmetics industry in 2023 was 797.2 billion billion yuan, a year-on-year increase of 5.2. Among them, in 2023, sales of domestic cosmetics increased by 21.2 year-on-year, with a market share of 50.4, surpassing foreign cosmetics brands for the first time.

For domestic brands, this is undoubtedly a major turning point, and behind this is the upgrade and breakthrough of domestic beauty brands in product research and development technology.

It is worth noting that the challenges from the Chinese market have also caused many international cosmetics brands to re-examine their own business layout.

"The innovation of raw materials must be a core support. Without the innovation of raw materials, the innovation of products is a castle in the air." In Zhao Yan's view, in terms of raw materials, domestic enterprises have a first-mover advantage.

Of course, after having an advantage, how to maintain it is more critical. Zhao Yan, citing the example of Huaxi Biology at the helm, said, "My request to our team now is: you can't stop the competition, but you must lead. The competitors are always behind you, you have to be 5, 8, 10 years ahead of others, to layout new materials, so we have a map of new materials, according to this map we are steadily moving forward".

The "Daily Business News" reporter noted that Huaxi Bio is still the world's largest hyaluronic acid R & D, production and sales company, accounting for 44% of the global raw material market in 2021. With Huaxi Bio as the leader, Jinan, where it is located, has built the world's largest hyaluronic acid raw material production base, and the annual sales of hyaluronic acid account for more than 40% of the world's hyaluronic acid market share.

As an important raw material widely used in the field of cosmetics, Jinan has formed a hyaluronic acid industrial cluster, and continuously promotes industrial innovation, development and upgrading with scientific and technological innovation.

On June 2, Yan Jiangying, chairman of the China Fragrance, Fragrance and Cosmetics Industry Association, said that the "hyaluronic acid effect" has become an important symbol of Jinan and even China's hyaluronic acid industry. This effect stems from the long-term in-depth research and scientific research investment of hyaluronic acid raw materials by Huaxi biological and other enterprises, which not only made a significant breakthrough in scientific research, but also successfully broadened the application field and industrial boundary of hyaluronic acid, and occupied a leading position in the global market.