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How to Successfully Import Cosmetics onto the Chinese Market

22 Aug 2013

Bio of Speaker

Dr Michael Chang, PhD in Chemistry, USTC R&D Department Manager Chemical Inspection and Regulation Service(CIRS) China 7 years chemical regulatory consultancy experience Safety assessment and registration of new substances and cosmetics in China; Managing a 18-staff team who are responsible for dossier preparation and communications with authorities.

Contents

Overview of the Chinese Cosmetics Market录内容1 1

2 Overview of the Chinese Cosmetics Regulations and Main Differences with EU Regulation

3 General Progress of Exporting Cosmetics to China目录内容4

4 Relevant Chinese Organizations & Resources

I. “Overview of the Chinese Cosmetics Market”

Import Cosmetics onto Chinese Market How

80%

20%

Annual growth rate greater than 16%

Foreign companies dominate market

Per capital spending is at a low level

The third-largest cosmetics market

General situation

2007 2008 2009 2010 2011 2012

134

110.3

88.9 74

59.7 48.8

Yearly growth (%) 2008 2009 2010 2011 2012

Cosmetics 22.1 16.9 16.6 18.7 17.0

Retail value of cosmetics by wholesale and retail enterprises

Source: National Bureau of Statistics of China (NBS) Unit: (billion RMB)

Fast growth

> 80% domestic companies

< 20% market share

In total: 3245

Guangdong Prov.: 1467

Zhejiang Prov.: 300

Jiangsu Prov.: 250

Shanghai: 225

Fujian Prov.: 101

…

Distribution of cosmetic companies in China(2010)

Great demand for imported cosmetics/Strong competition

2011

2013

2012 51.0 %

25.8 % Imported ordinary

use cosmetics Imported special

use cosmetics

2011 7145 1073

2012 11423 990

2013 (Jan to May)

5559 524

2012 (Jan. to May) 4381 528

No. of imported cosmetic products approved by CFDA(2011-2013)

+51.0 %

+25.8 %

II. “Overview of the Chinese Cosmetic Regulations and Main Differences

with EU Regulation”

Import Cosmetics onto Chinese Market How

Regulations on the Hygiene Supervision Over Cosmetics (Order.3 MOH)

Detailed Rules for the Implementation of the Regulation on the Hygiene Supervision over Cosmetics (Order.13 MOH)

Hygienic Standard for Cosmetics 2007 (MOH)

Regulations on the Management of Cosmetics Labels (Order.100 AQSIQ)

The Measures for the Administration of Hygiene License for Cosmetics (SFDA)

Guidelines for the Registration and Evaluation of New Cosmetic Ingredient (SFDA)

Major cosmetic regulations in China

Definition

Cosmetic product dossier

Nanomaterial and animal testing

Labelling requirements

Competent authorities

Obligations of responsible person

Comparison with EU COSMETICS REGULATION

(EC 1223/2009)

Ingredient requirements

D efinition EU: Cosmetic product means any substance or mixture intended to be placed in contact with the external parts of the human body or with with a view exclusively or mainly to cleaning them, perfuming them, changing their appearance, protecting them, keeping them in good condition or correcting body odours.

the teeth and the mucous membranes of the oral cavity

China: The teeth and the mucous membranes of the oral cavity are excluded.

Comparison with EU regulation: Definition

European parliament and the council

European Commission

Member States

SCCS

Annual report on animal testing and nanomatetials

Safety assessment

Notification

CFDA: Pre-market approval

CIQ: Manufacturing management

SAIC: Market surveillance

Comparison with EU regulation: Competent Authorities

Comparison with EU regulation: Obligations of Responsible Person

Responsible for product registration only Preparation of dossier Name will not appear on product label

Taking legal responsibility for product safety Keeping of cosmetic product dossier for inspection Name needs to appear on product label.

Comparison with EU regulation: Cosmetic Product Dossier

Product Information File Cosmetic Registration Dossier

Technical product description (including packaging and labeling information) Detailed product composition Single ingredients data, including information on additives and any relevant contaminants Manufacturing information (GMP) Product safety assessment (safety report) Product stability data and PAO justification Scientific claim support Post-marketing surveillance of health-related undesirable effects

Application form for license; Product formula(different from EU); Manufacturing process and diagram; Product quality standard; Testing report from a cosmetics testing institution approved by the CFDA and related materials; Product package (sales package & product label); Certified document for production and sales in the manufacturing country (region); Statement on related problems of ‘Mad Cow Disease’; Power of attorney in case of a responsible person; Safety assessment of risk substances; Evidence of use for some product types; Some other documents that may be helpful(GMP).

Comparison with EU regulation: Nano-materials and Animal Testing

Nano-material is not allowed in Children’s products; No other requirements on nano-materials; Animal test on finished cosmetics mandatory;

Assessment of nano-materials by SCCS; Special labeling requirements for nano-materials; Animal test on finished cosmetics is banned;

Seek a balance between EU animal ban and Chinese market? Customized product formula or name for China

Comparison with EU regulation: Labelling Requirements

Comparison with EU regulation: Ingredient Requirements

Pre-market approval required for NCI; Meet safety requirements and restriction conditions in hygienic standard for cosmetics(2007) – being revised;

Regular new cosmetic ingredients do not require official approval prior to use; Meet safety requirements and restriction conditions in COSMETICS REGULATION (EC 1223/2009)

New Cosmetic Ingredient(NCI): A cosmetic ingredient that is not listed on Inventory of Existing Cosmetic Ingredients in China (IECIC)

III. “General Progress of Exporting Cosmetics to China”

Import Cosmetics onto Chinese Market How

General Progress of Exporting Cosmetics to China

CIQ Inspection and Custom Clearance

Identifying Appropriate Distributors

CFDA Registration of Cosmetics in China

Ready to Sell in China Step 4

Step 3

Step 2

Step 1

Step 1: Identifying Appropriate Distributors

A good distributor is the one that should have close collaborations with the following sales channels.

- Department stores − Supermarkets/hypermarkets − Professional stores/Salons − Specialty stores − Internet retailing

Step 2 CFDA Registration of Cosmetics: Definition and

Required License

Type of Product Required CFDA License

Ordinary cosmetics Record-keeping Certificate

hair care, nail care, skin care, perfumes and make-up

Special use cosmetics

Hygiene License hair growth, hair dye, hair perm, depilation, breast shaping, fitness, deodorizing, anti-freckle and sun block

Foreign company needs to appoint a Chinese responsible agent

Right now all imported cosmetics are approved by CFDA in Beijing.

Appointing a Chinese responsible agent

Application of username and password to access CFDA’s online registration system

Gather relevant technical documents and review

formula and label

Sample testing in CFDA accredited lab

Preparing & submitting product dossier

Completeness Check by CFDA( 5 working days)

Technical review by CFDA (1~3 months) CFDA Issue approval license

Supply more information if required by CFDA

Step 2 CFDA Registration of Cosmetics: Procedure

~1 month

~2-7 months depending on product types

Step 2 CFDA Registration of Cosmetics: CFDA Reform

Item Old System New System

Name & Level SFDA, Semi-ministerial body

CFDA, Ministerial body

Imported ordinary use cosmetics

Approved by SFDA in Beijing

Approved by Food & Drug Administration Authority at Provincial Level

Production license for cosmetics & compulsory inspection

Authority: General Administration of Supervision, Inspection and Quarantine of the PRC (AQSIQ)

Authority: CFDA

* Principle of formula design and analysis report of product formula shall be provided when registering cosmetics for Children, pregnant and breast-feeding women.

Step 2 CFDA Registration of Cosmetics: Dossier Requirements

for Ordinary Use Cosmetics

Step 2 CFDA Registration of Cosmetics: Dossier Requirements

for Special Use Cosmetics

contents

Product name

Net content

Name of the manufacturer

Address of the manufacturer※

Hygiene license number or record-keeping certificate number※

Country of origin※

Name and address of importer / distributor※

Ingredient list

Date of manufacture and shelf life / batch code and expiration date

Warning statements ※

Instructions for use※

Note: for sun-block cosmetics, SPF value or UVA shall also be mentioned

※ For cosmetics with content less than 15g or 15ml, these label contents do not need to be put on the label. However, they shall be mentioned in a leaflet that comes with the cosmetics

Step 2 CFDA Registration of Cosmetics: Labelling

Requirements

①

②

② ①

③

③

④ ④

⑤

⑤

⑥

⑥

⑦

⑦

* 1EUR: 1RMB=8.2. The cost represents typical cost and it includes both testing and consultancy fee. The specific cost depends on product types.

Type of cosmetics Estimated cost (RMB per product*)

Estimated duration (months)

Imported ordinary cosmetics 12,000～18,000 6-8

Imported special use cosmetics 19,000～80,000 9-14

Step 2 CFDA Registration of Cosmetics: Estimated Cost and

Duration

Step 3 CIQ Inspection and Customs Clearance

CIQ mainly check labels CIQ random carry out heavy metal and micro-biological test for first import at ports; Your distributor or third party logistical provider do customs clearance

Step 3 CIQ Inspection and Customs Clearance: Required Documents

Record Keeping of Buyer/Agent

Record Keeping of products

Custom inspection Qualification certificate issue

Record number of company

issue

Record number of products

issue

IV. “Relevant Chinese Organizations & Resources”

Import Cosmetics onto Chinese Market How

http://www.sda.gov.cn/WS01/CL0001/

http://www.aqsiq.gov.cn/

http://wsb.moh.gov.cn/

http://www.zybh.gov.cn

http://www.cirs-group.com/

http://www.caffci.org/

Organizations

Summary

China is a big and very promising cosmetic market; There are many differences between China and EU’s

cosmetic regulations(animal test ban, etc); Pre-market approval of cosmetics in China can be

time-consuming compared to EU; Registration of imported ordinary cosmetics may

become easier due to CFDA reform;

Available Free Resources Upon Request

Ingredient List

Draft version of the 3 batches of IECIC 2012 (Inventory of Existing Cosmetic Ingredients in China) - EN IECIC(2003) - EN

Label

QB/T 1685-2006 GB 5296.3-2008 GB 23350-2009 In Chinese

Quality & Safety

Hygienic Standard for Cosmetics 2007 In Chinese

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