French cosmetics industry hopes for eased trade tensions with China amid Xi Jinping talks with Macron
06 May 2024 --- Chinese President Xi Jinping’s first French tour in five years has ignited discussions surrounding the future of trade relations between the two nations, particularly in light of stricter Chinese rules on French cosmetic products like lipstick and fragrances.
French beauty businesses hope ongoing talks between Xi Jinping and Emmanuel Macron will alleviate Chinese import regulations regarding the exchange of formulas and manufacturing knowledge.
Before this week’s meetings, President Macron indicated that cosmetics would be a talking point of “great attention” as French leadership aims to “find a solution that also protects the interests of our companies.”
Concerns surrounding intellectual property
French cosmetics exporters will be asked to share detailed information on their manufacturing processes with Beijing under a new rule set to come into force in May next year.
These companies will also be required to receive Chinese factory inspectors, which ignites fears that intellectual property will be more susceptible to breaches.
Talks between the two nations last year led to a plan that French authorities would be responsible for safety assessment measures of some exports without requiring additional Chinese inspections.
In this particular agreement, France’s consumer and anti-fraud watchdog (DGCCRF) would create a “white list” of French manufacturers whose products are greenlighted for safety as they make their way to China.
France may grant similar concessions to China in the screening of products bound for France.
Prior to this weeks meetings, President Macron anticipated cosmetics would be a key talking point
(Image credit: Ministry of Foreign Affairs of the People’s Republic of China).
France’s Federation of Beauty Enterprises (FEBEA) — whose members include L’Oreal, LVMH and Coty — has affirmed these plans could be formalized in talks this week, highlighted on Reuters.
“This reciprocity will assure the highest standards of safety to Chinese consumers,” comments Emmanuel Guichard, secretary general of FEBEA.
China’s cosmetics landscape
China carries a considerable market potential for French cosmetic brands and Chinese consumers looking for Western beauty solutions. Conversely, France is a widely untapped market for China, because Chinese local brands have lagged behind European, American, Japanese and Korean brands for many years as their home beauty market is being dominated by brands from these countries.
France is the world’s leading cosmetics exporter, shipping nearly €2 billion (US$2.15 billion) worth of makeup and skin care products to China last year, second in importance only to aerospace products, according to Reuters.
Cosmetics regulatory expert Biorius reveals China is the second-largest cosmetics market (US$13,566.8 million) after the US and is expected to grow annually by 11.2% (CAGR 2020 – 2023).
“This market is expected to be one of the fastest-growing and most promising markets in China in the coming years,” the company reports.
Biorius highlights that slightly less than three-quarters of the Chinese market’s cosmetics sales revenue comes from e-commerce.
More than a quarter of the beauty market comes from imported goods, with half coming from South Korea and Japan and a high level of interest for brands from the US, the UK and France.
Additionally, the most important sector in the Chinese cosmetics market is the skin care market, reaching almost 190 billion yuan (US$26.3 billion) in 2018.
By Benjamin Ferrer
