Fengxian to become research hub of domestic cosmetics industry 18

Fengxian district, a quiet suburban area in Shanghai that has for decades been ranked near the bottom among the city’s 16 districts, will be getting a makeover as authorities plan to turn it into the “Silicon Valley for China’s beauty industry”.

While southern Guangdong province has always been known to be China’s cosmetics hub — the region accounts for 70 percent of the market share in China — Gu Yi, deputy head of Fengxian district government, pointed out that Fengxian can stand out by being a vibrant research and total revenue of 70 biggest cosmetics companies in Fengxian development hub.

“If Guangdong is the factory for China’s cosmetics industry, we can be the laboratory. Most of the companies here develop and design their own products and we believe Chinese brands and companies can only compete with their Western competitors when they create their own products,” said Gu.

Covering 687 square kilometers, about half the size of New York City, Fengxian is already home to a number of big cosmetics companies such as Jala Group, Nu Skin and Pechoin.

Statistics from the municipal government show that 40 percent of the cosmetic products made in Shanghai come from Fengxian. In 2016, the 70 mid-to-large-scale cosmetics companies in Fengxian generated 18 billion yuan ($2.7 billion) in revenue, up 13.9 percent year-on-year.

Pechoin, a Shanghai cosmetics brand founded in 1931, moved to Fengxian in 2016 and is one of the district’s newest residents.

The company’s 300-million-yuan plant is equipped with 16 production lines and can manufacture 3 billion yuan worth of skincare products every year.

Though business was severely affected in the 1990s following the entry of foreign cosmetics giants such as L’Oreal and Estee Lauder, Pechoin bounced back into the fray by rolling out products made with Chinese medicinal herbs. The company said that they have been growing at an average rate of 30 percent over the past decade.

During this year’s Single’s Day shopping extravaganza, Pechoin retained its position as the bestselling brand in the skincare category, generating a sales record of 294 million yuan within 24 hours.