Ino­herb banks on TCM to give it the win­ning edge

China Daily European Weekly - - Business -

Shang­hai com­pany hopes re­brand­ing will help to ex­pand its skin care pres­ence abroad

0.8 per­cent.

“I think when we were on top, we were just too busy head­ing for­ward and ig­no­rant of the po­ten­tial road­blocks,” says CEO Yan Ming, look­ing back at the com­pany’s strug­gles over the past few years.

By re­brand­ing the brand as a “unique player that not only makes TCM-themed skin care prod­ucts, but also proves them to be sci­en­tif­i­cally ef­fec­tive”, Yan ex­pects Ino­herb to re­gain dou­ble-digit growth in 2018 and be­come one of the top three play­ers in five years.

“It is not only about in­clud­ing cer­tain types of herbs, but also about the pro­por­tion used and the recipes. With our ex­per­tise and part­ner­ship with the Shang­hai Uni­ver­sity of Tra­di­tional Chi­nese Medicine, we want to bring TCM-themed skin care prod­ucts to a new level, where the ef­fect can be seen, felt and eval­u­ated,” says Yan, who left the com­pany in 2014 to be­come an in­vestor in the beauty in­dus­try and re­turned to Ino­herb last year.

Around 30 new prod­ucts are ex­pected to be launched in 2018. The idea of in­cor­po­rat­ing Chi­nese herbs or TCM-in­spired ther­a­pies into beauty prod­ucts has been one of the most pop­u­lar trends in both the East and the West over the past few years.

In 2015, US cos­met­ics gi­ant Bobbi Brown launched a serum foun­da­tion for­mu­lated with cordy­ceps mush­room ex­tracts, which are be­lieved to have anti-aging prop­er­ties. The 30-mil­li­liter liq­uid cam­ou­flage, sold at $68, has since been one of the best­selling prod­ucts of the brand.

South Ko­rean premium skin care brand Sul­wha­soo has de­vel­oped most of its prod­ucts with in­gre­di­ents from Chi­nese herbs. Ac­cord­ing to the par­ent com­pany of the brand, Amorepa­cific Group, it had sales of more than $6.1 bil­lion in China in 2016, up by 18.3 per­cent year-on-year, with strong per­for­mance both on e-com­merce plat­forms and more than 100 sales points in depart­ment stores in the coun­try.

“The rise of do­mes­tic brands and skin care treat­ments tak­ing in­spi­ra­tion from TCM is a re­sult of bi­lat­eral ef­forts,” says Dong Shufen, sec­re­tary­gen­eral of the China As­so­ci­a­tion of Fra­grance Fla­vor and Cos­met­ics In­dus­tries.

“On the one hand, com­pa­nies are in­vest­ing more in in­no­va­tion and re­search and devel­op­ment in compe­ti­tion with their Western coun­ter­parts; on the other hand, con­sumers are no longer ob­sessed with any­thing that is tagged with for­eign la­bels and are more con­fi­dent in their own cul­ture,” she adds.

The as­so­ci­a­tion says the coun­try’s skin­care and cos­met­ics in­dus­try has grown from 170 bil­lion yuan in 2011 to more than 300 bil­lion yuan in 2017. The mar­ket share of do­mes­tic brands has risen from 12.8 per­cent in 2012 to 17.6 per­cent in 2016.

“The jump in share is par­tic­u­larly sig­nif­i­cant con­sid­er­ing the mar­ket is get­ting crowded, as more and more for­eign play­ers are tap­ping into the world’s fastest-grow­ing and sec­ond­largest mar­ket (af­ter the US),” says Dong.

But East­ern reme­dies haven’t been a guar­an­tee of com­mer­cial suc­cess.

Late in 2012, Es­tee Lauder Cos an­nounced that it was test­ing a new skin care brand called Osiao, which fea­tures a spe­cial­ized for­mula con­tain­ing Chi­nese plants such as gin­seng. The brand was sched­uled to be in­tro­duced on the Chi­nese main­land within 18 months af­ter trial sales in Hong Kong. But the brand, which sells a bot­tle of fa­cial serum for $211, has yet to de­but in main­land mar­kets.

Sim­i­larly, Proc­ter & Gam­ble Co in 2013 launched its first hy­brid East­meets-West beauty line, Ori­en­tal Ther­apy, to con­sol­i­date its lead­ing po­si­tion in China. But the line dis­ap­peared from the mar­ket within a year of its launch.

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