Korean Beauty Trends & Industry News: 23-08-09

US FDA Unveils New Guidelines Modernizing Cosmetic Regulations

Based on the introduction of the 'Modernization of Cosmetic Regulation Act (MoCRA)', a trend the Korean beauty industry is keenly observing, the US Food and Drug Administration (FDA) is set to launch an electronic submission portal for cosmetic facility registration and product listing in October 2023. These guidelines are applicable to 17 cosmetic categories, including makeup, nail polish, shaving creams, fragrances, cleansers, hair care, and moisturizers. All cosmetic manufacturing and processing facilities are mandated to submit details to the FDA.

[The complete list of cosmetics as defined by the FDA includes: infant products, bath products, eye cosmetics, children's eye cosmetics, fragrance products, non-dyed hair products, dyed hair products, makeup excluding eyes, children's makeup excluding eyes, manicure products, oral products, personal hygiene products, shaving products, skincare products, suntan products, tattoo products, and other items.]

Product listings must include the cosmetic's ingredients, manufacturing information, and brand name. Cosmetics classified as drugs under Chapter V of the FD&C Act are exempt from this listing. Small businesses with an average annual revenue under $1 million, adjusted for inflation, may be exempt from some requirements.

Companies and products active before December 29, 2022, need to register by December 29, 2023. Those active after this date must complete registration by February 27, 2024, and April 27, 2024, respectively. Updates should be made within 60 days of any changes, facility registrations biennially, and product listing updates annually.

According to FDA's Chief Scientist, Dr. Namandjé Bumpus, these measures bridge the gap between US consumer cosmetic usage patterns and FDA's regulatory capabilities. The FDA strongly encourages electronic submissions but is also considering paper submissions. John Kwon of MTOM Global plans to provide detailed information on the Korean Cosmetic Association's website.

Dr. Linda Katz of the FDA stated that the enhanced oversight of cosmetic safety aims to identify products causing adverse effects, recall inappropriate products, conduct product tests and supervisory programs, and identify products sold in violation of the law.

Furthermore, the FDA concluded its Voluntary Cosmetic Registration Program (VCRP) on March 27, 2023. Feedback on these draft guidelines will be accepted until September 7th.

Korean Cosmetic ODMs Flourishing in China & Japan: The New Wave of K-Beauty

Despite China's surge in patriotic consumption, Korean Cosmetic Original Design Manufacturers (ODM) are thriving. Amidst major cosmetic brand performance declines, ODMs and SME cosmetic brands showcase positive results, driving their stock prices upwards. Companies such as C&C International, Cosmekorea, Inglewood Lab, Korea Kolmar, and Cosmax, all ODMs, are especially under the spotlight.

In Japan, the demand for Korean cosmetics is also rising, with ODM firm Cosmax gaining significant attention. Cosmax has been continually supplying a variety of color cosmetics to the Japanese market, experiencing consistent sales growth. As a global supplier of K-Beauty products, Cosmax is expanding its clientele worldwide, strengthening collaborations with online and indie brands in countries like China and the US, and operating production factories in various nations.

A representative from Cosmax announced plans for continuous product innovations representing K-Beauty through strengthened research and development.

Rising Concerns Over Child Labor in the Cosmetic Industry

A report released by World Vision highlighting exploitation in cosmetic ingredient extraction and manufacturing processes has stirred concerns. The report indicates that approximately 30% of cosmetic ingredients are linked to complex mining and agricultural supply chains, with primary components like palm oil, cocoa, and vanilla. In these settings, many children often work under perilous conditions, earning less than $2 a day.

Rebekah Armstrong of World Vision New Zealand stresses the lack of transparency in the origin and extraction process of raw materials, leaving consumers unaware of whether they're purchasing products free from child labor or slavery. With the rise of the 'natural' beauty industry, there's a surge in demand for agricultural ingredients. The extraction process for many of these ingredients employs the "worst forms" of child labor.

Moreover, the New Zealand government recently introduced legislation concerning modern slavery, requiring companies to identify and publicly report slavery risks. Armstrong emphasized the inclusion of prompt submissions in this bill, detailing methods to minimize exploitation.

Globally, of the estimated 112 million children working in agriculture, 70% are considered child laborers. Many are working under dreadful conditions to extract ingredients for cosmetics, World Vision asserts.

In June 2023, World Vision New Zealand (WVNZ) released an open letter urging the government not to delay the modern slavery legislation. Armstrong believes this will ensure New Zealanders have confidence that their purchases are made without exploitation.