China-Israel Cosmetics Joint Statement Signed! Will Israel Become the Next Beauty Influencer on the Internet?

As the opening to the outside world gains greater momentum, the Chinese market has become a safe haven and a new high ground for global cosmetics - And this time, Israel plays the main role.

On the morning of December 8, 2020, Jiao Hong, Director of the National Medical Products Administration, and He Zewei, Israeli Ambassador to China, signed the Joint Statement of Intention between the National Medical Products Administration of the People's Republic of China and the National Ministry of Health of Israel on Cooperation in the Supervision of Drugs, Medical Devices and Cosmetics (hereinafter referred to as the Joint Statement) in Beijing, which aims to further promote the regulatory exchange and cooperation of drugs, medical devices and cosmetics between the two sides. 

Taking the signing of the Joint Statement as an opportunity, China and Israel will further strengthen cooperation in the supervision of drugs, medical devices and cosmetics. Will Israel’s beauty cosmetics, which has long been famous for the Dead Sea resources and ingredients, embrace exuberant development in China?

01

Will imports from niche countries become the next frontrunners?

In recent years, with the continuous opening to the outside world,, the cosmetics consumption of Chinese consumers has moved towards subdivided and high-end development with more and more "new, novel and special" cosmetics entering the market. In the meantime, a slew of import niche brands from countries with national and ethnic characteristics has emerged, directly increasing their export volume of cosmetics in China.

According to the data provided by the General Administration of Customs of China, the import volume of China's cosmetics industry increased year by year from 2014 to 2019. In 2019 China's import volume of beauty makeup and skin care products was 13.495 billion US dollars, up 36.02% year over year.

At the same time, the TOP5 beauty importers from January to May 2019 were Japan, South Korea, France and the United States, with the import volume of 9.982 billion yuan, 9.196 billion yuan, 8.729 billion yuan and 4.608 billion yuan, respectively.

France, the world's largest exporter of cosmetics, has a century of commercial experience in cosmetics, essence and perfume, and was China's largest importer of cosmetics until the "resurgence” of South Korea's cosmetics in 2017. With the help of the “Korean wave” trend, South Korea's cosmetics featuring luxuriant marketing, novel products and fast iteration, surpassed competitors in Japan, France and the United States in 2017 and 2018 to become the largest exporter of cosmetics to China. Japanese cosmetics, on the other hand, have always been recognized by Chinese consumers for their high-tech quality due to Japan’s first-mover advantage in entering China. In 2019 Japan's export of cosmetics toppled its rivals and became China's number one importer of cosmetics.

In recent years Spanish Ampoule that delivers effective results has directly created the mania for Spanish beauty makeup, and cost-effective makeup and facial masks have made Thailand a favorable source for beauty makeup import. Israel today may also be the next cosmetics influencer on the Internet.

At present, China is Israel’s largest trading partner in Asia and third largest trading partner in the world. In 2017 the bilateral trade volume reached 13.121 billion US dollars, up 15.6% year over year. China is also Israel's largest export destination in Asia, accounting for 37.5% of its total annual exports to Asia. According to the WeChat official account "Knowing Israel Culture", the market of Israel's cosmetics industry is currently close to 9 billion US dollars.

What is Israel's advantage over these major cosmetics countries that have a first-mover advantage and have already procured market share in China? 

02

Biomedical power + unique Dead Sea resources

Israel's beauty makeup products and technology are blessed with obvious late-mover advantages

As a developed capitalist country, Israel's greatest advantage in the field of cosmetics lies in its highly developed scientific and technological strength and its unique and affluent natural resources.

In the field of science and technology, Israel is a world leader in biomedicine, medical devices and other fields, and is home to scores of world-renowned pharmaceutical giants such as Rewalk, Teva, Oramed, Cnoga and Medigus. In March 2017, China and Israel jointly announced the establishment of an innovative and comprehensive partnership, identifying health care as one of the key areas of cooperation between the two countries.

Israel is also the first country to apply industrial laser to medical cosmetology. Thanks to its technological experience in optics, laser technology and radio frequency technology, Israel has developed a strong subdivision field in cosmetology - cosmetic instruments.

From TriPollar, an established "Internet Influencer" cosmetic instrument, to NEWA recommended by hordes of stars such as Ouyang Nana, there are a number of Israel beauty instruments recognized by Chinese consumers. On Xiaohongshu searching results of ‘Israel” such as “cosmetic instrument”, “frequent shooting” and “Fayton” are most associated with Israel’s beauty products recognized by Chinese consumers. 

According to cnr.cn, many Israel beauty companies participated in the exhibition in the 3rd China International Import Expo in November of this year. They exhibited various brands such as INDIVIDUEL, a professional home use cosmetic instrument which is comparable to what high-end beauty salons use, and ARAGAN OIL featuring 100% pure natural Argan extract.

As for resources, Israel is bordered by the Mediterranean Sea in the west and the desert in the east. It is rich in plant and herbal resources. Perhaps most importantly, Israel is close to the Dead Sea. The Dead Sea is located at the lowest point of the earth (410 meters below sea level). It is the largest natural mineral resource bank on the earth and is also a famous beauty and rehabilitation place in the world. 

Just as Provence is to Osudan, Lake Biwa’s water is to SK-II, Himalayas is to CHANDO ,a unique landmark can create a memory point for a brand and deeply integrate product quality, impression and region. Therefore, mud and salt from the Dead Sea, as a unique natural resource in the world, endows Israel's skin care products with the natural concept of healing, repairing and cleaning.

On top of that, Israel has produced a large number of excellent natural skin care products.

03

As AHAVA takes the lead, what else is there in Israeli cosmetics? 

When it comes to Israeli skin care products, Chinese consumers are most familiar with AHAVA, Israel's top Dead Sea mineral skin care brand. 

In 2016 Fosun Group acquired AHAVA for 500 million yuan. In the first half of 2020, Yuyuan Inc. completed its acquisition of Fosun Jinmei. As a treasure beauty brand that has obtained permission from the Israeli government to develop Dead Sea resources, AHAVA's global sales have been increasing at a rate of 15% per year since entering China. In 2020 the brand announced Summer JikeJunyi as its first brand spokesperson. Over 16000 24K GOLD masks were sold out in Li Jiaqi's livestreaming, and the daily sales in its official flagship store exceeded 9.15 million yuan. Riding this momentum, AHAVA witnessed its first 10 million-level product, AHAVA Purifying Mud Mask, in 618 shopping festival.

In addition to AHAVA, there are many Israeli beauty makeup products featuring Dead Sea minerals, such as Canaan which entered the Chinese market in 2015, and Sabon, an Israeli washing and personal care brand famous for Dead Sea Salt Body Scrub.

Because of its proximity to the Mediterranean Sea, Israel can not only use Dead Sea mud as raw material, but also create Israeli brands with fragrance and herbs due to abundant plant resources. 

Representatives include Laline, an Israeli brand that has opened 130 boutiques around the world and is famous for its fragrance. Laline has put forward 9 fragrance concepts combining the fragrance of Provence with the efficacy of the Dead Sea. Other representatives include Aqua Mineral, a luxury beauty brand whose facial mask shown by Fan Bingbing; and natural brand Gamila Secret dedicated to herbs.

It can be expected that taking the signing of the Joint Statement as an opportunity, China and Israel will further strengthen cooperation in the supervision of drugs, medical devices and cosmetics. Israeli cosmetics may be the next new opportunity for Chinese consumers.