Labeling Cosmetics in China: New Regulatory Standards

China has released new cosmetic labeling regulations to combat misleading product information in the fast-growing industry.

On May 31, 2021, China’s National Medical Products Association (NMPA) released the Measures for the Administration of Cosmetic Labeling (the “Measures”), which describe how cosmetics companies should label their products.

The new labeling requirements follow a comprehensive series of new regulations governing the cosmetics industry in China, which took effect on January 1, 2021. The Measures act in accordance with this broader regulatory framework and will come into force on May 1, 2022. Cosmetics provided to consumers in the form of free trial, gift, and via coupons or vouchers that can be redeemed are also subject to the Measure.

China’s lucrative cosmetics industry hit RMB 340 billion (US$53 billion) in sales last year, and is set to become the world’s largest market in the coming years. This growth, however, has led to a number of cosmetics products featuring claims that may mislead consumers about their efficacy, contents, and health benefits.

Accordingly, the Measures establish clearer labeling requirements to ensure transparency about the products consumers purchase and use.

Chinese language brand labeling

Per Article 3, the Measures apply to words, symbols, numbers, patterns, and other markings on the packages of cosmetics products and their containers used to identify basic information and safety warnings.

Article 6 of the Measures stipulates that cosmetics must have labels using standard simplified Chinese characters. Labels may include other characters and symbols, but must have a corresponding explanation in Chinese characters.

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Likewise, if the Chinese label is affixed on top of another one, such as in a foreign language, the Chinese label must correspond to the original. The font size of the Chinese characters on the label must be at least as large as the font size of other characters, except for registered trademarks, which can be larger.

In terms of naming, Article 8 states that cosmetic product names generally consist of a brand name, a generic name, and an attribute name. Brand names cannot include references to effects or raw materials that the product does not actually possess; generic names must be accurate and can include raw materials (for example, daily face moisturizer); and attribute names should indicate the physical property or form of the product (for example, cream, powder, serum, etc.).

The Chinese name itself, according to Article 9, should be displayed in a prominent position, and should not include non-Chinese characters (except for registered trademarks), numbers, and symbols. Besides the Measure’s naming requirements, companies must abide by China’s broader company and brand naming regulations.

Substantive label content

Article 7 of the Measures lists 10 pieces of information that must be included on cosmetics labels. They are:

1. The product’s Chinese name and special cosmetics registration certificate number
2. The name and address of the registrant or filing person, or the name and address of the person responsible within China for a foreign company
3. The name and address of the manufacturer; cosmetics produced within China also require the manufacturer’s production license number
4. Product implementation number
5. Ingredients
6. Net content
7. Use period/expiry date
8. Usage instructions
9. Safety warnings
10. Other content as required by relevant laws, administrative regulations, and national standards

In addition, the packaging boxes must also display the Chinese name of the product and its expiry date.

The Measures also provide detailed guidance to the display of each items. For example, the ingredients shall be listed in descending order of their content unless the ingredient is of less than 0.1 percent (W/W) in the product formula. If the formula filling is made in the form of compound or mixed raw materials, the content of each component in the formula shall be taken as the basis for sorting the content of the components and judging whether it is trace component.

Misleading information

The Measures include a number of provisions to prevent companies from displaying misleading information.

Article 19 bars the use of the following features:

1. Medical terms, medical celebrities, or implication of medical effects
2. False, exaggerated, or misleading information
3. Trademarks, symbols, design features, etc. that imply medical effects
4. Terms not widely accepted by the scientific/medical community
5. Fabricated information or disparaging language about other products
6. Fictitious or unverifiable data, survey results, quotes, etc.
7. Implying another function by describing the function of raw materials used in the product
8. Labels, awards, certifications, etc. that have not been confirmed by industry authorities
9. The names and images of state and public institutions
10. Guarantees of safety and efficacy
11. Vulgar and/or superstitious content
12. Other content prohibited by relevant laws

Products that violate these and other requirements are liable to be punished, according to the Regulations on the Supervision and Administration of Cosmetics, which include fines of up to RMB 500,000 (US$78,140).

Cracking down on misleading products

China’s introduction of more stringent cosmetic labeling requirements reflects an effort to better regulate the industry. Further, the increasing penetration of e-commerce platforms has enabled the Chinese cosmetic market’s rapid growth, but also increased opportunities for third party sellers to sell poorly regulated products or those meant for overseas markets.

In extreme cases, consumers may inadvertently purchase counterfeit cosmetics. In 2017, for example, police in the city of Taizhou seized RMB 827 million (US$129 million) worth of counterfeit cosmetics with fake brand-name labels.

More commonly, however, third party sellers may advertise products on e-commerce platforms with misleading health or efficacy claims, or re-sell foreign products not properly imported into the country. Some producers may try to pass off medical products as cosmetics to avoid the former category’s more stringent regulatory requirements.

Besides labeling rules, China’s regulations for the cosmetics industry are particularly demanding by international standards, including controversial animal testing requirements. Foreign investors in the industry should therefore undertake a comprehensive regulatory review to ensure a seamless entry into the market.

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