Will China Become Hooked On CBD Beauty Products?

The CBD (Cannabidiol) beauty trend has yet to reach its full potential in China, which is now home to the world’s second-largest beauty market after the US. Following the legalization of cannabis in North America and Europe, CBD-infused skincare has steadily become a global beauty trend over the past few years. Touted for its anti-inflammatory and immunity-restorative properties, Cannabidiol is now a star ingredient of the broader wellness beauty movement. CBD’s rising popularity in the West has not missed the attention of trend-savvy Chinese consumers. On social media, CBD product shopping hauls are becoming a content staple for beauty and fashion bloggers. Off social media, daigous (China’s overseas personal shoppers) have been actively sourcing favored CBD beauty products to resell to homeland consumers who identify as sophisticated, international, and cosmopolitan. Ever since China legalized the use of hemp leaf extract (containing CBD ingredients) in a 2015 cosmetics security law, the CBD beauty trend has flourished among the nation’s young consumer class. In 2019, there were 433 requests submitted to the China Food and Drug Administration to use Cannabis Sativa leaf extract as a product ingredient. In 2020, that number rose to 880. In February, China’s livestreaming super host Viya promoted a CBD facial mask from the C-beauty label One Leaf during a sales session and repeatedly clarified that the ingredient had nothing to do with its addictive cannabis relative, THC (Tetrahydrocannabinol). Consequently, more than 25,000 facial masks sold out overnight. Local DTC brand Simpcare was the first to launch a whole line of CBD-infused skincare products in 2019, further positioning the plant as an herbal, natural product. Another DTC label called 2XY tried to capture the attention of gender-fluid Gen Zers by launching gender-neutral, CBD-inspired skincare products. While China has historically taken a tough stance against anything drug-related, these brands have made CBD products more relatable to the local audience. The sheer scale of China’s eligible consumers, combined with a fast-growing interest in lifestyle upgrades, has made the market a hotspot for the global CBD industry. “CBD is a trend that has been accelerating globally, and it’s just starting to reach China,” said Brian Sheng, the CEO of Asia Horizon, a distribution company for Western-branded cannabinoid consumer products in China. “With changes in government regulations, such as the recent changes at the UN level regarding the categorization of cannabis, China represents an extremely promising market for CBD beauty.” According to a report co-produced by Asia Horizon and the research firm The Arcview Group, CBD’s current situation in China resembles the early years of cannabis legalization in North America, starting around 2013. While the psychoactive substance of marijuana, known as THC, remains strictly prohibited in China, the global CBD industry’s rapid growth has prompted the Chinese government to adopt a legal framework to allow the domestic production — and specific forms of consumption — of non-psychoactive cannabinoids. In China’s overcrowded, hypercompetitive beauty market, CBD has become a symbol of excitement and new growth. “China’s e-commerce industry is still growing, but the pace of its growth is starting to slow,” Sheng added. “Entrenched players such as Alibaba’s Tmall are looking for new categories to find growth. CBD beauty may just become the next category poised for ignition.” An emerging cohort of local CBD beauty brands corroborates his views on the category’s untapped potential. Simpcare, a major local CBD player founded in 2019, has now succeeded in raising millions of dollars and has grown into one of the most hyped e-commerce beauty brands. In an interview with Jing Daily, Simpcare’s COO and co-founder, Simon Lan, said that the founding team had spotted a market gap after extensive research on CBD beauty industries around the globe. “Many Western branded CBD products are oil-based, [but] Chinese consumers usually prefer a lighter texture,” Lan stated. “After lots of research and consumer studies, we created a formula tailored to the market — a product line with active, water-based CBD ingredients and better value for money.” 2XY, a label specializing in gender-neutral and sustainable skincare, is another star of China’s emerging CBD beauty scene. The brand’s co-founder Jingyi Liang believes that although the growing CBD hype in China currently comes from its international fame, the ingredient’s substance will win over consumers in the long run. “CBD is not a marketing gimmick,” Liang said. “Its soothing, anti-inflammatory effects have real results, and we believe that such an ingredient will be well received in the market.” Marketing this progressive CBD beauty trend, however, is not without severe challenges in China. Although CBD has been legally allowed in skincare since 2015, cannabis-based products are far from reaching mainstream acceptability. A public stigma that equates cannabis with heavy drugs and criminality persists, and marijuana remains strictly regulated in China. The penalty for getting caught possessing marijuana involves 10 to 15 days of detention and a 145 fine. Even mentions of the words “cannabis” or “marijuana” are often banned on Chinese social media. When wrestling with China’s hard stance on drugs, brands must exercise caution and patience with their digital communications. “From Alibaba and Bilibili to Little Red Book, every platform has its own sensitivity level on this topic,” said Lan. “We needed to reach out to each of them to understand their standard.” Positions of authority, safety, and education are crucial in CBD beauty marketing. Liang aims to use communication to break the stigma surrounding cannabis. “Through the endorsement of medical authorities, we educate consumers about the difference between industrial hemp and the marijuana drug, reassuring them that cannabis leaf extract is not hallucinogenic nor toxic,” Liang said. With wellness at the top of consumers’ minds in a post-COVID world, CBD beauty’s growth pace is likely to accelerate in China. And as more Chinese consumers look to beauty for healing, soothing, and immunity-restoring properties, the five-fingered plant is clearly hitting a sweet spot.

Sectors

Insights

Company

Will China Become Hooked On CBD Beauty Products?