Recently Shanghai Jahwa, the largest local cosmetics enterprise has officially launched a cosmeceuticals brand “Yu Ze”, marking its entry into the medical cosmetics market. The chairman of Jahwa, Ge Wenyao, stated that brands like Avene, La Roche-Posay and Vichy occupy nearly 60% of the current cosmeceuticals market in China, making it a strategic area for Jahwa.

The name of the first product is translated to “Yu Ze moisturizer”, jointly developed by Jahwa and the Ruijin Hospital, a renowned general hospital in Shanghai, after 6 years of clinical testing and observation. With the launch of the new brand, Jahwa now owns more than 10 brands in total, including Liushen, Herborist, Maxam and Chinfie, forming an extended product line in each segment of the cosmetics market. The new brand is strategically positioned to fill the gap in cosmeceuticals field.

According to recent research studies, the cosmeceuticals market in China has a lot of potential for development. From the year 2004 to 2007, the sales volume of the Chinese cosmeceuticals market recorded an annual increase up to 10% to 20% and it has been estimated that the growth rate would remain at this level from 2008 to 2012. Also, cosmeceuticals already account for a large percent of cosmetics consumption in the Western and Japanese markets. In America, the sales volume of cosmeceuticals reaches more than 1 billion dollars with more than 30 million consumers. In Japan, there are 16,000 cosmeceuticals stores and cosmeceuticals products that account for 2/3 of the total revenues. Based on these statistics it looks like the Chinese domestic market is also set to be very lucrative and that Jahwa may be able to capitalize on the growing cosmeceuticals trend.

However, the future of the new brand “Yu Ze” seems uncertain. First of all, since the current cosmeceuticals market is led by three major brands Avene, La Roche-Posay and Vichy, as well as numerous brands from Japan, it is difficult for a new brand to challenge these leading competitors. Secondly, without previous experience in managing a cosmeceuticals brand, Jahwa needs to conduct market research and carefully develop their brand strategy to ensure its success.

At the beginning stages of branding, it is crucial to raise brand strength by increasing brand differentiation and relevance. For Jahwa, distinctive and differentiated product brands should be established and these products must also connect with consumer needs. Faced with both potential and competition, whether the local brand “Yu Ze” will survive and be accepted by consumers still remains a question. We hope Jahwa will not only strive to produce high quality products, but also take active steps to cultivate their cosmeceutical brand equity.