PCHi insight: Part One

Mibelle: "Consumers now believe 'Made In China' can represent high quality"

By Simon Pitman

- Last updated on GMT

Dr. Fred Zulli, managing director of Mibelle Biochemistry
Dr. Fred Zulli, managing director of Mibelle Biochemistry

Related tags Consumer China

Here, Cosmetics Design catches up with Dr. Fred Zulli, managing director of Mibelle Biochemistry, to find out how the Switzerland-based biotechnology ingredients provider is planning on increasing its footprint in the vast market. 

We sat down with Dr. Zulli at this year's PCHi event in Guangzhou, southern China, where he was overseeing a busy stand, but took the time to share his vision for the company's business in the country.

What is your strategy in China and where do you want to take the business?

We see that there is a continued increase in the cosmetics industry in China, which to some extent is now similar to the industry we have in Europe or the United States. Chinese manufacturers are starting to make high quality products and they are making them with active ingredients, which is what our business specialises in.

We also see that the formulators and chemists are getting quite a good knowledge about biochemistry. Particularly about how formula can work with the skin, which also helps to sell our ingredients. Of course there is still the problem of price, because the cost of the average ingredient from Europe is quite high for the China market, but manufacturers are starting to see beyond price.

And how long have you been present in China's market?

Seven or eight years. In that time, we have seen big changes with respect to the understanding of the products. Previously consumers were happy if the formulation did not fall apart.

Emulsifiers, thickeners and preservatives were pretty much the extent of the business. And now they want to differentiate their products from all the others. Right now it is very important that local players can sell their own domestically produced products at a reasonably high price.

Has there been a big evolution of the industry in the past ten years?

I think the big change is that in China ten years ago local companies would make a cream that would sell for a very low price, so there was no need for an active ingredient. That is all the consumer could afford.

And now it has come full circle because the consumer believes that Made In China can represent products of a very high quality so they are going to spend significant money on creams manufactured in China. All this means these companies can now afford high quality actives, which is where we step into the business arena.

Is your business growing here? And is it growing at a faster rate compared to other global markets where you are present?

We see a general good growth across the whole of Asia, including Indonesia, Korea, Malaysia and Thailand, as well as China. Compared to Europe, the market is growing quite quickly.

Are you seeing more competition from ingredients companies?

Yes. We are seeing a lot of competition. A lot of businesses trying to push themselves into this market and get a foot in the door because everyone believes this market holds so much potential for the future. Everyone is investing a lot. And in particular we are seeing a lot of investment from Korea.

Part Two of this interview will be published tomorrow and focuses on the type of ingredients companies in China are looking for and regulatory challenges.

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