China Strengthens the Supervision of Cosmetics Online Operation in 2023

 

On 4 April 2023, China National Medical Products Administration (NMPA) released the Measures on the Supervision and Administration of Cosmetics Online Operation ( Hereinafter referred to as the Measures) to strengthen online supervision.

With the rapid development of the Internet economy, online shopping for cosmetics has become one of the main channels for the cosmetics business. While providing convenience to consumers, the online operation of cosmetics has also been accompanied by many cosmetics quality and safety issues. Its non-compliant rate during the random inspection and its risk monitoring problems are significantly higher than those of traditional sales channels.

In face of these rising issues, NMPA issued this measure to further standardize the cosmetics online market and clarify accountability for each stakeholder. It will come into force as of 1 September 2023.

I. Highlights of The Measures

In the Measure, it clarifies regulatory objects and regulatory authorities. It is applicable to cosmetics e-commerce operators within the territory of China, including cosmetics e-commerce platform operators (hereinafter referred to as platforms), cosmetics operators on the platform, and other e-commerce operators who operate cosmetics through self-built websites and other online services. The regulatory authorities are NMPA and departments above the county level that are responsible for the supervision and administration of drugs.

Additionally, it specifies the accountability of platforms. It requires platforms to carry out real-name registration, daily inspection, the stop and report of non-compliant manners, the report of quality and safety issues to relevant authorities, etc. Meanwhile, platforms shall set up cosmetics quality and safety management systems or set up full-time/part-time positions responsible for the safety and quality of cosmetics.

Furthermore, it specifies the accountability of the cosmetics operators on the platform. It requires cosmetics operators to conduct purchase inspection, product information display, risk control, product recall, storage, and transportation, etc.

What’s more, it stipulates the accountability of regulatory authorities. It makes clear provisions on the supervision and inspection rights of each department, administrative penalty rights, online random inspection, evidence collection, online operation monitoring, etc.

II. The Major Impacts on Cosmetics Stakeholders in China

1. Platforms shall set up a cosmetics quality and safety management system or set up full-time/part-time positions responsible for the safety and quality of cosmetics.

This is an innovative measure the NMPA takes to hold platforms accountable for their online operation. It, on the one hand, gives full play to the role and advantages of platforms in online supervision. On the other hand, it constructs a mechanism and procedure for platforms to assist regulatory departments in the monitoring of online operations.

2. Platforms shall report safety and quality issues with serious consequences to the relevant authorities for further investigation.

Under the Measure, platforms shall take immediate actions to control and stop illegal business on the platform, such as deleting, blocking, and removing links, etc. In addition, platforms shall report safety and quality issues with serious consequences to the relevant authorities for further investigation. The supervision of platforms cannot replace the supervision of regulatory authorities, and the record of illegal business is not allowed to be just deleted by platforms without the report to relevant authorities.

3. The Measures aim to crack down on false advertising.

Under the Measure, cosmetics operators on the platform shall comprehensively, truthfully, accurately, clearly, and timely disclose information consistent with registration/notification information, especially labeling, safety and efficacy claims. It also encourages cosmetics operators to display the registration/notification on their website. This is likely to crack down on false advertising on the online sales of cosmetics.

4. It raises the price that cosmetics operators have to pay to sell non-compliant cosmetic products.

Compared to its draft for comments, the Measures specifically point out that the display of non-compliant batches of cosmetics is one year. Customers can see this information when they are browsing the website. Even though it might just be one batch of products that are non-compliant, it might give customers negative impressions of other products even the store itself. This raises the price that cosmetics operators have to pay to sell non-compliant cosmetic products. Therefore, it drives cosmetics operators to be more prudent in choosing and selling products.

5. The Measure is not applicable to cross-border e-commerce retail of imported cosmetic products.

Those who engage in cross-border e-commerce retail of imported cosmetics are not applicable to the Measures and shall abide by the relevant national regulations on the supervision of cross-border e-commerce retail of imported commodities.

Online cosmetics shopping is an unstoppable trend, bringing convenience and wider choices for consumers. However, it also accompanies many potential safety and quality issues. It is inevitable that government takes action to regulate and standardize the online shopping environment. Only those who operate compliantly and provide high-quality products/services to customers will grow and prosper with time.

By Yingying