Pharma firms step into cosmetics industry

Traditional pharmaceutical enterprises have the advantage of quality control systems, which is the breakthrough point for them to enter the daily chemical industry, market insiders said.

And some of them have already succeeded in making the transition. According to Yunnan Baiyao's financial report in the first half of fiscal year 2019, the company transformed from a traditional Chinese patent medicine enterprise into a forerunner in China's wider health industry.

In the first half of this year, the sales revenue of Yunnan Baiyao's health product subsidiary surged by 5.1 percent year-on-year to 2.47 billion yuan, with a net profit of 960 million yuan, roughly equating the same period in the previous year, the report said.

Meanwhile, the market share of its toothpaste business grew 20.1 percent year-on-year, ranking first across China.

Wuhan-headquartered brand Mayinglong Pharmaceutical Group Co Ltd, is well-known for its hemorrhoid ointment. In 2009, the company expanded its business by launching an eye cream. Last year, it completed business integration and established a health company, covering functional cosmetics, functional food, baby care, and anorectal care products.

In its financial report of fiscal year 2018, the company said that it was undergoing strategic transformation, expanding its business from the pharmaceutical industry to pharmaceutical circulation, hospital treatment and the wider health industry.

The sales revenue of the "other products" category reached 463 million yuan, taking up 21.06 percent of its total income, the report said.

This summer, Mayinglong launched a lipstick kit at a price of 399 yuan. The kit includes three lipsticks in light pink, crimson and maple-leaf red.

The incongruity of a hemorrhoid ointment company selling lipsticks made the lipsticks a success on the internet. One online comment said "Now I am good from head to toe."

In July, the monthly sales volume of Mayinglong lipstick on its online flagship shop surpassed 900, and most of the feedback online was positive.

"Because drug regulation is becoming stricter, many traditional pharmaceutical enterprises are turning to the daily chemical sector for new growth points, Mayinglong is one of them. However, our previous attempts were not successful," Xia Tian, from the bond department of Mayinglong, told Beijing Business Today.