When skincare brand entrepreneurs select a manufacturing partner, they often fall into “low-price traps” due to overlooking compliance details. In 2024, a factory in Foshan was fined RMB 400,000 for illegally adding colorants, while Guangzhou Pomei’s sunscreen products failed 6 quality indicators and incurred a fine of over RMB 10,000. Such frequent cases expose blind spots in factory selection. Combined with the 2025 regulatory updates, this article breaks down the core compliance requirements for skincare factories, differences between three processing models, and teaches you a 3-step factory inspection method to screen reliable partners—helping you avoid 90% of OEM/ODM risks.
I. 3 Core Models of Skincare Factories & Their Risk Differences
- OEM (Production-Only)
This model involves manufacturing strictly according to the brand’s existing formulas, with profit margins as low as 3%-8% (similar to Foxconn’s business model). Key risk: Factories may cut costs by substituting raw materials. For example, Foshan Tongmei illegally added colorant CI 12700 to leave-on skincare products in 2024, violating the Technical Code for Cosmetic Safety.
- ODM (R&D + Production)
ODM factories provide both formula design and manufacturing, with profit margins ranging from 10%-25%. However, “exaggerated efficacy claims” are a major risk. Guangdong Tongmei, for instance, falsified efficacy evidence for “ginseng anti-wrinkle” products during registration, claiming “99% restoration of youthfulness” without citing supporting literature—violating new registration regulations.
- OBM (Own-Brand Manufacturing)
OBM factories own a complete industrial chain, with profit margins of 30%-60%. They have the strongest compliance but charge higher OEM premiums. Typically, these factories are equipped with CNAS-certified laboratories, and raw material traceability can be tracked to supplier batches.
II. 7 Non-Negotiable Compliance Red Lines for Skincare Factories (2025)
- Qualification Red Line: Factories must hold a Cosmetic Production License. Manufacturing beyond the licensed scope is treated as “unlicensed production.” The 2024 update requires re-approval for formula changes in special-use cosmetics.
- Raw Material Red Line: Substances not listed in the Catalog of Used Cosmetic Raw Materials are prohibited; restricted ingredients must be used in precise quantities. Guangzhou Pomei’s sunscreen fine resulted from failing 6 sunscreen agent concentration standards—directly violating this red line.
- Registration Red Line: Efficacy claims must be supported by literature. Foshan Tongmei was fined RMB 400,000 for false registration; 2025 policies mandate “real-time review” of registration materials, increasing the cost of fraud.
- Production Red Line: Compliance with GMPC standards is required, with workshop cleanliness levels ≥ Class 100,000. Guangdong Tongmei was ordered to suspend production due to flawed production systems.
- Labeling Red Line: Full ingredient lists and production license numbers must be labeled; even free gifts require expiration date markings.
- Environmental Red Line: Packaging void ratio must be ≤ 50%, and wastewater discharge must meet the Integrated Wastewater Discharge Standard.
- Testing Red Line: Finished products must pass 34 tests (including microbiology and heavy metals). Guangzhou Pomei’s untested products entered the market, leading to quality failures.
III. 3-Step Factory Inspection Method: Screening Reliable Skincare Factories from Scratch
Step 1: In-Depth Qualification Verification (Avoid 80% Non-Compliant Factories)
- Check “Dual Certificates”: Verify the Production License scope on the NMPA (National Medical Products Administration) official website; use enterprise query platforms (e.g., Qichacha) to review environmental impact assessment reports.
- Check Historical Records: Search “administrative penalty announcements.” Guangdong Tongmei was listed as a “severely non-compliant enterprise” in 2024—such factories should be eliminated immediately.
- Check Registration History: Cross-verify the factory’s registered products in the NMPA system over the past 3 years. Frequent registration cancellations and re-registrations (e.g., Tongmei changing registration numbers within 3 days) indicate unstable formulas.
Step 2: On-Site Inspection of 3 Critical Areas
- Raw Material Warehouse: Confirm restricted/prohibited materials are stored in separate areas; check for traceability codes (qualified factories can trace raw materials to customs declaration documents).
- Production Workshop: Review air purification equipment operation records; employees must wear sterile clothing (check cuffs for dust as a quick test).
- Laboratory: Must be equipped with high-performance liquid chromatography (for ingredient testing) and microbial incubators; calibration records must be valid.
Step 3: 3 Critical Contract Clauses to Mitigate Risks
- Quality Compensation: Stipulate “10x sales value compensation for detected prohibited/restricted substances” to cover regulatory fine risks.
- Delivery Guarantee: Clarify “waived OEM fees if raw material delays exceed 7 days” to bind the factory’s supply chain responsibilities.
- Registration Joint Liability: Require factories to bear 50% of compensation for false registration (referencing brand losses in the Tongmei case).
IV. New Trends in Factory Selection Under 2025 Policies
- Silver Hair Care Production Capacity: New policies encourage R&D of anti-aging skincare for seniors; prioritize factories with laboratories specializing in skin aging mechanisms.
- Digital Capabilities: Factories with MES (Manufacturing Execution Systems) (for real-time feeding monitoring) reduce defect rates by 40%.
- International Certifications: Factories with ECOCERT organic certification are better suited for cross-border e-commerce channels.
Pitfall-Avoidance Toolkit: Skincare Factory Inspection Checklist
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Verification Dimension
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Qualified Standard
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Risk Signal
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Qualifications
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Valid license covering the target product category
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Expired license, frequent production address changes
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Raw Materials
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Suppliers provide COA reports; raw materials have traceability codes
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Unlabeled raw materials, sources listed as “traders”
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Testing
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Third-party test reports provided for each batch
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Only in-house test reports (no CNAS mark)
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After-Sales Service
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24-hour response to quality complaints
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Evading responsibility, requiring brands to bear fines alone
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