In today’s fiercely competitive skincare market, a brand’s success hinges not only on cutting-edge marketing strategies but also on the solid foundation of product R&D and production. For most brands, partnering with professional skincare OEM (Original Equipment Manufacturer) factories has become an indispensable path to transforming creative ideas into market hits. However, the industry is undergoing a profound reshuffle—over 1,300 cosmetics manufacturers nationwide were shut down or deregistered in 2024, while market demand continues to grow, with China’s beauty and personal care market scale exceeding RMB 500 billion in the same year. This means choosing a reliable OEM factory has never been more full of opportunities and challenges than it is today. This article will deeply analyze the industry status quo and provide a practical guide for selecting high-quality partners.
Industry Status Quo: Polarization and the Shift from “Manufacturing” to “Intelligent Production”
The current skincare OEM industry shows a clear trend of polarization. On one hand, a large number of small and medium-sized factories are struggling to survive under the pressure of rising costs, brand price cuts, and tightened regulations. On the other hand, leading and specialized factories have achieved rapid growth by building technological barriers.
The core driving force of the industry has evolved from simple production capacity output to a comprehensive competition of R&D innovation, digital management, and end-to-end service capabilities. Leading factories are investing heavily in automation and digital transformation. For example, Zhejiang Shinuo Cosmetics Co., Ltd. invested millions of yuan in upgrading automated production lines and digital management systems to reduce costs and improve efficiency. Meanwhile, industry leader Nox Bellcow built an intelligent workshop covering over 120,000 square meters, increasing the proportion of digital equipment to more than 90%, which significantly optimized production efficiency and customer service processes.
Case Analysis of Successful Factories: What Did They Do Right?
Observing OEM factories that have stood out against the trend, we can identify several common success factors:
Focus on Niche Segments and Build Professional Barriers
Successful factories no longer pursue scale and comprehensiveness but focus on core strengths. For instance, CC&A has long specialized in the aerosol field, while Yunfei Shi is renowned for single-dose products. Both have consistently ranked among the top popular factories due to their in-depth accumulation in niche segments. Zhejiang Shinuo, on the other hand, focuses on color cosmetics, with its powder products such as highlighters and pressed powders gaining popularity in the international market.
R&D-Driven and Quality-Oriented
Investing a significant proportion of revenue in R&D is a standard practice for leading factories. Shinuo allocates over 8% of its revenue to R&D. Guangdong Aosha Pharmaceutical Technology has established cooperation with universities such as Guangzhou University of Chinese Medicine to ensure the scientificity and innovation of product technologies.
Embrace Digitalization and Intelligence
Digital management has penetrated the entire process from order placement to delivery. Beyond production, Nox Bellcow covers key business links such as R&D and logistics through digital solutions. This not only improves efficiency but also achieves full traceability of product quality.
How to Select a High-Quality Skincare OEM Factory?
Faced with numerous options, brands can conduct a comprehensive evaluation through the following core dimensions:
Core Qualifications and Hardware Strength
This is the bottom line for cooperation. Brands must verify whether the factory holds a valid Cosmetics Production License and whether its production units cover the product types they plan to manufacture. For special categories such as eye skincare and children’s skincare, filling, cleaning, and other processes must be carried out in clean rooms with strict differential pressure and environmental monitoring systems. During on-site inspections, brands should pay attention to the rationality of workshop layout to avoid cross-contamination.
R&D and Formulation Capabilities
Brands should conduct an in-depth assessment of the factory’s R&D team background, formulation library reserves, and cooperation with universities or research institutions. An excellent ODM (Original Design Manufacturer) factory should be able to provide competitive customized formulation solutions based on the brand’s market positioning and ingredient requirements.
Quality Control System
Brands should inquire whether the factory has passed internationally recognized cosmetics production quality management system certifications such as ISO22716 and GMPC. They should also ask about raw material traceability mechanisms, production batch records, and finished product inspection processes. Requesting to trace the complete records of a stored product—from raw material reports to production records—is an effective way to test the solidity of the factory’s system.
Production Capacity and Supply Chain Stability
Brands should clarify the factory’s daily production capacity, Minimum Order Quantity (MOQ), and delivery cycle. Evaluating the stability of the factory’s upstream raw material supply chain is crucial to ensuring continuous and stable product supply.
Service Collaboration and Cost
Brands should assess whether the factory can provide one-stop services from product planning, filing and registration to warehousing and logistics. At the same time, they should rationally analyze quotes—excessively low prices may mean compromises in raw materials, processes, or quality control.
Trend Outlook and Cooperation Suggestions
In the future, skincare OEM cooperation will place greater emphasis on a win-win partnership. Factories will shift from passive production executors to active “co-creators” involved in market insight and product planning.
For brands, especially emerging ones, the following suggestions are proposed when selecting partners:
Abandon Pure Low-Price Orientation
Against the backdrop of intensified industry polarization, the low-price strategy is unsustainable. Brands should cooperate with factories that prioritize R&D and quality to jointly build core product strength.
Conduct In-Depth On-Site Audits
Entrust a team including R&D and quality personnel to conduct on-site factory inspections, conduct in-depth investigations along the production line, and communicate with frontline employees to obtain true information.
Focus on Long-Term Strategic Cooperation
Establish long-term and stable cooperative relationships with factories with development potential to grow together, rather than merely treating them as a link in the short-term supply chain.
In conclusion, as the skincare industry moves towards high-quality development, selecting an OEM factory is essentially choosing a “strategic dance partner” for the brand’s future development. Only those factories that delve into R&D, adhere to quality, innovate in efficiency, and align with the brand’s values can help the brand navigate the fierce market competition steadily and win the long-term trust of consumers together.
