From Self-Care to Smart Backpacks: This is the first post in a five-part series where we’ll highlight product categories with global demand and the regulations and challenges to keep top of mind.
According to the World Health Organization, “health is a state of complete mental, physical and social well-being, and not merely the absence of disease or infirmity.” In recent years, the idea of self-care has become an important element of well-being for people worldwide, whether in India, Australia, Japan or the United States – where 72 percent of millennial women surveyed by Shape magazine declared self-care a priority for 2018. In the last decade male self-care has also taken off, and the global male grooming market is predicted to almost double in size from 2012 to 2024.
While there are certainly opportunities, there are an array of regulatory pitfalls in the cross-border self-care space. We’ve compiled some examples of different regulations to be aware of when establishing an international e-commerce presence for these products.
1. There's a broad, sometimes surprising, and fast evolving spectrum of regulations across the globe.
Canadian and European Union regulations are more stringent than U.S. requirements and the European Union has banned more than 1,000 chemicals from beauty products, while only 11 chemicals are prohibited by the Food and Drug Administration in the U.S. That may soon change, however. The Safe Cosmetics and Personal Care Products Act recently introduced to the U.S. House of Representatives aims to require the personal care and cosmetics industry to observe a minimum safety standard.
2. Regulations governing organic products can sometimes seem counter-intuitive.
Many consumers now prefer plant based alternatives to chemical products, and the global organic personal care market is expected to reach $25.11 billion by 2025. Each country regulates organic products differently. In China, where organic self-care products have become sought after as a status symbol by the middle class, skin-care imports must be tested on animals to ascertain whether they meet Chinese safety standards. This is likely to be problematic for companies selling organic and eco-friendly products. China is considering alternatives to animal testing, however.
3. Organic food certification is complex.
Organic food is an integral part of self-care, but e-commerce merchants need to ensure the international organic certification of their product is valid in global markets. A certificate of inspection from a control body approved by the EU must accompany organic food imports into the EU. There's growing demand for organic food in China, following a 2014 government report that showed that 16 percent of all soil and almost 20 percent of farmland was contaminated by pollutants including arsenic. Consumers in China are wary of organic labels awarded to homegrown products by the Certification and Accreditation Administration of China, which is vulnerable to manipulation. Cross-border e-commerce facilitates access to trusted organic food labels, but while there is greater confidence in foreign organic product, since China does not permit equivalence agreements even USDA certified organic producers will need to apply for Chinese certification.
4. Certain personal and self care products are classified into different categories in different countries.
There isn’t always global consistency for harmonizing, or classifying, product. As an example, feminine hygiene items are classified differently in different markets. These products, especially organic and eco-friendly ones, have seen recent substantial growth. India and China, home to large populations of women, are predicted as major future markets; the global market is expected to reach $24.67 billion by 2021 and the global natural and organic tampons market expected to grow at a CAGR of close to 7% by 2020.
One of the advantages of e-commerce versus in store purchase is that it offers a private shopping experience and allows users to browse a wide range of products. However, product classification is often complicated for merchants. The Food and Drug Administration regulates certain feminine hygiene products as medical devices, for example, while the EU regulates feminine intimate care items as consumer products. It is important for cross border merchants to pay close attention to the differences of product harmonization for each market.
5. Dietary supplements are classified as food or drugs, depending on the country.
The market for dietary supplements in North America is expected to reach USD 68.22 billion by 2025 and is similarly robust in countries including India. Regulations vary widely. In the EU such products are deemed a ‘foodstuff’ and are regulated accordingly. In Japan and China supplements need to be registered before importation, while in the United States, Hong Kong and Malaysia the claims associated with a particular product define its category as a food or drug.
With growing awareness of the dangers of chemicals in food and personal-care products prompted by the global expansion of the self-care movement, there’s a lot of opportunity for cross-border e-commerce in this space. Before trying to establish a foothold it’s essential to stay up-to-date on the fast-evolving maze of regulations and ascertain whether your products meet the local criteria in each market you prepare to enter.
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