Regulatory Changes in China’s $5.6 Billion RF Beauty Device Sector Open Lucrative Opportunities for U.S. Companies
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Starting April 1, 2024, China will impose strict regulations on RF beauty devices, classifying them as class 3 medical devices — a policy more stringent than US FDA standards. This change poses a threat to many Chinese manufacturers and opens opportunities for U.S. market expansion.
According to Euromonitor International, the market size for small personal care appliances in China reached a staggering USD 5.6 billion in 2023, with a CAGR of 4.8% from 2018 to 2023. Within this sector, beauty devices, particularly RF devices, have seen rapid growth, attracting a plethora of new market players.
However, the introduction of new regulations in 2024 is set to dramatically alter this landscape, potentially leading to a significant market collapse. The “Notice on Issuing the Guiding Principles for the Registration and Review of Radio Frequency Cosmetic Devices,” issued by the China Center for Device Evaluation of the State Food and Drug Administration, will classify RF beauty devices as high-level medical devices. This change is expected to heavily impact market development cycles and increase costs for RF beauty equipment manufacturers, possibly leading to widespread market withdrawal due to elevated investment and operational expenses.
The new regulations mandate clinical trials for new product registrations, entailing costs in the range of 4 to 5 million yuan. This steep financial requirement is likely to deter many companies from entering the market post-April 1, 2024.
This is not the first regulatory crackdown by China. Last month, further curbs on online gaming, perceived as an overreaction, caused stock plummets in major companies like NetEase and Tencent Holdings. In 2021, the crackdown on tutoring services resulted in a catastrophic impact on leading Chinese tech companies, wiping out millions of jobs overnight.
While the Chinese government emphasizes economic growth, companies may not be feeling the benefits. “There’s no safe sector from China’s crashdown,” said China watcher tech analyst Jordan Schneider.
Under the new regulation, products previously classified as small household appliances will now be deemed Class III medical devices. Companies have a two-year window to comply, but the complexity of the process typically requires at least four years – even the EU allows five years for such applications.
The FDA categorizes medical devices into three classes based on risk, requiring approval for high-risk class 3 devices. In contrast, lower-risk classes 1 and 2 devices only need clearance based on predicate comparisons.
Discussions in China about exempting low-energy, low-risk devices from stringent regulations were not adopted, leading to a one-size-fits-all approach that poses major challenges for companies in the sector.
With this severe government crackdown, China’s beauty device industry faces a bleak future. April 1, 2024, could mark the end of this industry, erasing a $5.6 billion market and a million jobs, and dealing another blow to China’s economy.
However, this could be a big break for U.S. RF beauty device companies to make their mark in China.
The U.S. is home to the majority of the big players in the RF beauty device game. Data Bridge Market Research shows that out of 19 major players in the radiofrequency (RF) microneedling market, the U.S. has got 11 of them. With China’s players hitting a rough patch, this could be a golden opportunity for U.S. RF beauty device companies to step in and capture a share of the $5.6 billion and continuously expanding Chinese market.