Commencing on April 1, 2024, China is set to implement rigorous regulations on RF beauty devices, elevating their classification to class 3 medical devices — a standard surpassing that of the U.S. FDA.
This policy shift introduces challenges for numerous Chinese manufacturers, simultaneously creating avenues for potential expansion in the U.S. market.
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 recently introduced regulations now require clinical trials for new product registrations, incurring costs of 4 to 5 million yuan.
This substantial financial burden is expected to dissuade numerous companies from entering the market after April 1, 2024.
This is not the initial instance of regulatory crackdowns by China. In the preceding month, additional restrictions on online gaming, perceived as an overreaction, led to significant stock declines in major companies like NetEase and Tencent Holdings.
Similarly, in 2021, the crackdown on tutoring services had a devastating impact on leading Chinese tech companies, resulting in the abrupt loss of millions of jobs overnight.
While the Chinese government emphasizes economic growth, companies may not feel the benefits. “There’s no safe sector from China’s crashdown,” said China watcher tech analyst Jordan Schneider.
Under the newly implemented regulations, items previously classified as small household appliances are now designated as Class III medical devices.
Companies are given a two-year timeframe to comply, yet the intricate nature of the process typically necessitates at least four years – a duration even the EU extends to five years for comparable applications.
The FDA categorizes medical devices into three classes based on risk, requiring approval for high-risk Class 3 devices. Conversely, lower-risk Classes 1 and 2 devices only need clearance based on predicate comparisons.
Discussions in China regarding potential exemptions from stringent regulations for low-energy, low-risk devices were not adopted, leading to a one-size-fits-all approach that poses significant challenges for companies in the sector.
With this stringent government crackdown, China’s beauty device industry faces an uncertain future. April 1, 2024, could mark the end of this industry, erasing a $5.6 billion market and a million jobs, dealing another blow to China’s economy.
However, this predicament could present a golden opportunity for U.S. RF beauty device companies to enter or expand in China.
The U.S. leads the RF beauty device market with a majority of key players. According to Data Bridge Market Research, among the 19 major players operating in the radiofrequency (RF) microneedling market, the U.S. holds 11 seats.
With the downturn of Chinese players, U.S. counterparts should seize this golden chance to take over the $5.6 billion and continuously growing Chinese market.
This shift could represent a significant breakthrough for U.S. RF beauty device companies in establishing a prominent presence in China.
The U.S. currently houses most of the key players in the RF beauty device sector.
Data Bridge Market Research highlights that out of the 19 major players in the radiofrequency (RF) microneedling market, 11 are based in the U.S.
With Chinese players facing challenges, this presents a golden opportunity for U.S. RF beauty device companies to step in and capture a share of the $5.6 billion and continually expanding Chinese market.
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