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Beginning April 1, 2024, China is set to enforce stringent new rules on RF beauty devices, elevating them to the status of class 3 medical devices. This policy shift surpasses the regulatory framework of the US FDA and is likely to challenge numerous Chinese manufacturers, simultaneously creating growth prospects for American companies in this sector.
The 2024 regulatory updates promise to reshape the industry, potentially triggering a market downturn. As per the directive issued by the China Center for Device Evaluation of the State Food and Drug Administration, RF beauty devices will now be regulated as advanced medical devices. This shift is expected to disrupt market dynamics, escalating costs for manufacturers of RF beauty equipment and possibly resulting in a significant withdrawal from the market due to the heightened cost of entry and operation.
Data from Euromonitor International indicates that China’s market for small personal care appliances, with RF beauty devices as a key segment, soared to an impressive USD 5.6 billion in 2023. This market, which expanded at a 4.8% CAGR from 2018 to 2023, has been a hotbed for innovation and new entrants.
Compounding the issue, the new rules require extensive and costly clinical trials for new products, with expenses estimated between 4 to 5 million yuan. This financial burden could dissuade many firms from venturing into the market after April 2024.
China’s history of stringent industry regulations is notable. Recent actions, like the clampdown on online gaming and the tutoring sector, have had a profound impact on major Chinese companies, leading to massive job losses.
As the Chinese government continues to prioritize economic development, the reality for many businesses is less optimistic. “No sector is safe from China’s crashdown.” as said by tech analyst Jordan Schneider during a CNBC interview.
Under the impending regulations, items formerly categorized as minor household appliances will be reclassified as Class III medical devices. Firms are given a two-year period for compliance, a challenging feat given the intricate nature of the regulatory process.
The FDA’s system for categorizing medical devices, based on associated risk levels, differs markedly from China’s new approach. While high-risk class 3 devices in the U.S. require approval, lower-risk classes 1 and 2 require only clearance through comparison with existing products.
Proposals in China to exempt low-risk, low-energy devices from stringent control were ultimately not incorporated, resulting in a blanket regulatory strategy that presents substantial hurdles for businesses.
This strict regulatory environment in China forecasts a grim future for its beauty device industry. The sector, worth $5.6 billion and responsible for a million jobs, might face its demise starting April 2024, further impacting China’s economic landscape.
In contrast, this development could be advantageous for American RF beauty device companies. The U.S. dominates the global market, with 11 of the 19 key players in the RF micro-needling market based in the country, as per Data Bridge Market Research. The challenges facing Chinese companies could thus present a prime opportunity for American firms to establish a strong presence in the burgeoning Chinese market.
Published by: Nelly Chavez
