Starting from April 1, 2024, China will enforce stringent regulations on RF beauty devices, reclassifying them as class 3 medical devices—a standard surpassing that of the U.S. FDA. This regulatory adjustment presents challenges for multiple Chinese manufacturers while concurrently opening avenues for potential expansion into 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 recent regulatory changes necessitate clinical trials for new product registrations, imposing substantial costs ranging between 4 to 5 million yuan. This significant financial burden is expected to discourage numerous companies from entering the market after April 1, 2024.
This move is not the first instance of regulatory tightening in China. In the previous month, additional restrictions on online gaming, viewed by some as an overreaction, led to significant stock declines in major companies such as NetEase and Tencent Holdings. Similarly, in 2021, the crackdown on tutoring services had a devastating impact on leading Chinese tech firms, resulting in the sudden loss of millions of jobs.
The successive regulatory crackdowns suggest a challenging environment for various industries in China, with the potential for far-reaching consequences on market dynamics and economic stability.
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 latest regulations, products previously categorized as small household appliances are now reclassified as Class III medical devices. Companies are granted a two-year window to achieve compliance, although the intricate nature of the process typically demands at least four years — a duration even the EU extends to five years for similar applications.
The FDA classifies medical devices into three risk-based categories, necessitating approval for high-risk Class III devices. In contrast, lower-risk Classes I and II devices only require clearance based on predicate comparisons.
Discussions in China regarding potential exemptions for low-energy, low-risk devices from stringent regulations were not adopted, resulting in a one-size-fits-all approach that presents significant challenges for companies in the sector.
With this stringent government intervention, China’s beauty device industry faces an uncertain future. April 1, 2024, could signal the industry’s demise, erasing a $5.6 billion market and a million jobs, dealing another blow to China’s economy.
However, this predicament could present a strategic 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, out of the 19 major players in the RF microneedling market, 11 are based in the U.S. With China’s industry facing challenges, U.S. counterparts have a golden opportunity to seize a share of the $5.6 billion and continuously growing Chinese market.
