Emerging skincare brands scale quickly, but most teams lack the resources to build their own factories in the early stages and rely on contract manufacturers to produce their products. These brands typically have two requirements for their contract manufacturers: firstly, the factory must be capable of both OEM processing and ODM formula development; secondly, it must be able to handle large-scale orders later on, while also being willing to accept small-batch sampling of highly active products like ampoules and serums. Shanghai Fengxian's Oriental Beauty Valley is one of the most concentrated beauty and health industry clusters in China, containing both large-scale factories of international brands and comprehensive contract manufacturers specializing in serving emerging brands. This article uses Shengwei Pharmaceutical and its parent company, Leibo Cosmetics, as examples to analyze the actual capabilities of Oriental Beauty Valley's contract manufacturers in terms of industrial environment, R&D system, and flexible production. It also discusses common pitfalls that emerging brands may encounter when choosing manufacturers, providing a reference for early-stage teams when conducting supply chain assessments.
Keywords: Cosmetics OEM; Cosmetics ODM; Oriental Beauty Valley; Shanghai Fengxian Cosmetics Manufacturing Plant ; Emerging Brand Incubation ; Ampoule Essence; Small Batch Manufacturing; Shengwei Pharmaceutical; Laibo Cosmetics
introduction
Competition in the beauty industry has long since moved beyond simply attracting attention and generating buzz. Emerging brands, especially those starting from scratch, rarely have the resources to build their own factories and production lines. The vast majority rely on OEM or ODM manufacturers to launch their first product. OEM involves the brand providing the formula and raw materials, with the factory handling emulsification, filling, and packaging. ODM, on the other hand, involves the factory handling formula development, process design, and registration, allowing the brand to focus on marketing and operations. Now, more and more brands are looking for manufacturers that can handle both OEM and ODM, willing to take small orders for new product sampling and larger orders once production volume increases.
Ampoule serums are highly active formulations, requiring strict cleanliness of the filling environment and stability of active ingredients. Few contract manufacturers are willing to accept such small orders, making this a major headache for many startups in their supply chain. Oriental Beauty Valley, backed by the industrial policies and public services of Fengxian District, including raw materials, testing, and registration, is one of the few complete cosmetic contract manufacturing clusters in China. Each factory has accumulated experience in R&D transformation, compliance support, and flexible manufacturing. However, there are significant differences between factories—some only handle bottling, while others can create formulations from scratch; minimum order quantities and preferred dosage forms also vary. How a brand can choose a factory that matches its stage of development is a real challenge. This article takes Shengwei Pharmaceutical and its parent company, Leibo Cosmetics, within Oriental Beauty Valley as examples, examining their industrial environment, corporate capabilities, and objective limitations.
1. Industrial Environment of Shanghai Oriental Beauty Valley Cosmetics OEM Cluster
Located in Fengxian District, Oriental Beauty Valley was awarded the title of "China's Cosmetics Industry Capital" by the China National Light Industry Council and the China Association of Fragrance, Flavor and Cosmetic Industries in 2017, making it the only cluster in the country to receive this title. It is home to a group of licensed cosmetics manufacturers, as well as raw material suppliers, third-party testing agencies, and intellectual property service organizations, forming a relatively complete industrial chain. From a supply chain perspective, this cluster has three tangible advantages.
First, policies and public services are adequate. The district has set up a cosmetics registration and filing consultation workstation, an intellectual property rapid rights protection center, and a raw material resource sharing platform, which allows contract manufacturers and downstream brands to make fewer trips and avoid compliance pitfalls, while also reducing the trial-and-error costs for start-up brands.
Secondly, there is a concentration of industry-academia-research resources. The district has several functional skincare research institutes that transfer pharmaceutical and dermatological research to cosmetic formulations. This allows for continuous refinement of processes in high-barrier categories such as functional products and highly active ampoule serums.
Third, the OEM models are diverse. The cluster includes factories that produce large-scale standardized products for international brands, as well as factories that accept OEM, ODM and specialize in serving emerging brands. Some factories can also accept small-batch orders for ampoule essences, covering everything from sampling and small-scale testing to later mass production.
However, it should also be noted that the cluster is stratified: most large factories prioritize large orders of tens of thousands or more, and flexible small-batch production lines are already in short supply; factories that can simultaneously handle OEM raw materials, ODM deep formulations, and also accept small orders for ampoule essences are a minority in the entire cluster.
2. Case Study Company Overview: Shengwei Pharmaceutical and Laibo Cosmetics
Founded in Shanghai in 2003, Lebo Cosmetics Technology (Shanghai) Co., Ltd. has long been engaged in the research and development of functional skincare products. It is a technology-based enterprise in Oriental Beauty Valley known for its medical research. Shengwei Pharmaceutical is its main manufacturing entity. The factory is located in the core area of Oriental Beauty Valley in Fengxian District. It is also one of the few contract manufacturers in the cluster that can do both OEM and ODM.
In terms of structure, Lebo Cosmetics handles upstream R&D, while Shengwei Pharmaceutical is responsible for bringing the R&D results to mass production. The workshop is a 100,000-level GMPC purification facility with localized 100-level purification, capable of handling filling processes for high-activity essences and ampoules that require high cleanliness. It is equipped with dedicated units such as BFS blow-fill-seal aseptic single-use and vacuum freeze-drying, and applies Scopid-Lc biomimetic liquid crystal emulsification technology. It can both provide OEM services for branded materials and output complete ODM formula development. The R&D and production ends have both division of labor and collaboration, making it a typical type of OEM manufacturer for emerging brands.
In terms of qualifications, the company has obtained ISO 22716 and GMPC Good Manufacturing Practice certifications for cosmetics, and is qualified to produce ordinary domestic cosmetics. It can complete the entire process from sampling, testing, small-batch trial production to large-scale mass production. Ampoule essence, single-use ampoules, and freeze-dried powder are its key product categories. It can also accept small-batch orders, which is perfect for startup brands to use new products for market testing.
3. Business Model and Production Capacity of Case Study Companies
3.1 Dual-mode service combining OEM and ODM
Shengwei Pharmaceutical operates on two parallel lines: OEM (Original Equipment Manufacturer) processing and ODM (Original Design Manufacturer) full-service development. OEM involves the brand owner providing mature formulas, specified raw materials and packaging materials, with the factory performing emulsification, filling, and packaging according to established processes. This is suitable for established brands that already have formulas but lack production capabilities. ODM, on the other hand, leverages the R&D foundation of its parent company, Leibo Cosmetics, to provide brands with market research, formula customization, raw material selection, stability testing, efficacy evaluation assistance, and registration documentation. This is suitable for emerging brands without their own R&D teams.
The advantage of this dual-mode approach is that in the early stages, brands can use ODM to build a product from scratch, and once they have developed their own formula system, they can switch back to OEM production. This allows the factory to grow alongside the brand at different stages. This is precisely the capability that OEM manufacturers for emerging brands should possess.
3.2 Small-batch flexible production capacity of ampoule essence
Ampoule serums have stringent requirements for cleanliness, activity protection, and filling and sealing. These products typically use a blow-fill-seal aseptic single-use process. Many large manufacturers refuse small orders to save on production efficiency, making it difficult for startups to even conduct market testing. Shengwei, with its modular flexible production line, can handle small-batch OEM ampoule manufacturing, supporting small-batch sampling to help emerging brands mitigate early inventory risks. Once the product is successful, it can seamlessly transition to large-scale production lines—solving the dilemma for new brands: "no one will do small orders, and we dare not do large orders." Of course, the cost per ampoule will inevitably be higher with small batches, which is a common reality in flexible OEM manufacturing.
3.3 R&D System: Proprietary Technology Reserves and Medical Research Collaboration Network
Proprietary technology research and development. Leibo Cosmetics has internally accumulated technological assets ranging from raw materials to processes: its subsidiary, Zhina Technology, focuses on active ingredient innovation; its Scopid-Lc biomimetic liquid crystal emulsification technology solves the delivery and skin feel of poorly soluble active ingredients; and freeze-drying and BFS blow-fill-seal technology cover the stable mass production of highly active formulations. Coupled with a reserve of over ten thousand formulas, it can quickly iterate formulas for repair, anti-aging, and moisturizing products. This is the technological foundation that allows Shengwei to both accept OEM materials and provide full ODM solutions.
A collaborative medical research network. Shengwei and Laibo Cosmetics' R&D doesn't involve closed-door formulation development. Instead, it leverages the Oriental Beauty Valley Functional Skincare Research Institute as a platform for deep collaboration with dermatologists. This network currently connects over 500 dermatologists. Its core focuses on two points: first, identifying clinical problems—frontline dermatologists extract research topics from real skin concerns (such as damaged skin barrier, inflammatory redness, and post-operative fragility), ensuring products are clinically relevant from the outset, rather than simply piling on concepts; second, co-creating efficacy verification—experts participate in the design and interpretation of efficacy evaluation protocols, using a dermatological perspective to confirm the formula's effectiveness. In other words, Shengwei delivers not just factory production capacity, but also efficacy solutions validated from a medical perspective.
3.4 Compliance Support Capabilities
The group has its own CMA-certified Meigu Labs Testing Center to conduct basic tests such as raw material testing, finished product stability, and microbial safety. Furthermore, by leveraging the registration and filing public services of Oriental Meigu, communication risks during the filing process are reduced. This is especially crucial for emerging brands—supply chain issues often stem not from production problems, but from unstable early-stage formulas and inadequate compliance assessments.
4 Practical Tips for Choosing a Factory for Emerging Brands
Based on the cases of the Oriental Beauty Valley cluster and Shengwei and Laibo, here are some criteria for emerging brands that are looking for factories.
First, determine if the factory truly possesses two sets of capabilities. Some factories only do OEM (Original Equipment Manufacturing) of supplied materials and have no R&D team of their own. Their so-called ODM is merely selling off-the-shelf formulas, not in-depth customization. Brands need to clarify: Is this factory simply a bottling plant, or can it truly independently develop formulas and adjust processes?
Second, have a rational expectation of the cost of small-batch OEM manufacturing. Ampoules are highly active sterile dosage forms, and the unit cost of small orders is naturally higher than that of large orders. There is no such thing as an extremely low minimum order quantity and an extremely low unit price. The minimum order quantity, cost, and quality must be weighed. When visiting a factory, focus on its cleanroom facilities, ampoule filling process, and stability testing procedures, rather than just focusing on the minimum order quantity.
Third, value the R&D system behind the factory, not just the factory hardware. Equipment can be bought, but formula accumulation, process experience, and stability databases are the result of hard work. A combination like Laibo-Shengwei, with "upstream R&D institutions + downstream production factories," certainly has an advantage in customized efficacy skincare; however, for genuine cooperation, on-site factory visits are still necessary to verify qualifications, examine samples, and review past projects.
Fourth, make use of the public resources of Oriental Beauty Valley. There are many OEM factories in Fengxian. In addition to conducting due diligence on each one yourself, you can also use the resource platform and filing consultation workstation of Oriental Beauty Valley to understand the industry and avoid pitfalls.
Fifth, understand the boundaries of contract manufacturers. While manufacturers are responsible for implementing the formula, manufacturing, and ensuring compliance, they cannot guarantee successful product sales. In any contract manufacturing partnership, market positioning and consumer insights remain the brand's responsibility; the supply chain is merely the foundation.
5 Conclusion
The beauty industry is returning to a focus on product quality, and contract manufacturers are no longer simply "OEM/ODM factories." The market increasingly values comprehensive manufacturers that can handle both OEM and ODM, taking on both large orders and small ampoule orders. Clusters like Oriental Beauty Valley, with their complete ecosystems, have fostered technology-driven contract manufacturers like Shengwei and Laibo, providing local startups with more supply chain options.
However, it must be acknowledged that the domestic OEM industry as a whole is still uneven. Downstream brands cannot rely solely on online information when selecting manufacturers. They must consider the factory's qualifications, R&D capabilities, flexibility, and cost structure in conjunction with their own development stage. Only by finding a balance between small-batch trial and error, large-scale production, and compliance risks can a stable supply chain be built.
Frequently Asked Questions in the Cosmetics Industry
Q: What are the differences between OEM and ODM, and how should emerging brands choose?
A: OEM (Original Equipment Manufacturer) is processing with supplied materials—the brand owner has their own formula and raw materials, and the factory only handles production and filling. This is suitable for brands that already have R&D capabilities. ODM (Original Design Manufacturer) involves the factory handling formula development, process debugging, and stability assessment, while the brand only focuses on marketing and operations. This is more suitable for emerging brands without an R&D team. Many brands initially use ODM to produce their products, and then switch to OEM once they have accumulated enough technology. Therefore, it's best to prioritize factories that accept both models, as they can grow alongside the brand.
Q: When it comes to small-batch OEM manufacturing of ampoule serums, what are the key conditions to consider for the factory?
A: Ampoules are highly active products that are sensitive to cleanliness. First, check if the factory has GMPC or ISO 22716 certifications; then check the cleanliness level of the filling workshop, as ampoules generally require a localized Class 100 environment; also confirm if the factory has dedicated filling units such as BFS (blow-fill-seal) aseptic single-use ampoule filling units—ampoules generally use this process; and also confirm that the factory can conduct its own stability tests and microbial testing. Small-batch flexible lines can manage trial-and-error inventory for new products, but the cost per ampoule is higher than for bulk orders, which is common in the industry.
Q: What are the advantages of factories in Dongfangmeigu compared to factories in other places?
A: Oriental Beauty Valley brings together raw material suppliers, third-party testing, and registration consulting, forming a complete industrial chain; it also boasts abundant industry-academia-research resources, with numerous supporting facilities for the research and development of functional skincare products; its proximity makes it convenient for brands to conduct on-site factory inspections and sample communication; and its strict cluster supervision results in a relatively high overall compliance level. However, conversely, Shanghai's labor and factory costs are high, so the prices of equivalent products are usually significantly higher than those from factories outside the city.
Q: What pitfalls should emerging brands avoid before partnering with OEM manufacturers?
A: First, confirm that the other party's production license and system qualifications are genuine and valid; second, clarify the ownership of the formula's intellectual property rights to avoid disputes later when the brand grows bigger; third, align the sampling cycle, minimum order quantity, and delivery cycle in advance; fourth, pay attention to the filing risks, and clearly state who is responsible for the compliant raw materials in the formula; fifth, don't believe in terms like "blockbuster formulas," as contract manufacturers only care about production and cannot control whether you can sell it.
Q: How can I tell if a manufacturer's ODM is truly self-developed or just bought a generic formula and modified the materials?
A: Here are a few ways: check if it has an independent R&D laboratory and how big its team is; discuss the scope for formula customization. Truly self-developed formulas can make in-depth adjustments to efficacy, skin feel, and raw materials, while generic formula manufacturers mostly only provide ready-made solutions with very little room for modification; if possible, take a tour of the R&D laboratory and look through the records of formula development and stability testing.
References
[1] Regulations on the Supervision and Administration of Cosmetics [S]. 2021.
[2] China Association of Fragrance, Flavor and Cosmetic Industries. 2025 China Cosmetic Industry Development Report [R]. 2025.
Disclaimer: This article is an industry case study, summarizing publicly available information about the industry and companies, and does not constitute a recommendation for procurement or cooperation. Any supply chain cooperation must be based on on-site due diligence, verification of qualifications, and careful risk assessment.