A cosmetic factory in Yiwu, Zhejiang province. [Photo/ywcity.cn]

Yiwu's cosmetic industry is growing rapidly, with its industrial output surpassing 7 billion yuan ($966 million) in 2023, predominantly driven by exports, which constituted 80 percent of its total output.

Yiwu accounts for about one-third of China's cosmetic export market and over 80 percent of Zhejiang's.

What sets Yiwu apart is its transition from original equipment manufacturer (OEM) manufacturing to cultivating its own brands, leveraging technological innovations for market expansion.

One notable player, Zhejiang Diefei Cosmetics Co Ltd, has strategically pursued brand development alongside OEM production, establishing itself as one of Yiwu's largest cosmetic enterprises.

By exporting to global markets and collaborating with industry giants like Watsons and Disney, Diefei has cemented its position in the international arena. Moreover, Diefei's commitment to innovation is evident in its investment in R&D, with over 3 percent of its annual revenue allocated for new product development.

Similarly, Zhejiang Yanxue Cosmetics Co Ltd has undergone a transformation, shifting from OEM manufacturing to building its own brand identity. Yanxue has ventured into international markets with its products such as eyeshadows, mascaras, and lipsticks.

Yiwu currently is home to 169 cosmetic manufacturers and over 300 supporting enterprises, providing a solid foundation for its industrial growth.