Yumeijing, a Tianjin-based children's cosmetics producer, is looking to boost growth by tapping the overseas e-commerce market and expanding its research and development efforts, according to company officials.

The well-known brand has already opened an online flagship shop on Tmall International, the country's top international e-commerce portal, to take advantage of the rapid growth in sales via e-commerce platforms.

"Though the COVID-19 pandemic dampened our sales to some extent, it did not deter us from expanding our R&D and innovation efforts," said Li Feng, general manager of Tianjin Yumeijing Group Co Ltd.

The company said it has sold 3.9 billion bags (25g per bag) of its Yumeijing children's skin care cream in the past 41 years, helping it cement its position in the children's skin care market. Its success also made it a potential merger and acquisition target for overseas brands like Johnson & Johnson. No such deal, however, materialized, said company officials.

Yumeijing is looking to further strengthen its R&D in fresh milk and herbal skin care products, according to Shi Bin, the group's president. He said the core focus will, however, be on fresh milk-based skin care products.

The company has spent around 3 million yuan to 5 million yuan on R&D in the last few years, he said. In 2018, it embarked on the mixed-ownership reform path and its annual profit has since averaged above 100 million yuan.

The company is also conducting extensive research on the efficacy of fresh milk for treating conditions like eczema in children. In addition, it has also teamed up with leading academicians to study the effectiveness of herbal medicines in skin diseases.

Market insiders said that most of the core ingredients of leading domestic cosmetic brands are still imported. Yumeijing's efforts are aimed at reducing the dependency on overseas imports and speeding up R&D of homegrown brands.

Zheng Chunyang, president of Robustnique Co, another homegrown cosmetic producer based in Tianjin, which makes recombinant enzymes and high-end cosmetics products, said most of the new ingredients required for cosmetics production in China need to comply with the Inventory of Existing Cosmetic Ingredients.

"The limited number of ingredients in the inventory and difficulties in getting approvals for new ingredients have caused problems within the industry, hindering innovation among Chinese cosmetic producers," he said.

In addition, like many domestic cosmetic products for adults, in the children's skin care segment, Yumeijing is facing challenges from big overseas brands such as Johnson&Johnson, Mustela and Pigeon.

Foreign brands currently account for a lion's share of the market in first-and second-tier cities. Yumeijing said its sales have been booming in the third-and fourth-tier cities, both in the retail and online sectors.

During the first nine months of this year, China's cosmetics imports reached 14.4 billion yuan, up 25.5 percent, according to the General Administration of Customs.