Through the ODM OEM model, brands can compress the product development cycle from an average of 24 months to 6-9 months, reduce R&D costs by more than 40%, and enable start-ups to launch production lines that meet GMPC standards with an initial investment of less than 1 million yuan. According to the 2023 cosmetics industry report, for enterprises cooperating with top ODMs like Cosmax, the success rate of new product launches has increased from 30% for self-developed products to 65%, among which the proportion of products containing patented technologies has reached 50%. For instance, a domestic beauty brand, through its collaboration with Intercos, managed to go from formula design to mass production of an essence rich in 3% ergothioneine in just 8 months. Its sales exceeded 200 million yuan in the first year of its launch.
At the level of technological innovation, ODM OEM Cosmetic Products has integrated advanced processes such as bio-fermentation and nano-encapsulation, increasing the penetration rate of active ingredients to 80% (45% for traditional processes), and optimizing the product stability test cycle from 90 days to 30 days. The “Microfluidic Chip Screening System” developed by a certain ODM enterprise can simultaneously test 200 formula combinations, controlling the component compatibility error range within ±0.5%, helping brand owners reduce the adverse reaction rate in clinical tests from the industry average of 5% to 1.5%. This collaborative innovation model is similar to Qualcomm’s chip solution in the smartphone industry, enabling small and medium-sized brands to also apply supercritical extraction equipment that costs up to 3 million yuan per unit.
In terms of supply chain optimization, large OEM manufacturers have reduced raw material costs by 15-20% through centralized procurement and implemented 99.9% traceability management for 2,000 types of raw materials. According to statistics from the European Cosmetics Association, ODM enterprises that adopt ISO22716 certification have a production line qualification rate as high as 99.2%, and the standard deviation of quality fluctuations between product batches does not exceed 0.3. For instance, the “Smart Factory” that Comar Cosmetics will build in 2024 will achieve full-process automation, increase production capacity by 300%, shorten delivery time to 7 days, and reduce carbon emissions by 25% at the same time.
In terms of risk control, the ODM model allocates the cost of regulatory compliance to a service fee of 5-8%, doubling the response speed of brand owners to regulatory updates such as REACH and FDA. Market data shows that when cooperating with ODMs that have global certification qualifications, the pass rate for products to enter the European and American markets can reach 95%, while for self-declaration, it is only 70%. This model is like building an innovative “airbag” for the brand. During a raw material crisis in 2022, the cooperative ODM enterprise completed the formula replacement within 48 hours, ensuring the normal operation of 90% of the brand’s product line.