By Bae Ji-sook,
korea’s trade surplus in cosmetics marked $1.2 billion in 2015, its highest ever, the korea Customs Service said Wednesday.
The growing popularity of Korean beauty products accros Asia, especially in China, was the main engine behind the phenomenal success, and the governmene and more companies are rushing to join one of the country’s few remaining profitable business areas.
According to customs authorities, Korea exported a toatl of $2.93 billion of cosmetics goods in 2015 and the related trade surplus is thought to be worth $1.2 billion, surpassing $1 billion for the first time. What is more notable is that it was only in 2014 that Korea’s trade in cosmetics broke even and marked a surplus of $225 million.
“The trade surplus in K-beauty products jumped by nearly fivefold in a year. Considering the fact that Korea’s trade volue sat at $963.0 billion last year and missed the $1 trillion-line for the fisrt time in four years, the succes is even more remarkable,” a KCS official said.
The biggest contributor to the industry’s success is the Chinese market, which imported $11.9 billion of beauty product from Korea, or 40.9 percent of the total, followed by Hong Kong, with $681 million.
The authorities expect that the Korea-China free trade agreement, which came into effect in late 2015, would see trade grow yet more in the future.
The government has recently announced the creation of a 4 trillion won-fund to support consumer goods industries, mainly fashion, beauty and food-makers targetting China. The Ministry of Food and Drug Safety vowed to readjust regulations to meetglobal standards in accreditation or approval of such products to add more credibility when exporting.
Cosmetics makers are fine-tuning their strategies too.
AmorePacific is expecting to generate 3.3 trillion won in sales in China 2020, and has announced that its main brands Sulwhasoo, etude,Mamonde, Innisfree and other will tailor their marketing and sales strategies to Chinese consumers.
LG household and health Care has classified its products into preium and luxury lines to cope with differentcustomers in China, while It’s Skin is rumored to be in talks to aquire a European makeup brand to target the Chinese market.
“Korean beauty firms have managed to mark in 80 percent growth in the third quarter of 2015compared to the same period 0g 2014. Similar growth is expected for this year,” said Lee Dal-mi, analyst at Hyundai Securities.
Source : The Korea Herald Newspaper; January 07, 2016