Often found at theaters and museums, Kwon Mee-yoo has covered a wide range of cultural fields from K-pop and dramas to theater and fine art for over a decade. Now as K-Culture Desk editor, she tries to connect Korean culture with global readers through fresh perspectives.
Cosmetics importers rip off customers
By Kwon Mee-yoo
Importers of foreign cosmetics brands have been ripping off consumers by raising the prices of products faster than the increase in costs, industry figures show. The high prices have trickled down to domestic beauty products to add assault to shoppers’ injury and raise questions whether the Fair Trade Commission (FTC) has been too lax on its watch.
According to the Korea Food and Drug Administration (KFDA), the price of a 50-milliliter bottle of Estee Lauder Advanced Night Repair cleared at customs is $5.58, or 6,300 won. However, the product was introduced at 155,000 won to consumers, some 20-fold the price at entry.
Other cosmetics also have a large gap between the imported price and the retail price. SK-II Cellumination Essence was imported for 74,000 won ($65.6), but sold at 198,000 won, while Lancome Genifique Eye Cream was imported for 9,000 won ($7.80) and sold at 99,000 won. Sisley's Sisleya Eye and Lip Contour Cream, which is sold at 190,000 won, was imported for 31,000 won ($27).
Civic organizations Consumers Korea compared the prices of 14 major necessities in 18 countries last year. According to the report, the price of a sample skin care product in Korea was ranked fifth among the 18 countries, implying the relatively higher cosmetics price here.
However, cosmetics industry said simply comparing the imported price and retail price is absurd as the final price includes commission for department stores and marketing and advertising expenses.
Estee Lauder said the KFDA data is initially wrong as the price at customs is not necessarily the same as the production cost.
"The price declared at customs is reported by different standards based on each company's policies. Estee Lauder only includes manufacturing cost, shipping and insurance charges and expenses for trademark rights, research and marketing are not covered in the price declared at customs," an Estee Lauder spokeswoman said.
She also said other companies put in additional costs to the cost price at customs and it is not a fair comparison.
Estee Lauder Advanced Night Repair Synchronized Recovery Complex, or simply known as the "Brown Bottle," is not only popular in Korea but a worldwide bestselling item of the cosmetics brand.
Launched in 1982, the serum sold more than 1.6 (??????) bottles last year alone, leading the anti-aging cosmetics market.
The popularity of such steady sellers sparked local low-priced cosmetic brands to embark on aggressive comparative marketing campaigns on the hit items.
Korean cosmetics company Missha launched Night Repair Science Activator Ampoule, an obvious me-too product of Estee Lauder’s Advanced Night Repair, which is priced at 42,000 won, about one third of the Estee Lauder one. Missha pulled the Estee Lauder’s serum into their advertisement, suggesting comparison of the two products.
The local cosmetics brand also launched Time Revolution the First Treatment Essence of 42,000 won, a serum similar to SK-II Pitera SK-II Facial Treatment Essence which is sold at 165,000 won at department stores. With such marketing strategy, the Night Repair Ampoule is currently the most sold product at Missha and more than 400,000 bottles of the First Treatment Essence were sold.
"We launched the campaign to break the prejudice against local low- and middle-priced cosmetics as customers might misunderstand that such brands are poor in quality," a Missha PR person said. "We aim to provide high-functioning cosmetics at reasonable prices."