Park Jae-hyuk is a seasoned journalist who has provided comprehensive coverage of South Korea's corporate dynamics, economic policies, industry challenges and the global positioning of Korean companies. Based on the articles he has written since joining The Korea Times in 2016, his investigative approach has helped readers understand corporate governance, economic trends and business strategies shaping South Korea’s economy.
K-beauty withstands THAAD row
By Park Jae-hyuk
Chinese consumers still prefer Korean cosmetics despite the Chinese government’s retaliatory measures against Korean products over the deployment of a U.S. anti-missile system here.
Korea Customs Service (KCS) data showed Thursday that Korea’s exports of beauty products to the world’s most populous country have continued to rise as of the first quarter of this year.
Exports of Korean cosmetics to China marked $337 million over the past three months, up 26.9 percent from the same period in the previous year. As the largest importer of Korean cosmetics since 2000, China occupied a 36 percent share of Korea’s total exports of cosmetics to the world.
“The Chinese government cut the consumption tax on luxury cosmetics from 30 to 15 percent last October,” a KCS official said. “The rising popularity of functional cosmetics there positively influenced exports of Korean cosmetics to China as well.”
Korea Trade-Investment Promotion Agency (KOTRA) data also supports the idea of the continuous K-beauty fever in China.
According to KOTRA’s Beijing office, Thursday, Korean products enjoyed the third-largest popularity among Chinese online consumers at Tmall Global, China’s biggest platform for direct overseas purchases.
As of last year, Korean products accounted for 13.6 percent of sales on the platform after Japanese products with 19.3 percent and U.S. products with 18.3 percent. Germany and Australia, which ranked fourth and fifth, respectively only took an 8 percent and 7.9 percent shares, respectively, far below those of top three.
In particular, Chinese consumers prefer Korean cosmetics to those of Japan or the U.S. They used to buy Korean-made cosmetics, clothes, dietary supplements and women’s products through Tmall Global.
Instead, they preferred Japanese products when they bought skincare products, diapers and childcare products, and preferred the U.S. products when they bought health supplements, milk powder, snacks and bags.
“Among the cosmetics products, Korea dominates the color cosmetics market,” a KOTRA official said. “Because Korean-made female clothes have also gained popularity in China, the Korean wave seems to influence the trend.”
Since the Chinese customs authority unveiled statistics of disqualified Korean cosmetics products early this year, Korean cosmetics manufacturers have worried about plunging sales in China. At that time, 19 out of 28 disqualified cosmetics products were made-in-Korea.
Some industry officials, however, expect Korean companies will enhance their competitiveness, because only qualified makers, such as AmorePacific and LG Household & Healthcare, will be able to survive in the current crisis.
KB Investment & Securities estimated that AmorePacific’s Chinese subsidiary will post 346.1 billion won ($303 million) of sales in the first quarter, up 28 percent year-on-year, and its Q2 sales will also rise 17 percent from the previous year.
Eugene Investment & Securities also expects Korea’s largest cosmetics firm would see its sales in Asian countries rise by 27.2 percent in the first quarter from a year ago and the increase would reach 29 percent in the second quarter.