Influx of Chinese cosmetics irks Koreans
Insider cites that ‘Koreans still have negative perceptions of Chinese products in terms of sanitation, so Chinese cosmetics firms seem unlikely to gain popularity in a short time’
By Park Jae-hyuk
Chinese cosmetics firms, which have recently started to expand their presence here, failed to get a warm welcome from Korean consumers, amid allegations of their exploiting Korea’s cosmetics market.
According to industry sources, several Chinese cosmetics companies plan to open subsidiaries, production plants and flagship stores in Korea, diverging from their former strategy of acquiring shares in Korean cosmetics companies.
Quanjian Group, for example, has recently recruited Korean employees to open a flagship store for its brand OMM in Myeong-dong, downtown Seoul, Korea’s most popular place for shopping, by the middle of this month.
The Chinese cosmetics and health supplements manufacturer had signed a supply agreement worth 72 billion won (US$60 million) with local cosmetics maker Kolmar Korea in November 2015 and set up its Korean subsidiary last July.
The firm that posted 1.7 trillion won (US$1,411,459,000) in annual sales in China reportedly said it wants to know whether its brand can succeed in the centre of the Asian beauty market and the most popular place for foreign tourists, according to Chinese media.
Proya Cosmetics, China’s fifth-largest cosmetics maker that posted 800 billion won (US$664,304,000) in annual sales, also seeks to launch a new brand here, after establishing a joint venture Hapsode in 2015.
Although the cosmetics firm has yet to open a flagship store in Korea, industry sources expect this to change soon.
However, Korean consumers seem unlikely to buy products of Chinese firms amid Beijing’s intensifying retaliation against Korean cosmetics firms because of Seoul’s decision to deploy a U.S. Terminal High Altitude Area Defense (THAAD) battery here.
“China is blocking Korean products for any reason,” an internet user said, “but Korea is allowing the imports of Chinese products too easily.”
Korean cosmetics makers in China have been enforced by the Chinese government to use Chinese celebrities in commercials instead of Koreans, although they are not speaking openly about it.
A cosmetics industry source said, “Koreans still have negative perceptions of Chinese products in terms of sanitation, so Chinese cosmetics firms seem unlikely to gain popularity in a short time.”
Observers point out that the hidden goal of Chinese cosmetics firms is winning fame among Korean consumers so they can sell their products in their domestic market, which is more lucrative than Korea’s.
For instance, New Life Group, which decided to build a massive manufacturing facility in North Gyeongsang Province, reportedly plans to export its skincare brand Neobeau as a Made-in-Korea brand.