South Korean beauty products remain a hot seller in China, even as missile row simmers
In spite of geopolitical tensions and calls for a consumer boycott, South Korean beauty products maintain double-digit growth momentum in January
Exports of South Korean cosmetics and skincare products to China increased by 87 per cent in January, underscoring the resilience of Korean brands in the eyes of mainland consumers, even as a political row between Seoul and Beijing continues to simmer.
South Korean cosmetics exports to China reached US$151 million in January, up from US$81 million in the same period a year earlier, data from the official Korea Customs Service showed.
Trade between the two nations have been strained since March, when Beijing objected to Seoul’s decision to deploy the US THAAD missile defence system to counter military threats from North Korea.
As geopolitical tensions rose, some groups in China staged online campaigns calling upon consumers to boycott South Korean products.
Beijing also banned packaged tours to South Korea in March, which resulted in a 48.3 per cent on year drop in mainland tourist visits in 2017, according to data from the Bank of Korea, the country’s central bank.
Meanwhile, mainland sales of South Korean cosmetics grew by 23.4 per cent in 2017, compared with 34 per cent growth for 2016, according to figures from Foundation of Korea Cosmetic Industry Institute.
“I think it is fair to say that the longer the THAAD issue continues, the more challenging it is for Korean companies to make their plans targeting Chinese consumers,” said Oliver Matthew, head of Asia consumer research at CLSA.
“Our surveys show Chinese consumers will spend more on cosmetics, and many Korean brands offer differentiation and will still succeed regardless of politics,” Matthew said.
Cosmetic brands ranging from the high-end Amorepacific to the more affordable Clio, have either physical sales counters in Chinese cities, or a strong online presence on e-commerce platforms such as Taobao and JD.com.
“I don’t feel the Thaad row has affected too much of my perception towards [South] Korean products,” said Grace Yang, a thirty-something entrepreneur who operates an education start-up in Beijing.
“I choose to use Korean cosmetics because they offer good value for money,” she said.
China is set to become the world’s largest market for beauty products, according to Morgan Stanley.
The investment bank said companies that offer premium brands via online channels stand to benefit from the mainland’s beauty-product consumption boom.