Face masks are latest casualties of China-South Korea row

PUBLISHED : Friday, 16 June, 2017, 8:01am
UPDATED : Friday, 16 June, 2017, 8:00am

Sa Sa International Holdings, Hong Kong’s biggest cosmetics seller, said the China-South Korea diplomatic row over a US-backed missile defence system had hampered sales of its Korean facial masks, once immensely popular among K-pop obsessed Chinese millennials.

“We therefore had to readjust our offerings by adding Taiwanese and Japanese masks,” said Simon Kwok Siu-ming, chairman of Sa Sa, in a post-earnings press conference.

It is the latest sign that China’s retaliation against Seoul’s planned deployment of THAAD missile shield has dealt a crushing blow even to retailers outside the territories involved in the dispute.

Since March, a coordinated boycott campaign of South Korean goods in China has already knocked tens of millions of dollars off the market value of Korea’s largest listed retail conglomerates, including Lotte Shopping and Laneige-owner AmorePacific Corp.

But it is the first time a Hong Kong retailer has signalled that it had felt the chill.

As Korean dramas and K-pop stars, from Descendants of the Sun to Jun Ji-hyun and Song Joong-ki, took Asia by storm, Chinese consumers also scrambled to snap up everything Korean, from Sulwhasoo face creams to Etude House lipsticks.

Sa Sa, which counts mainland tourists as a key customer group, was one of the biggest Asian beauty-product chains that has been riding on this wave since 2013, bringing in a wide range of Korean beauty products.

China-South Korea row over missile defence seen as potential boon for Hong Kong retailers

It also signed a pact with Korean skincare brand Beyond endorsed by Korean heartthrob Kim Soo-hyun. The My Love from the Star star was also later invited to meet Hong Kong fans in sessions organised by Sa Sa.

Facial masks are a well sought after skin care category because of their affordable prices and rich offerings, ranging from Innisfree’s green tea moisturising to Laneige’s aloe gel soothing masks.

Although Kwok acknowledged the recent setback resulting from the China-South Korean spat, he expected the popularity of K-pop to help regain sales going forward.

Aimed at protecting South Korea from potential missile strikes by North Korea, THAAD’s radar can detect aircraft movements inside China, which Beijing considers a threat as Chinese military secrets could be exposed.

The current boycott campaign in China against Korean products and services was first spearheaded by mainland state media but later widened to the country’s consumers and the business community.

The public backlash has escalated to a level where Lotte, the conglomerate that had agreed to supply land to host THAAD, was forced to shut down all its supermarkets in China.