Korea recorded its highest-ever trade surplus in cosmetics at $1.2 billion in 2015, the Korea Customs Service said Wednesday.
The growing popularity of Korean beauty products across Asia, especially in China, was the main engine behind the phenomenal success, and the government and more companies are rushing to boost one of the country’s few remaining profitable business sectors.
According to customs authorities, Korea exported a total of $2.93 billion of cosmetics goods in 2015 with the trade surplus surpassing $1 billion for the first time. What is more notable is that it was only in 2014 that Korea could manage a trade surplus in cosmetics ― of $225 million.
“The trade surplus in K-beauty products jumped by nearly fivefold in a year. Considering the fact that Korea’s trade volume was $963.9 billion last year and missed the $1 trillion-line for the first time in four years, the success is even more remarkable,” a KCS official said.
The biggest contributor to the industry’s success is the Chinese market, which imported $11.9 billion of beauty products from Korea, or 40.9 percent of the total, followed by Hong Kong with $681 million.
|Chinese tourists browse cosmetics products in a duty-free shop in Seoul. (Yonhap)|
The authorities expect that the Korea-China free trade agreement, which came into effect in late 2015, would see trade grow even more in the future. The government has recently announced the creation of a 4 trillion won-fund to support consumer goods industries, mainly fashion, beauty and food-makers targeting China. The Ministry of Food and Drug Safety vowed to readjust regulations to meet global standards in accreditation or approval of such products to add more credibility when exporting.
Cosmetics makers too are fine-tuning their strategies.
AmorePacific is expecting to generate 3.3 trillion won in sales in China by 2020, and has announced that its main brands Sulwhasoo, Etude, Mamonde, Innisfree and others will tailor their marketing and sales strategies to Chinese consumers.
LG Household & Health Care has classified its products into premium and luxury lines to cope with different customers in China, while It’s Skin is rumored to be in talks to acquire a European makeup brand to target the Chinese market.
“Korean beauty firms have managed to register 80 percent growth in the third quarter of 2015 compared to the same period in 2014. Similar growth is expected this year,” said Lee Dal-mi, analyst at Hyundai Securities.