South Korea's cosmetics industry saw its exports rise by more than 40 percent last year in large part thanks to Chinese consumers' bigger spending power and their increasing interests in grooming and beauty products, industry experts said Sunday.
According to data from the Korea International Trade Association, exports of skincare and makeup products amounted to
US$3.97 billion last year, up 44.3 percent from US$2.75 billion.
The number doubled from the 2014 figure of US$1.79 billion. Among the export countries, China took up 36.5 percent with US$1.45 billion.
The growth occurred amid not-so-favorable market conditions, such as rising diplomatic tension with China over a missile shield and a global economic slowdown.
The performance of individual cosmetics companies confirms the industrywide boom.
LG Household & Health Care Ltd. recorded the best performance last year due to strong growth in the cosmetics sector. Sales came to 6.9 trillion won, operating profits to 880 billion won and net profits to 579 billion won, which went up by 14.4 percent, 28.8 percent and 23.1 percent, respectively, from a year ago. Cosmetics sales, in particular, amounted to 3.1 trillion won and operating profits to 578 billion won, jumping by 24.6 percent and 42.9 percent, respectively, compared with the previous year.
"In China, premium products are becoming more popular as more women have bigger spending power. Our marketing strategy tailored to the group turned out to be successful," an official from the company told Yonhap News Agency.
The company plans to expand the number of stores in China and make a bigger push in the Southeast Asian market this year.
South Korean securities firms expect AmorePacific, the country's biggest cosmetics company, to release a better performance report than the one the previous year. The report is expected to come out on Feb. 3.
Late last year, the company made inroads into the Middle East market by partnering with Alshaya Group, one of the largest retailers in the region. It aims to open the first store for the color cosmetics brand Etude House in Dubai in the second half of this year.
"The Chinese are getting increasingly interested in maintaining health and beauty as their income rises. The trend pushes the cosmetics market to grow further," an official from the Ministry of Health and Welfare told Yonhap.
"That China has revised the consumption tax to pump up domestic consumption, and there hasn't been any visible retaliatory actions against South Korean cosmetics companies have had a positive impact on South Korean cosmetics exports," the official said.
While cosmetics exports to China have exponentially grown in the last 4-5 years and some are concerned the growth might soon reach its limit, the official said, "As of 2015, Korean cosmetics took up only 2 percent of the Chinese cosmetics market so there is still room to grow."