Seeing a throng of Chinese tourists at duty-free shops in South Korea is nothing new. Chinese demand for makeup products means rising stocks and higher sales, so even smaller companies in the country are cashing in on Korea’s cosmetics cachet now. At some shops, there’s been a 90 percent increase in sales for the Korean brands.
Sansung Life & Science’s facial sheet masks are a huge hit for the relatively small South Korean cosmetics company. Their popularity with Chinese consumers in both South Korea and China has helped rocket their share value up seven times this year.
Daniel Park, the CEO of leaders of Sansung’s cosmetic arm, said they made it to the top of China’s Taobao Mall, even without any traditional advertising.
“In November, for the first time, we ranked first in sales on Taobao Mall’s facial mask section. I believe this achievement is due to our continuous efforts to manage retail stores and focus on boosting online sales,” Park said.
It’s not just Sansung Life & Science that’s cashing in. Cosmetic purchases by Chinese shoppers at this duty free chain has surged by 90 percent this year, driven mainly by South Korean brands.
The number of Chinese visiting South Korea has more than doubled in the last four years, tallying up to 4.7 million so far this year.
While some analysts warned of stretched valuations, cosmetic analyst Yang Jihye said market share of these brands in China is still low, meaning there’s plenty of room to expand.
“It may be a concern to see shares of cosmetics brands spike up in such a short period of time in recent months, but these companies are showing great results on par with those valuations, and there’s still a lot of room for growth especially in China’s domestic market,” Yang said.
With the soon-to-come free trade pact between Beijing and Seoul, lower tariffs and regulation barriers add to a promising future for South Korean cosmetics brands in the coming years.
CCTV America’s U-Jean Jung reported this story from Seoul.