August 10, 2019 08:28
Japanese cosmetics are surging ahead in the Chinese market as affordable Korean products lose their luster.
According to a report by the International Trade Centre, Japan exported US$770 million worth of cosmetics to China in the first quarter of this year to take the No. 1 spot. Next were France with $730 million and Korea with $720 million. Last year, Korea overtook long-reining market leader France to take the top spot, but now it has slipped to third place.
Japanese cosmetics gained popularity in 2017 amid an unofficial Chinese boycott of Korean goods. Shiseido racked up 1.09 trillion yen in revenues last year, surpassing 1 trillion yen for the second year.
Booming sales in China were largely behind the stellar performance. Shiseido's revenues in China surged 32.3 percent in 2018, and similar results are expected this year. A Shiseido staffer said, "Korean cosmetics quickly respond to consumer needs and trends, but Japanese beauty products are more consistent in terms of quality."
A key example is Korean giant Amore Pacific, whose sales edged up just 0.9 percent last year to W6.32 trillion while operating profit plunged 24 percent to W552.5 billion (US$1=W1,211).
Shiseido and other Japanese cosmetics companies aggressively marketed their products in China and slashed their prices when the popularity of Korean rivals waned and were able to boost their brand awareness. One industry insider said, "Japanese beauty products have become popular among Chinese consumers as replacements for Korean ones."
Buoyed by soaring sale in China, Japanese cosmetics companies are threatening their Korean rivals in other markets. Last year, Korea ranked fifth in the world in terms of cosmetics exports with US$6.3 billion while Japan ranked seventh with $5.2 billion.
But fashion columnist Hwang Eui-gon said, "Just 10 years ago, many Chinese consumers wore no makeup at all, but they have become very sophisticated. New independent and premium brands can breathe new life into the Korean cosmetics industry."
LG Household and Health Care has already launched luxury cosmetics lines like OHUI, Su:m and Whoo and saw sales in China rise 30 percent on-year in the second quarter.
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