Cosmetics exports up 32 percent, surpassing imports for 1st time
By Park Jin-hai
For the first time Korea exported more cosmetics products than were imported – thought to be thanks to the growing popularity of "hallyu" (Korean wave), coupled with efficient marketing strategies.
Exports of cosmetic brands stood at $1.1 billion in 2012, up by 32.6 percent from a year earlier, while imports remained at $978 million, according to the Korea Pharmaceutical Traders Association (KPTA).
Amore Pacific, LG Household and Healthcare and Missha proved especially strong in oversea markets.
Amore's exports grew 35 percent to reach $442.8 million from the previous year, quadruple the domestic sales.
LG Household saw its overseas sales grow 31.4 percent, to $232.3 million, while Missha's exports rose 32 percent to the value of 28.3 billion dollars.
Market analysts attributed the better-than-expected results to several factors: localization, distribution, brand-image and market diversification strategies.
An increasing number of exporting companies, based on the thorough analysis of local markets, now localize their products.
Oftentimes products reflect the local customers' needs as early on as during product development.
When Amore's Mamonde rolled out its "Age control ultra repair cream," it had Chinese customers in mind from the inception.
Unlike other products that replicate domestic success overseas, it made a debut in the Korean market following the brisk sales it enjoyed overseas.
Laneige's "Water sleeping pack," an overnight moisturizing pack, for instance, caters to the specific needs of Hong Kong citizens whose skin gets extra dry due to the hot-and-humid weather and frequent use of air-conditioning.
LG Household's Ohui brand markets sun-block products that can be applied over and over in Vietnam, where people are exposed to strong sun-rays.
Another of its brands, Beyond, plans to pitch its moistening and anti-aging products in normally cold Mongolia, while it will sell whitening products in Myanmar.
Another factor that induces upward sales of Korean beauty products is a new distribution strategy.
Cosmetics companies now join hands with local distributors to expand their marketing base.
Mamonde, who works with Chinese local distributers, secured 900 outlets in department stores and 2,500 individual shops that sell their products throughout China.
The Face Shop gets help from Japan's AEON, and aims to expand its shops from the current 800 to more than 1,000 next year.
Beyond also works with SASA of Hong Kong and Megumi of Russia.
As much as or more important is to have a high-end brand image.
Cosmetic brand Whoo is a fine example of what such a high profile product image can do. Its overseas sales in department stores in Vietnam overtook those of Lancome and Shiseido.
"We tried to imprint our image as a royal product that blends traditional and medicinal ingredients to differentiate it," said a manager of Whoo.
If in the past, companies eyed just some Asian and Western countries, now they literally go global.
Missha has made inroads into as many as 31 countries including Dubai, Rumania and Brunei, while LG Household ventured to the U.K. with its herbal cosmetic brand "belif," and is on its way to include Saudi Arabia, the U.A.E. and Australia on its exporters list.