SEOUL, March 31 (Korea Bizwire) – The head of AmorePacific Co., South Korea’s top cosmetic company, has reaffirmed his commitment to the Chinese market, seeing further room for growth in the rising middle-class consumers there, the firm said Thursday.
AmorePacific has shown stellar performance in China with a range of luxury and low-end brands, thanks to the rising popularity of Korean drama and pop. It logged 5.66 trillion won (US$4.93 billion) in sales last year, up 20.1 percent from a year ago.
“By 2020, the middle class population is expected to reach 500 million, and its size and influence will greatly expand in the next decade,” AmorePacific CEO Suh Kyung-bae was quoted as saying during a monthly meeting with senior officials earlier this month.’
While Beijing has applied non-tariff barriers, such as those on ingredients and the approval of foreign brands, Suh expects the focus of regulations will move to distribution to curb counterfeit items and the grey market.
“However, the tightened retail regulations will have a limited impact on companies that have already established distribution channels in the Chinese market,” Suh said.
While fledgling cosmetics producers have bloomed over the past years, Suh expects it will take time for them to match the level of its technology and brand power.
“We will have to keep an eye on the growth of emerging local companies, but brand power is not something they can get in a short period of time,” he said.