Beauty products, food defy plunge in exportsDespite exports plunging in October to the lowest level since the 2009 financial crisis, some Korean products are showing substantial double-digit sales growth overseas.
According to the Korea Chamber of Commerce & Industry on Monday, 175 beauty, food and electronics products showed a growth of at least 5 percent in the first nine months of this year, while the export of 730 products shrank by an average 6.6 percent.
Overseas shipments of K-beauty products shot up an average 53 percent from January to September this year, compared to the same period last year. Shampoos and rinse products saw the largest sales growth by 74 percent, followed by skin makeup products, such as Cushion products (65 percent), soap (61.2 percent), eye makeup (36.9 percent) and lipstick (30.9 percent).
Korean beauty products still account for a small portion of total exports, compared to products such as cars, steel, vessels and smartphones.
However, following the success of AmorePacific’s Cushion foundation products since its debut in 2008, Korean beauty product shipments grew 124.4 percent over the past three years to post $1.79 billion last year, compared to only $790 million in 2011.
Experts say the business strategy of product differentiation was the key to success. Korean cosmetics makers have mainly been focusing their export business on facial makeup and skincare products - such as Cushion foundation, BB cream and facial mask packs - instead of color cosmetics products, where European companies are dominant in the global market.
“The product design was another factor to success, such as gold-colored packaging for Chinese consumers and syringe-shaped facial masks’ packaging,” said Song Back-hoon, a professor at Sungshin Women’s University.
Shipments of K-food goods jumped an average 24.2 percent, overcoming the image of being expensive by gaining the consumers’ trust with quality.
Powdered milk for infants saw the largest sales growth at 38 percent, followed by Korean beef (36 percent), cigarettes (35 percent), seaweed (16 percent), Korean beer (15 percent) and milk (13 percent).
Korean powdered milk has slowly gained popularity since the 2008 Chinese milk scandal and has seen sales grow by 190 percent over the past three years, from $37 million in 2011 to $170 million last year.
“China’s recent announcement to allow two children per household will open doors for Korean companies to target Chinese infant, children and teenager-related industries,” said Jo Seong-hun, a professor of Yonsei University. “Korean industries should gear themselves not only with baby products but also education services and products.”
Korean beer has recently gained sales in Mongolia, Hong Kong, the United States, Australia, China and Iraq, leading to quadrupled export sales compared to seven years ago.
Korean brand electronics products saw an average 24.1 percent growth, thanks to rising sales of televisions and cameras (65 percent), camcorders (33 percent), smartphones (29 percent), software (11 percent) and rice cookers (10 percent).
BY KIM JI-YOON [firstname.lastname@example.org]