Cosmetics exporters get offered a helping handOSONG, North Chungcheong - Cosmetics exporters in North Chungcheong were offered a helping hand on Thursday in the first round of a new initiative aimed at boosting exports in a difficult global market.
As export figures continue to fall, hit by a weakening economy and market uncertainties thanks to the prolonged trade war between the United States and China, 10 local trade-related institutions teamed up to launch a program to boost exports in different sectors. Thursday’s event in North Chungcheong was the new initiative’s first proper outing.
The program consists of two main parts: matching exporters with representatives in trade-related institutions and discussing key difficulties with senior officials.
In step one, institutions like the Korea International Trade Association (KITA) and Korea Trade-Investment Promotion Agency will offer one-on-one consulting so that companies can ask questions specific to their businesses.
Step two will involve meetings between exporters and high-level officials from the institutions to discuss resolving key issues facing the industry - in the North Chungcheong case, cosmetics - is facing as a whole.
“I came today to meet with the Korea Trade Insurance Association and the Export-Import Bank of Korea to ask about ways to get financing,” said Kim Hoi-ki, president and CEO of FanipinKorea, a cosmetics export company founded in 2006, during an interview with the Korea JoongAng Daily on the sidelines of Thursday’s consulting program in Osong.
The company already exports cosmetics, including sheet masks, to various markets such as Russia, Vietnam and North America, both through direct sales and as a supplier to larger companies like LG Household & Healthcare. But it still struggles to secure the budget to purchase raw materials, Kim said.
“I need to get guarantees from financial institutions for lending, but they always ask for a certain level of past export records and fixed contracts for future exports. If we had those documents, lending wouldn’t be a problem in the first place,” Kim said. “We have exports, but the problem is we are struggling to go beyond a certain export figure, and for a breakthrough … we need investment.”
A representative from Beautee Collagen, founded in 1999, came to the event to ask the government whether it can change the policy on what needs to be stated on cosmetics packaging and to make suggestions on cosmetics export strategies.
“Currently we have to reveal the original equipment manufacturers, but that actually has caused problems for final product exporters,” said Lee Kyoung-sook, managing director of Beautee Collagen.
“While final product sellers have invested a lot of our money and time in building up brand recognition - Chinese companies now directly contact local original equipment manufacturers so they can make their own brands.”
Lee also said that the Korean government and cosmetics companies should focus on building signature Korean brands, rather than just expanding sales, pointing out that while Japanese companies built up a global premium brand like “Shiseido,” different Korean companies have been busy selling products like sheet masks.
“I’m going to address some of these problems at the discussion session,” said Lee, who was one of the industry representatives selected to participate in the meeting with the senior officials from trade organizations.
According to Daniel Kweon, director of the trade policy department at KITA, the major goal of the program is to “listen more carefully to industry players’ actual needs and make changes, if possible, to improve overall export figures.”
Kweon said that while a similar program was held in the first quarter this year, participated in by some 1,994 companies, it had its limitations because each round was not held specifically for one business sector. The new program will run through October in some 40 rounds, this time gathering companies from related business sectors each time for more intensive consulting.
The reason the cosmetics sector was chosen first is because it has great growth potential, according to an official from the Ministry of Trade, Industry and Energy, which is one of the event’s hosts.
According to data from the Korea Cosmetic Association, Korean cosmetic companies exported $6.26 billion last year, accounting for roughly 6.5 percent of last year’s trade surplus.
BY KIM JEE-HEE [firstname.lastname@example.org]