China and South Korea edge forward with free trade talks
The talks on free trade between the two countries were first started in May 2012, and so far there have been 11 formal discussions, with the 12th round expected to take place later this month.
One area of business that is expected to be pushed particularly hard by the South Korean representatives is the country’s cosmetics and personal sector.
South Korean beauty products have already proved to be a big hit with Chinese consumers, who see the products as cutting edge, fashionable and high quality; although good value for money does not really feature as a selling point.
Targeting lower trade tariffs
That is because, under current trading regulations with China, South Korean beauty products are hits with a tariff as high as 130%, putting them very much in the luxury and prestige end of the retail spectrum.
However, if lobbying from the South Korean industry is successful, as part of the free trade pact, players such as Amore Pacific, The Face Shop and LG Household & Health Care, will be looking to ensure that their products can be marketed in China without a far lower tariff, possibly even zero.
In recent years a huge influx of tourism from mainland China to South Korea has helped to raise the profile of many of the country’s consumer brands amongst Chinese consumers, with many putting shopping for cosmetics and other consumers goods at the top of their to do list.
Chinese consumers scramble for Korean cosmetics
Chinese consumers show great enthusiasm for Korean brands, with recent research carried out by the Seoul Business Agency showing that those aged 20 to 40 give Korean cosmetic and personal care products a 90% approval rating.
Indeed, cosmetics exports from Korea topped $288 million during the first quarter of this year, which is a rise of almost 25% percent from the same period a year earlier.
In particular, Amorepacfic has been a major success story over in China since it began its major push to court consumers there in 2011 with its Laneige brand. It has says it is confident of reaching its $626 million sales target there by the end of 2015.
