Kolmar Korea Co., South Korea’s leading cosmetics original design manufacturing (ODM) company, aims to boost its sales in China to about 200 billion won ($173 million) by 2019 with the opening of its factory in Wuxi, currently under construction, by offering products specifically tailored to needs of the customers in the world’s second largest economy, said Choi Hyeon-gyu, Kolmar Korea Co.’s President managing the company’s Chinese operation.

Choi revealed the company’s bold plan despite growing antagonism against Korean products in China following the Korean government’s decision to deploy the U.S. Terminal high Altitude Area Defense (THAAD) antimissile battery.

Kolmar Beijing, the company`s Beijing operation, reached the break-even point in just two years since its foundation. Its sales grew rapidly from 17.9 billion won in 2014, 37 billion won in 2015 and 55.6 billion won in 2016, according to the company.

The company credited its efforts to develop products based on the needs of local consumers and their preferences for its strong sales in China. “We studied Chinese customers thoroughly last year and found out that they think efficacy, quality and brand as the most important things when buying cosmetics,” said Choi. “They check how a brand differentiates itself from others and which ingredients are used in certain cosmetics products.”

Kolmar Korea also noticed that companies responding rapidly to the rising demand for baby and maternity products made of natural ingredients are showing remarkable growth in China. While multinational companies are concentrating on first-tier cities like Beijing and Shanghai, local firms such as Jala Group, Shanghai Jahwa Unitied Co. and Proya Cosmetics Co. are turning their eyes to second-tier cities and below.

“All of the popular local brands in China focus on natural ingredients such as oriental medicines to win the hearts of the local customers who prefer healthy products,” said Choi. “We are also closely monitoring the rising demand for anti-aging and make-up products as Chinese born in the 1980s and 1990s are emerging as main customers in the market,” he added.

Kolmar Korea is redoubling its efforts to localize the products to attract more Chinese customers amid growing business risks for Korean companies in China following Beijing’s economic bombardment in retaliation of Seoul’s decision to deploy THAAD U.S. antimissile system. Last week, Korea’s fifth largest conglomerate Lotte Group finally signed a deal with the Korean government to allow its land to be used as the site for the antimissile system, leading China to threat to boycott Korean products or services.

Kolmar Beijing applies outstanding technologies developed in Korea with its 30 or more research and development talents dispatched from Kolmar Korea. Kolmar Korea also emphasized that it is trying to differentiate itself from other ODM rivals in China by holding a presentation session on the industry trends twice a year and a technology conference in Beijing to help local customers to develop new products reflecting the changing trend.

By Lee Young-wook

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