Cosmax Inc., South Korea`s largest cosmetics original development manufacturer (ODM), has joined hands with China’s largest online retailer Alibaba Group Holding to establish an e-commerce platform to distribute Korean beauty products across China, a move that is expected to further boost sales of Korean brands’ cosmetics in the country where demand for Korean-made beauty products is high.

Cosmax said Tuesday it signed an agreement to operate an online flagship store on Chinese business-to-consumer platform Tmall.com, a spinoff of Alibaba.

Under the contract, Cosmax will play as a multi-shop operator to deal with various cosmetics brands on Tmall.com. Tmall, the largest third-party platform for brands and retailers in China, runs the domestic online mall, Tmall.com, separately from its international online mall, Tmall.hk, and most of Chinese consumers visit the domestic mall to shop online. Cosmax became the first Korean multi-shop operator on Tmall.com.

Cosmax’s Tmall platform is expected to bring about changes to ways of doing business for Korean cosmetics companies in China. To meet the rapidly growing demand for Korean beauty products in China, many Korean cosmetics manufacturers have rushed to export their products to China, but they have mostly relied on local, individual traders to sell their products in the country without the official clearance process that is demanding and time consuming.

But the upcoming launch of Cosmax’s Tmall platform is expected to help expedite the China Food and Drug Administration’s (CFDA) hygiene approval process for Korean cosmetics companies, especially for those who will sell their beauty products at the Cosmax mall, allowing a further increase in exports of Korean cosmetics to China.

Cosmax, which made a foray into China in 2003, currently runs cosmetics factories in Shanghai and Guangzhou. It raked in more than 200 billion won ($181.1 million) in China alone last year and expects its revenue to hit 1 trillion won this year, driven by its fast-growing business in China.

By Chung Soon-woo

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