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Have money to last 3 yrs, edge to last five yrs to survive in China: Cosmax CEO

Collected: 2016.06.30

Distributed: 2016.07.01

Source: Go Direct

[Choi Kyung, CEO of Cosmax China Inc.]

Choi Kyung, CEO of Cosmax China Inc. a subsidiary of South Korea’s original development manufacturing (ODM) cosmetics manufacturer, advised Korean companies against venturing into China unless they have the affordability and stomach to withstand money-losing for the first three years.

Addressing the Business Dream Forum held at the Westin Chosun Hotel in Seoul on Tuesday, Choi said beyond that, a company must have a product and technology edge to stay ahead in the competition for at least five years. The corporate owner must oversee the business in China and familiarize with the business environment there.

Consumer goods companies should be based in Shanhai, basic industries in Beijing and the rest in inland areas, he said. Cool-headedness and thorough preparation is the key to survive in Chinese business, he added.

Sales of Cosmax surged to 215.2 billion won ($814 million) from 1.5 billion won in 2006 after making a debut in China in 2004. The company has grown by more than 40 percent for the 11th straight year and aims to record 300 billion won in sales this year. Thanks to the successful business in the Chinese market, Cosmax has become the biggest cosmetics ODM company in the world.

“Cosmax’s competitiveness and expertise, the soaring popularity of the Korean culture and the owner’s perseverance are the factors behind the company’s success in the Chinese market,” said Choi. Rather than waiting for an opportunity, one should go out himself to find opportunities by making efforts to understand the culture and maintain good relationships with local people. “The Chinese market is so vast and various, so you should target a specific area with clear goals when making inroads,” he added.

By Chung Soon-woo and Ahn Gab-seong

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