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Chinese Ban Korea : A Pinch For Cosmetic Industry

korea China is the significant export market for the Korean companies whether they relate to the makeup or media fraternity. However, the recent ostensible ban imposed by the Chinese government on the import of Korean culture products including TV series, entertainment shows, and films into the China, induce a suffering for the companies in the south-Korea. The prohibition took as a reaction from the Chinese authorities to the announcement made by the government of South Korea. In the decision mentioned above the Korean government show the intention to deploy US-led THAAD system in the peninsula.THAADAfter that news cleavage, the Chinese government shows its solicitude on the plausible deployment of the missiles and in this regard according to the reports the Chinese state ordered the state-run broadcasting mediums not to air any Korean manufacturing. However, this ban causes a steep fall in the share of the various major entertainment agencies as well as many reputable Korean cosmetic companies.

As the leading entertainment agency, YG Entertainment suffers a falls of 6.9 percent which is the lowest most of this year

However, the next day company recovers .38 points. This plunge was the result of the declaration made by the Geun-Hye Establishment that it choose the Seongiu County, to be the expected location for the THAAD battery. On July 12, YG shares were close at 39150 won, but on the next morning, they dipped into 38,000 won ground after the decision for deployment made. The deterioration in the share market keeps its pace until it shattered down on 26th of October.

Moreover, the shares of another movie and variety show exporting company, CJ E & M, falls by a drastic 6.77 to 60,600 on Monday morning while following 59,500 won, a fall of 1.82 percent on Tuesday

YG1

Cosmetic industry also felt freeze due to this political actions by governments

However, the entertainment sector is not the only one who is facing the wrath of Beijing, also due to this embargo on the Korean show stars the makeup industry of South Korea is also sensing the anxiety. As most of the cosmetic manufactured in South Korea associated with the performers of the media industry, so the freeze felt by the cosmetic industry is expected.

No company can have the approval to work in China within one year of its filing of the application

According to the law, every export company in Korea must attain a certificate from the Chinese Food and Drug Administration, which they are not using prohibited chemical in the manufacturing. Moreover, no company can have the approval to work in China within one year of its filing of the application. Many of the cosmetic companies are delaying their deals with the Korean makeup producers regarding the pressure build up between both the governments.

Korean cosmetics industry became popular in China was thank to Korean entertainments

The primary cause behind this marketing drop of the Korean products is that these commodities became popular due to the dramas and the entertainment shows according to a source so now they do not gain that kind of exposure and resultantly their trade is dropping.

According to Kim Jin-Seok, who is a local merchant of Korean makeup, the established brands are not in as much critical shape as the newcomers are

Moreover, according to the spokesperson of the Amorepacific, which is the country’s largest cosmetic group, although it is a fact that the Korean dramas and shows are the central source of promotion of Korean products however the transactions of the Amorepacific did not get hurt in China. As the publicity depends on reliability and trust as well and the drop in the stock prices is not related to it.

AmorePacific faces this difficult as well

Beautifying agents offers have been falling in the midst of the expanding pressure. AmorePacific, the nation’s top makeup producer, shut down at 293,500 won (US$246), Tuesday, down 1.68 for every penny.

The stock dropped significant 

The stock has lost around 60 for every penny in incentive since last July when Korea and the United States reported arrangements to introduce the U.S. rocket framework. Kolmar Korea likewise tumbled to its most reduced level in a year shutting down at 59,200 won (US$50), contrasted with 110,000 won (US$92) in July. Different beautifying agents stocks likewise stayed feeble on the bourse as of late.

NH Investment Securities do not think they need to worry about it

Mirroring the worry, NH Investment Securities as of late cut the working wage development evaluate for five noteworthy beauty care products firms to 12 for each penny from the past 16 for every penny.  Notwithstanding, a few investigators say that the stocks are probably going to bounce back.

Some investigators do not think people need to worry about it as well

“The issue of THAAD is probably going to be overcome inside a year. It isn’t likely that Korean brands’ piece of the pie will fall in China’s beautifying agents advertise because of it,” said Park Jong-dae, an investigator at Hana Financial Investment. “China’s import market is extending quickly as Chinese look for premium items, and Korean brands make up more than 30 for each penny. The countering is concentrating on abridging supply, and it isn’t probably going to in a general sense influence request,” he noted. In short, citizens of both countries will feel the effects of these bans.Further Reading:
126% further Korean cosmetics products’ importations in China
How Korean Tv show actors can increase your brand awareness in China
Do Korean brands surpass Western brands ?
South Korea and Japan were the most popular destinations for Chinese tourists in 2014
   

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