Kolmar Korea building factory in China

South Korean cosmetics company Kolmar Korea is building a factory in Wuxi with the aim of boosting its sales in China to about 200 billion won (US$173 million) by 2019.

An original design manufacturing (ODM) company, Kolmar Kora aims to offer products specifically tailored for customers in the world’s second-largest economy, says president Choi Hyeon-gyu, who is managing the company’s Chinese business.

Since its founding two years ago, Kolmar Beijing has reached break-even point. Its sales have grown from 17.9 billion won in 2014 to 37 billion won in 2015 then 55.6 billion won last year.

“We studied Chinese customers thoroughly last year and found that they think efficacy, quality and brand as the most important things when buying cosmetics,” says 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 that respond rapidly to the rising demand for baby and maternity products made from 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, Proya Cosmetics and Shanghai Jahwa United are starting to concentrate on second-tier cities and below.

“All the popular local brands in China focus on natural ingredients such as oriental medicines,” says 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.”

Meanwhile, Kolmar Korea is redoubling its efforts to localise its products. It uses technologies developed in Korea with its 30 or more R&D team sent to China.

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