[CNDSN5 March 27 news] (Beijing Daily Qian Yu Zhao Xiujing) with 5 months of this year, South Korean cosmetics company amorepacific's two brands have entered the domestic market, amore Pacific market in mainland China have been spelled a large territory. The personage inside course of study says by Korean and Korean consumers skin the same, product penetration force stronger influence, amore Pacific products has been a threat to Shiseido, L'Oreal positioning in the low-end international brands of cosmetics. For amore Pacific in terms of their own development, Korean brands rely solely on Korean marketing, difficult management localization problem will become a major obstacle to the rapid expansion of the group.

Across the board layout of the Chinese market

May 21 this year, amore Pacific announced its high-end toiletries brand "Lv" officially entered the Chinese market, and notice the Xihu products sold in South Korea the nourishing tough series will be in July this year, landing in China. And on the previous May 13, amore Pacific announced that company's brand IOPE Aino Bi will be officially expanded its business to the Chinese market, amore Pacific, President of China Gao Xiangqin introduced to the end of 2015 IOPE Aino Bi plan in first tier cities of high-end department stores in set up no less than five counters.

From 2010 onwards, in Chinese amore Pacific market expansion is accelerating the speed of. Amore Pacific as early as 1992 Chinese entered the market, the brand Laneige listed in 2002, after expanding the brand portfolio. Mamonde 2011-2013 listed in 2005, were listed, and Edith Sulwhasoo Innisfree house. In 2014, amore Pacific in China investment 750 million yuan set up processing plants - Shanghai beautiful makeup Park, 2015 is the continuous IOPE and Lu two high-end brand to promote the Chinese market.

Amore Pacific relevant responsible person told the Beijing Daily reporter, at present amore Pacific's products has in mainland China over 300 city layout. In addition, according to the Chinese amore consumers, other brands will continue to introduce China market.

International low-end products affected

The rapid expansion of business in China, amore Pacific sales rose steadily. The results show, 2014 Chinese amore Pacific market sales growth of 44% to 467300000000. According to the data Gao Xiangqin previously provided. Over the past decade, amore Pacific sales in China, the average annual growth rate reached 47%. And with the completion of the Shanghai beautiful makeup Park, amore Pacific 2020 market share in China accounted for the ratio from the current 10% increase to 28%.

Amore Pacific in China market performance is compared, also some foreign cosmetics company's sales performance is showing weakness. For example, Shiseido fiscal 2014 year revenue fell 2%, the Chinese market has become Shiseido global the weakest market; sales of L'Oreal China maintained for 13 years of double-digit growth rate last year was broken.

Gao Jianfeng, general manager of Shanghai Management Logix Consulting Co., Ltd. to Beijing Daily reporter analysis said that South Korean cosmetics and the Chinese market with higher degree of, have a certain impact on the market, especially to some consumer loyalty is not high cosmetics brands will have a greater impact.

"For the end Volkswagen brand will be affected, mainly Olay, L'Oreal Paris, pond's and other brands, and domestic cosmetics more low, so the impact is not great." Gao Jianfeng analysis.

Shiseido relevant responsible person in an interview with the Beijing Daily reporter also said that South Korean cosmetics in China the rapid development of influence to Shiseido performance in China, especially the advance of China ROK trade zero tariff policy, will also be continue to affect the Shiseido in China, performance factors. In this regard, Shiseido had to make strategic adjustments in China.

In addition to the impact of the end product, amore Pacific for high-end cosmetic brand impact is not to be optimistic about the industry. Daily chemical industry angel investors summer to Beijing Daily reporter analysis, said: "amore Pacific in China culture consumer groups are mainly young consumer groups, is in the low-end products, the main consumer of, so even if amore Pacific's high-end brands to enter the Chinese market, has played a stable market share of high-end European and American brands in China also does not pose a threat to the."

Expansion behind the management risks

In the days when favourable geographical position of amore Pacific, development in China will be smooth sailing, there are people in the industry to hold different views.

Guangdong Province chemical chamber of Commerce Deputy Secretary General Gu Jun to Beijing Daily reporter said that under the influence of the Korean wave, amore Pacific quickly attracted is young consumer groups, but the choice of young consumer groups is more changeful. How to cultivate consumer loyalty is one of the big challenges.

Gao Jianfeng also said that from the point of view of the current development situation of amore Pacific, the product distribution shop fast enough, but market reaction was relatively slow, and domestic brand attention marketing and advertising different, amore Pacific completely driven by the Korean drama to attract consumers, and if the loss of Hallyu influence, the impact of amore Pacific is huge.

Industry experts said that Korean brands to enter the Chinese market after the implementation of the localization, to its own development and not much advantage, "compared with Europe and the United States, South Korea and China is near enough, human resources and Chinese are quite different, so the cost advantage of brand of South Korea is not obvious. Gao Jianfeng added.

In the enterprise management, different from European and American brands in China management strategy, South Korean companies generally low wages. Little decentralization, lack of attraction to the mature professional managers, so South Korea in China employee are generally South Korea's top the allocation of a certain proportion of employees in China, the Korean senior management level of understanding for the Chinese domestic market determines the expansion of the brand can go far.