Scaling further: Cosmax to expand China operations to capitalise on domestic online market growth
China's domestic beauty brands have been rapidly growing, establishing themselves as significant players in the country's cosmetics market.
Judydoll, Florasis, and Flowerknows are gaining swaths of local followers, gradually chipping away at the market share of more established foreign competitors.
The DTC beauty market is characterised by a quick turnover of products.
These brands move fast to stay ahead of the competition and Cosmax has adapted by shortening the process from concept to market launch to just two to three months.
This quick turnaround allows the company to respond swiftly to market demands and trends.
Cosmax is set to unveil a new facility in Xinzhuang Industrial Park, Shanghai. It will integrate research, production, and marketing under one roof so it can better serve the fast-paced domestic market.
It will occupy 13,000 square meters of land and feature a total floor area of 73,000 square meters.
According to Cosmax, it is set for completion by 2026 and will coincide with Cosmax’s 20th anniversary in China.
Cosmax’s move to launch this new facility is a “proactive response to the expansion of the Chinese online cosmetics market”.
“We must continue to practice localisation and customer satisfaction and prepare for the next 20 years,” said Lee Byung-man, CEO of Cosmax BTI.
Cosmax’s role in China’s beauty industry
The South Korean major expanded to China in 2004.
Since then, it has worked to meet the needs of local consumers by developing products that meet their needs and suit their tastes.
For instance, it has invested in a local research and innovation center in China to better understand the local beauty consumer.
Cosmax highlighted its success with lip tints that it has developed to the preference of Chinese consumers who prioritise lip products with moisturising properties.
Today, the company has produced over 200 million units of lip tints alone.
With this localisation strategy, it has since become the top ODM company in the country.
According to the firm, sales in China was below KRW10bn in 2008. It surpassed KRW100bn in 2014 and exceeded KRW660bn in 2021.
With approximately 1,000 customers, China ranks as the country with the second-largest customer base after Korea.
Cosmax currently has seven facilities in China with a total annual production capacity (CAPA) in China is 1.49 billion.
