With the growing market share of Korean makeup in China, Korean cosmetics giants have begun to make new strategic plans for their brands. Yesterday, the reporter was informed that the two major cosmetics companies in Korea, LG Life Health and Amore Pacific, have strategically divided their cosmetics lines, and classified their cosmetics according to distribution channels and customer types. LG Life Health carried out departmental adjustments at the end of last month, and the cosmetics business was divided into two parts: luxury cosmetics and high-end cosmetics. Luxury cosmetics brands include Ou, Hou, SU: M37 ° Breath, Bill Reeve, 黛妃, etc., high-end cosmetics include Inozi, Beauty Han, Lager Bell, Kathy Cat, and Rui Ruizhe.

After categorization, luxury cosmetics will be sold in department stores, duty-free shops and specialty stores, while high-end cosmetics are mainly sold in large supermarkets and drugstores. Previously, LG Life Health was brand management in accordance with cosmetic ingredients. LG Life Health said that luxury brands give people a more noble feeling, and also allows the company to better market products according to customer needs.

Amore Pacific also classifies its brands by circulation channels. Snow Show, Hera and VB are classified as luxury brands, and Lange, Ainobi, Korea, and Dream Makeup are high-end brands. The former is only available in department stores and specialty stores, while the latter is sold in direct stores and miscellaneous stores. According to the new classification, the ratio of luxury brands to high-end brands in Amore Pacific is “6.5:3.5”, and the company's future development will focus on the purchasing power of the customer base.

Amore Pacific said that in order to more effectively approach the target customer group, the company decided to classify according to brand characteristics, and will be further reflected in the process of name, price, design and advertising marketing.

Today, South Korea is already China's second largest source of cosmetics imports. According to data released by the Korea International Trade Association in September 2015, from January to July 2015, the scale of Chinese imports of Korean cosmetics far exceeded that of last year. The share of Korean cosmetics in the Chinese market reached 22.1%, second only to France.

This has also brought great benefits to Korean cosmetics companies. In the case of Amore Pacific, the average annual growth rate of sales in Amore Pacific China has reached 47% in the past decade. In 2014, Amore Pacific's sales were 4.7 trillion won, of which 17.6% of its sales came from overseas markets. In the overseas market sales of 832.5 billion won, the sales in the Chinese market was 467.3 billion won, accounting for 56%.

In addition, the industry believes that due to the expansion of the scale of the business, the brand dispersion is not concentrated enough. The large cosmetics company has repositioned the product line this time in order to distinguish it from small and medium-sized cosmetics companies with only a single brand or a small number of brands.

With the official entry into force of the China-South Korea Free Trade Agreement, Korean cosmetics have also ushered in new development opportunities in China. By planning product lines and identifying first- and second-line product categories, these brands can be motivated to better control consumer groups and provide differentiated services.