[Biz Leader] Jang Ok-dong, CEO of Coloray Korea, "Full-scale Entry into Korea... Sales Increase in Distribution Business Despite COVID-19"

Jang Ok-dong (ZHANG YUDONG), CEO of Coloray Korea.

[Asia Economy Reporter Jang Hyowon] “ColorRay has established ColorRay Korea and has officially entered the Korean cosmetics market. In five years, we aim to achieve sales of 10 billion KRW in Korea alone.”

Jang Okdong (ZHANG YUDONG), CEO of ColorRay Korea, stated this in an interview with Asia Economy on the 16th. The plan is to supply pearl luster pigments produced by ColorRay’s headquarters in China to major domestic cosmetics original design manufacturers (ODM). To this end, ColorRay established ColorRay Korea in January.

ColorRay specializes in producing pearl luster pigments, commonly known as “pearl,” used in color cosmetics. It holds the number one market share for cosmetics pearl luster pigments in China. In the first half of this year, it recorded sales of 28.5 billion KRW and an operating profit of 13.9 billion KRW.

ColorRay’s sales consist of 80% domestic sales in China and 20% exports. With this entry into the Korean market, the company plans to produce in Korea an amount equivalent to its current export volume. Since June, ColorRay has been conducting new product tests with companies such as Kolmar Korea and Cosmax.

CEO Jang said, “The Korean market for cosmetics pearl luster pigments currently exceeds 100 billion KRW and grows annually by 5-10%. This means a new market of 5 to 10 billion KRW is created each year, and ColorRay plans to focus on targeting products for this new market.”

He cited cost-effectiveness as ColorRay’s strength. While most other pearl luster pigment companies purchase raw materials externally, ColorRay has built an internal value chain for processing raw materials, reducing costs.

Additionally, ColorRay supplies internationally renowned brands such as L’Or?al, Est?e Lauder, Chanel, and Lanc?me, proving both its recognition and quality. Furthermore, to accommodate increasing sales, it expanded its new factory, increasing production capacity from the previous 6,000 tons to 10,800 tons.

He said, “We invested 32 billion KRW of public offering funds to expand the new factory, and the final equipment testing is currently underway. Once full operation begins in the first half of next year, sales will start in the second half of next year.”

ColorRay reported increased sales in the third quarter of this year. The pearl luster pigment business saw a 10-20% sales decline due to reduced operating rates amid the COVID-19 pandemic. However, the new distribution business, which started in the second quarter, recorded sales of 6.9 billion KRW, driving overall sales growth.

He explained, “The new distribution business procures cosmetics, beauty devices, and electronic devices through domestic duty-free shops and supplies them to Chinese platforms. In the second quarter, it recorded sales of 6.9 billion KRW, and during this year’s Singles’ Day, it distributed through Tmall and JD.com, so we expect promising sales in the fourth quarter.”

ColorRay plans to expand its relatively stable new distribution business. The goal is to generate steady sales from the distribution business to comfortably support new market entry for pearl luster pigments.

CEO Jang said, “We will grow the distribution business by increasing product categories and scale. We expect the pearl luster pigment market situation to improve from next year, leading to overall sales growth and meaningful growth in the Korean market.”

He also mentioned, “We plan to launch a color cosmetics brand using pearl luster pigments. The new brand can create synergy by utilizing the distribution network currently being established.”