[Asia Economy Reporter Seungjin Lee] Cosmetics research, development, and manufacturing (ODM) company COSMAX announced on the 29th that its monthly cosmetics production volume in the Chinese market surpassed 47 million units in April 2021.
COSMAX's Chinese subsidiaries (COSMAX China and COSMAX Guangzhou) achieved a monthly cosmetics production of 30 million units in October 2018. After two years and six months, production increased to 47 million units per month, and this year, it is expected to produce over 500 million units solely in China. This means that one out of every three Chinese people uses cosmetics produced by COSMAX.
Last year, as face-to-face consumption shrank in the Chinese market, e-commerce experienced explosive growth. According to the National Bureau of Statistics of China, the number of internet shopping mall users in China increased by 110 million in the first half of 2020 compared to the same period the previous year. Additionally, the online market share in the beauty sector increased by 36.7% compared to the same period last year, up to October.
COSMAX's Chinese subsidiaries have established and are operating an all-around system to support local online brands across all areas including marketing, R&D, and production, in line with the expansion of the e-commerce market.
This system enables rapid new product launches and product renewals tailored to the fast product replacement cycle characteristic of online markets. The time from product request to launch has been shortened to about five months, with plans to reduce it to three months in the first half of this year.
Last year, a small-lot, multi-product production system was also introduced for new entrants to the market. To enhance production flexibility, COSMAX met customer needs through diversifying the mask beauty category, launching region-specific new products, and developing post-color cosmetics.
A COSMAX representative stated, "Recently, as the spread of COVID-19 has subsided in China, people have started removing masks and actively applying makeup. The previously suppressed consumer sentiment has exploded, leading to a continuous increase in demand centered on color cosmetics."
The increase in production volume was also influenced by the revived interest in color cosmetics. In fact, COSMAX's Chinese subsidiaries produced over 100 million lip care products (lipsticks, lip tints) last year, marking an all-time high.
Alongside this, COSMAX is strengthening its OBM business to enhance service competitiveness and customer satisfaction. The OBM service, which goes beyond product development and manufacturing to include branding and marketing, is receiving explosive responses, especially from new clients.
Lee Byung-man, CEO of COSMAX, said, "With an online-focused strategy, the proportion of online clients in our Chinese subsidiaries exceeds 70%," adding, "This year, we will maintain growth centered on makeup products such as lip tints and eye palettes, as well as basic essence cosmetics."
Meanwhile, COSMAX's Chinese subsidiaries boast the largest annual production volume in the Chinese market at 720 million units. Including overseas subsidiaries in Korea, the U.S., Indonesia, Thailand, and others, the total annual production volume exceeds 2 billion units.
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