By
with contributions from Nyima Pratten
 on February 15, 2017


Last month, China banned the imports of several South Korean beauty products. Nineteen different cosmetics products, ranging from body wash to lotions, masks to shampoo, were blocked from entering the country.

Chinese authorities cited sanitary issues and other concerns but many are speculating that the ban is a retaliatory measure given the diplomatic tensions simmering between China and South Korea, and more product embargoes could be on the way. As previously reported, China has apparently banned some South Korean entertainment exports and celebrity appearances in the country, although China has not confirmed that it is doing this. Since last year, China has expressed stern disapproval of South Korea’s deployment of the Terminal High Altitude Area Defense, or THAAD, antiballistic missile system.

“The banning of these products wasn’t an accident,” said Kang So-min, an analyst at LIG Investments and Securities. “In January 2016, China banned seven products from entering, and by November they’d banned 19 products from entering.”

Kang added that most of the banned products came from smaller companies that are not well versed in exporting local beauty lines abroad.

“These small companies may not be well-prepared about paperwork or follow foreign regulations like Amore Pacific or LG do,” she said.

Many of the banned products were manufactured by lesser-known South Korean cosmetics brands including Iaso, Ottie and Aekyung cosmetics. With the exception of CJ Lion, a subsidiary of the Japanese-owned Lion Corp., whose shampoo product was recently banned, most of the cosmetics brands are relatively small and unknown even in South Korea.

According to official statements released by authorities at the General administration of Quality Supervision, Inspection and Quarantine of the People’s China, most of the products were banned due to safety concerns over findings of microbial contamination and close expiration dates.

“Our body wash was banned,” said Lee Seung-jae, a spokeswoman from Aekyung. “In the future, we will make a greater effort in the process of manufacturing our products and printing the labels. We still see opportunity in the Chinese market.”

Recent product bans also coincide with China’s own decision to tighten regulations on imported cosmetics. Since December 2016, the China Food and Drug Administration began enforcing new rules, including stricter limitations on the amount of lead allowed in each product and the addition of 1,388 materials not allowed to be used in any products.

South Korean experts believe China will become even more stringent toward South Korean cosmetics-manufacturers in the future. “The Chinese government said it was due to hygiene issues, but I don’t think that was the case,” said Kim Ju-duck, a professor of beauty industry studies at Sungshin Women’s University in Seoul. “China wants to keep checks on [South] Korean cosmetics so that they can allow [the Chinese beauty industry] to grow. They will become more picky in the future.”

Kim said beauty companies need to take note of the situation and be prepared.

“They need to be keener on details like product packaging and hygiene,” Kim said, who noted that the market demand for South Korean products in China is starting to slow. “[South] Korean cosmetics brands need to find other markets in Europe, the U.S. or the Middle East.”

According to the Korean International Trade Association, exports of skin are and makeup rose 45 percent last year to $3.97 billion; of that, China accounted for 37 percent, about $1.45 billion.

In spite of current political issues and China’s tightened health regulations, some experts believe that South Korean cosmetics will continue to perform well overall.

“I was skeptical about the Chinese market following the ban, but now it’s completely fine,” said So-min at LIG Investments and Securities. “Overall growth is not tapering off, and cosmetics sales are also no longer as sluggish as they were at the end of last year.”

Although it is not entirely clear if this new cosmetics ban is a ramification of the THAAD fallout between China and South Korea, many other South Korean industries are facing similar setbacks.

Earlier on Wednesday, Chinese state media, Global Times, reported a “rumored ban” on South Korean entertainment, yet reiterated China’s official stance of denying that such a ban exists.

Last week, state media, Xinhua, reported on Lotte Group’s decision to halt construction of a multibillion dollar real estate project in the northeastern city of Shenyang. The story quoted Foreign Ministry spokesman Lu Kang at a routine press conference in Beijing as saying: “On principle I can say that China welcomes foreign investment. At the same time, relevant companies operating in China must abide by laws and regulations.”

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