South Korea's "Herald Economy" article on August 23, original title: Will South Korea-China relations, marking the 30th anniversary of the establishment of diplomatic relations, be trapped by "THAAD"? The 24th of this month marks the 30th anniversary of the establishment of diplomatic relations between South Korea and China, and some South Korean companies are still struggling in the Chinese market. After the THAAD incident in 2016, some logistics and cosmetics companies in South Korea were unable to conduct normal business. At the same time, some Korean food companies that have been working in the Chinese market for a long time have quietly made a leap forward, and some fashion brands have also gained high popularity.
Lotte Shopping decided last month to sell its remaining stake in China's last department store in Chengdu. Lotte Department Store has opened many department stores in Tianjin, Weihai , Chengdu, Shenyang and other places since it first entered the Chinese market in 2008. However, since Lotte provided deployment land for "THAAD", it is now in China Department store business ends. Previously, Lotte Mart, which once expanded to 110 stores in China, packed up and left in early 2018.
The Korean beauty industry, which once dominated the Chinese market, has also failed to keep up with the times. As its leading companies, Amorepacific and LG Life and Health are struggling in the Chinese market. The reason is the downturn of Korean luxury cosmetics brands "Sulwhasoo" and "Hou" that are highly dependent on the Chinese market. Some analysts believe that because the product quality of local Chinese cosmetics companies is improving and patriotic consumption among Chinese young people is booming, the number of consumers buying Korean beauty products has decreased accordingly.
However, not all Korean companies are struggling in the Chinese market. Korean food companies and some fashion companies that have been deeply involved in the Chinese market for decades are quietly moving to the forefront.
CJ CheilJedang is actively expanding its business in China with a focus on global strategic products such as dumplings and instant rice. In the second quarter, its sales in the Chinese market increased by 32%, 12% higher than its overall overseas food sales growth rate percentage points. "pumeiduo", which has been deeply involved in the Chinese market for 10 years and strives for localization, successfully turned a profit for the first time in 2020. Taking the opportunity of the second factory in Beijing, which was built with an investment of 30 billion won in April this year, the brand's sales in China are increasing day by day. Korean fashion company F&F's Chinese market sales account for 26.3% of its total sales. ▲
author Shin So-yeon, translated by Zhang Jing
