Increase in marketing expenses of large cosmetics enterprises

According to a report recently released by Kim hyemi, an analyst at Cape investment securities, the cost pressure of Korean cosmetics enterprises increased from the second half of last year to the second quarter of this year, showing different signs of change. Different from small and medium-sized brand enterprises that reduce advertising marketing expenses, large brand enterprises continue to increase related expenses, especially the higher the brand effect, the better. In the second quarter of this year, the sales of snow show and Hera, brands of amore Pacific, increased by 30% and 80% respectively compared with the same period last year. The sales volume of LG life health cosmetics in China increased by 30% compared with the same period last year, 90% of which was contributed by high-end brands such as Houhe breathing. On the contrary, in the second quarter, cosmetics sales fell by 25% compared with the same period of last year, which was mainly affected by a 36% year-on-year decrease in export and tax-free income, respectively. The second quarter sales of hanfo and able C & C increased by 4% and 24% respectively compared with the same period last year. Some analysts believe that this is the result of the first delivery of expenses.

Analysts of Kim hyemi said: "in order to survive in the competition, we need funds, which is relatively favorable for large-scale enterprises, but blind investment in brands can not be all translated into results. Lately. Not only in South Korea, but also in China, the trend of leading the whole market by the growth of high-end brands is also continuing, so appropriate marketing investment is needed. " In July this year, the total retail sales volume of cosmetics in South Korea was 2749.6 billion won, and in August it was 289.85 billion won, up 14.8% and 19.6% year-on-year respectively. The retail sales of cosmetics have maintained a relatively strong growth momentum. The retail sales of cosmetics accounted for 7.2% and 7.5% of the total retail sales in July and August, respectively. According to the data of the Ministry of industry, commerce and resources, South Korea's cosmetics exports in the third quarter of 2019 amounted to US $1.6 billion, reversing the negative growth trend in the last quarter and achieving growth. Analysts believe that this is a relatively encouraging result compared with a 12.2% year-on-year decrease in total exports in the third quarter. In July and August, the total sales of duty-free stores increased by 27.7% and 21%, respectively. Compared with the previous quarter, the sales growth increased. Compared with the same period of last year, the sales volume, number of customers and single customer of duty-free shops for foreign tourists have increased. On the contrary, the number of domestic customers and the unit price of customers have decreased. Since the beginning of this year, cosmetics prices have continued to rise, surpassing the rise rate of consumer price index (CPI) since the second quarter of this year. According to the analysis of gold analyst, "the rise of cosmetics price is mainly due to the decrease of sales of low-priced products and the improvement of tax-free industry, resulting in the increase of sales of high-end cosmetics, as well as the impact of small-scale brand adjustment structure. With the rapid growth of cosmetics industry, the chaotic growth trend of mass brands has been stable.