Luxury cosmetics soar despite sanctions in North Korea

According to the National Assembly's Foreign Affairs and Unification Committee, Saenuri Party lawmaker Yoon Sang-hyun looked at Chinese customs data on trade with North Korea and the North's international trade data for a list of luxury items banned for importing under UN Security Council sanctions. 

"When Kim Jong-il was in power, the regime imported about $300 million worth of such items annually, but since Kim Jong-un took power the amount has doubled to about $600 million,​" Yoon said.

"The regime has hugely increased imports of liquor, watches, handbags, cosmetics, jewelry and carpets​. It seems that the regime is increasing these imports to reward senior party and military officials while supplying department stores with more goods to sell to the elite in Pyongyang,​" Yoon speculated. 

Chinese tourists fueling sales for South Korea​

Figures released in June by website, Huanqiu revealed female tourists from China to be fueling sales for South Korean cosmetics brands.

As many as 574,000 Chinese visitors were reported to be making the trip​ over to close neighbour Korea, which makes up 45% of all foreign tourists.

The research also featured statistics from the South Korean financial investment and tourism information system, that showed Chinese enthusiasm for Korean cosmetics was not limited to incoming tourists, with exports to China also accounting for 54.7% of total Korean beauty exports.

Trade​

In July, a visit from the Chinese President Xi Jinping to South Korea pushed progress towards a free trade pact between the two countries that is likely to benefit the cosmetics and personal care sectors.

One area expected to be pushed particularly hard ​by the South Korean representatives is the country’s cosmetics sector​ as under current trading regulations with China, South Korean beauty products are hit with a tariff as high as 130%, putting them very much in the luxury and prestige end of the retail spectrum.

If lobbying is successful, as part of the free trade pact, players such as Amore Pacific, The Face Shop and LG Household & Health Care, will be looking to ensure that their products can be marketed in China without a far lower tariff, possibly even zero.