Following the successful 30 billion won (USD 26 million) upgrade of its US site in Ohio (which it purchased from L’Oreal in 2013), the company has also set up a research hub in New Jersey, both of which, the company says, put it way ahead of competitors in North America.
“Homegrown American ODMs are usually small, labor intensive companies dedicated to one or two products. They are behind us in portfolio-wide R&D and quality assurance,” Sok-min Yu, head of Cosmax USA, reportedly told Pulse News.
“We propose 20 to 30 new products to customers while rival companies visit them with one or two new products.”
Outsourcing: out in front
Cosmax operates as an original design manufacturer (ODM), meaning fellow brands commission it to develop and produce products, which they then retail under their own labels.
The company reportedly boasts market-leading firms among its clients, across both masstige and premium, although it is not permitted to disclose the brands’ names. It has reportedly gained 40 new clients since entering the US.
ODM services provided by companies like Cosmax are increasingly on the rise as firms take to outsourcing manufacture and production to cut costs, and Cosmax is well-positioned to take the lead in North America.
The firm reportedly cuts new product development time down to less than a year, while US rivals generally take upwards of 18 months.
Yu explained that once it has built up its reputation in the US, the company will turn its sights to neighbouring Latin America, and across the Atlantic at Europe too,
“Once our cosmetics are well received by U.S. consumers, we can sell them in Latin America and Europe as well. And we have a plan to enter other markets next year,” the company head confirmed.
Yu’s comments come hot on the heels of Cosmax USA’s recently announced partnerhsip with packaging heavyweight, VariBlend.
“We are determined to become the largest contract cosmetics manufacturer in the world by 2017, through advances in the US - the largest cosmetics market - and Latin America, the fastest-growing makeup market,” Yu asserted at the time of the deal.