Cosmax increases sales by 42% through strategic approach

By Natasha Spencer

- Last updated on GMT

Cosmax increases sales by 42% through strategic approach

Related tags: Marketing, Cosmetics

Through its global expansion, focus on home shopping convenience and collaborations with pharmaceutical and fashion brands, the South Korean cosmetics ODM increased sales by 42% to 757 bn won (€621.58 mn) in 2016.

The manufacturer’s operating profit hit 52.6 bn won (€43.1 mn), representing a 46.4% rise in operating profit at home and overseas.

Cosmax continues to expand operations overseas by opening a new make-up facility in China​ that will position its production capacity in China, Indonesia and the US to over 1 billion units.

Overcoming challenging economy

Despite tensions between Korea and China continuing to disrupt the trade relationship between the two leading cosmetics nations, as well as economic stagnation in China, Cosmax increased its sales by 32% year-on-year in the country, reaching 283.9 bn won (€233.1 mn) last year.

These results stem from new product innovations and supplies from existing domestic Chinese consumers, along with those that are high in demand makeup and mask packs.

Korea also saw healthy growth, as sales within the domestic market increased by 35.7%  to 505.5 bn won from last year. This is largely due to heightened skin care product sales and rising demand from offshore consumers.

Shareholder activity

As its holding company Cosmax BTIA  saw an increase of 33.5% YoY to reach consolidated sales of 266.9 bn (€219.1 mn), Cosmax announced it would pay its shareholders an annual cash dividend of 200 won (€0.164) per share for 2016 and Cosmax BTI and 1,000 won (€0.821) per share for Cosmax Group.

These figures amount to payouts of 10 billion won for Cosmax and 1.9 billion won for Cosmax holdings.

With annual sales of over 1 trillion won, the company’s 2016 results mark 20% growth in ten consecutive years.

Future growth

"In the past year, we exported $100 mn [€94,000] worth of new products to our global customers,"​ said Lee Kyung-soo, President of Cosmax Group in a press release.

“This year, we will continue to grow our Chinese subsidiary [and] strengthen our position in cosmetics ODM."

Cosmax will now set it sights on continuing its growing presence in Asia though launching its new hue factory in Shanghai, expanding production and improving operational activities.

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