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KMID : 1170320070130020119
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Korean Journal of Health Economics and Policy
2007 Volume.13 No. 2 p.119 ~ p.136
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A Study on the Development of Korean Cosmetics Industry
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Jo Jae-Goog
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Abstract
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The cosmetics industry is regarded in many respects as one that suits Korea, in that it is knowledge-oriented, high value-added, environment-friendly, and less energy-consuming than many other industries. It is a small batch production industry that is driven more by cutting edge technologies than natural resources, which Korea lacks. As of 2004, the volume of cosmetics industry for Korea was 3.3 billion dollars as compared to 22.8 billion dollars for the US. Also, Korea imports more from the US than it exports to the country, and the gap is expected to widen with the recent conclusion of the
Free Trade Agreement, which could lead to increased market share of American firms in Korea and, as a result, mass bankruptcies among Korean small and medium businesses. What’s obvious in these circumstances is that, if the Korean cosmetics industry is to make advancement, there is an urgent need forefforts on the part of cosmetics firms, and manufacturers in particular. This is because the government support for the cosmetics sector is increasingly becoming ineffective and limited in raising its competitiveness in the framework of the WTO and FTA. This study takes a close look at where Korea’s cosmetics industry stands and suggests ways in which its cosmetics businesses can gain an edge over their competitors in other countries and develop finer products with higher value added. In this effort, the government will have to reduce regulations and devote its energies to fostering a climate where cosmetics firms can compete freely with each other and with their foreign counterparts.
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KEYWORD
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cosmetics industry, export and import of cosmetics, WTO, FTA, competitiveness, regulation
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