Such a K-ODM hype in North America at the moment! One survey shows Korean cosmetics as ranking first among all the imported cosmetics to the United States. Why?
Let’s take a closer look of what makes Korean cosmetics so competitive.
1) Price competitiveness
The prices of Korean ODM companies are estimated to be cheaper than Made in Italy or USA, but more expensive than Made in China or Taiwan. The cost of the contents and final product is very important to the North American product developers especially for the indie brands. You will wonder why Made in Korea is cheaper than the Italian or the American products?
· Most of the raw materials used to make the contents are imported (from Italy or Korea).
· Korea is self-sufficient when it comes to containers. Italy and the United States have almost no container production facilities in their respective countries.
2) Fast lead time (procurement period)
Cosmetics are usually divided into primary packaging (cosmetic contents + container) and secondary packaging (gift box and auxiliary materials). These days, North American indie brand customers want both primary and secondary packaging on a turnkey basis. If time management for this supply chain is not managed, delivery will naturally be missed, but Korea, China, and Taiwan can supply the above two types of packaging seamlessly.
3) Facility investment, number of researchers, product competitiveness
Facility investment is key when it comes to timely delivery. The lack of facilities and the number of researchers can be seen as delaying the delivery time from samples to the final product. Making cosmetics is often compared to cooking. Without basic kitchen staff and food preparation, you will likely make customers wait long at their tables. What is more? The innovations taking place in Korea makes the product quality best ot its kind.
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K-ODM이 북미시장서 뜨는 이유 < PETER SHIM의 ‘글로벌 화장품 유통 톺아보기’ < RUNNING STORY < 기사본문 - THE K BEAUTY SCIENCE (thekbs.co.kr)