The KOSDAQ-listed HENG SHENG HOLDING GROUP announced on the 29th that it has expanded sourcing of promising domestic small and medium brands and strengthened sales capabilities to local distributors in China through its 100% subsidiary HS Beauty. The group aims to lead a second boom of K-beauty in China with competitive domestic products.
HENG SHENG HOLDING GROUP has expanded its handling brands from just 5 at the beginning of its business entry in the second half of last year to 30 now. With expectations for the lifting of the 'Korean Wave restriction' (限韓令), the group plans to establish this year as a new beginning for the expansion of its cosmetics business.
Domestic small and medium brands that are growing in the global market have excellent quality and price competitiveness, but a lack of local distribution networks is pointed out as a challenge for expanding sales. In response, HENG SHENG HOLDING GROUP explained that it can adopt a mutually beneficial (win-win) strategy with domestic cosmetics brands.
Considering the continued growth and scale of the Chinese cosmetics market, HENG SHENG HOLDING GROUP expects to secure additional growth momentum through its entry into the cosmetics business. According to China Insight Big Data Research Institute, the size of the Chinese cosmetics market in 2023 is approximately 100 trillion won (516.9 billion yuan), growing 6.4% compared to the previous year. It is projected to expand to 114 trillion won (579.1 billion yuan) by 2025. According to the Ministry of Food and Drug Safety, Korea's cosmetics exports last year amounted to $10.2 billion, a 20.6% increase from the previous year. By country, exports to China were the largest at $2.5 billion.
An official from HENG SHENG HOLDING GROUP noted, "The Chinese cosmetics market is continuously growing, making it an attractive market that Korean cosmetics companies cannot afford to miss," adding, "We will uncover and collaborate with competitive domestic small and medium cosmetics brands to usher in the second K-beauty era in China." He continued, "We will leverage our existing business foundation in China to grow the cosmetics business as a new growth driver and work to enhance corporate value."
Meanwhile, HENG SHENG HOLDING GROUP conducted a third-party reserved capital increase on the 8th to strengthen the management foundation of the second-generation owner and expand the cosmetics business. After the capital increase, the largest shareholder changed from the existing CEO Huiman Kit to Director Huihong Yuan. Director Huihong Yuan has been pursuing entry into the cosmetics business since last year as the company's new growth driver. Some of the funds secured this time will be used to enhance the competitiveness of the cosmetics business.