Recently, Cosmax Inc., a leading South Korean cosmetics original development and design manufacturer (ODM), has announced plans to build a new headquarters in Shanghai’s Xinzhuang Industrial Park. This move marks the company’s 20th anniversary in the Chinese market, where it first entered in 2004 as the country’s first South Korean cosmetics ODM.
On October 8, Cosmax China held a ceremony to commemorate this milestone, highlighting the company’s remarkable growth in China. Initially, Cosmax China recorded sales of less than 10 billion won ($7.4 million) until 2008. However, by 2014, sales had surpassed 100 billion won, and by 2021, they exceeded 660 billion won, thanks to a successful localization strategy.
Regarding the localization strategy, Cosmax China’s Deputy General Manager, Shin Young-jae, told CHAILEEDO, “It is impossible to capture the Chinese market with a Korean mindset. We must have a resolute commitment to full ‘localization’.” At the time, former head of Cosmax China, Choi Kyung, saw many multinational companies miss opportunities due to slow market responses caused by decisions being made at their overseas headquarters. This led him to firmly adopt localization as the core strategy.
“Cosmax’s development in China has always adhered to a localization strategy, integrating into the local market. Since 2004, the company has gradually moved toward full localization, with its production, sales, marketing, and research departments primarily staffed by Chinese employees. More than 98% of the company’s workforce and management are local, with foreign employees making up less than 2%,” said Shin Young-jae.
Currently, Cosmax has over 400 R&D personnel in China, accounting for 25% of its total workforce. The company is also actively engaging in industry-academia-research collaborations and joint research projects, creating multiple innovation platforms to develop high-quality products better suited to Chinese consumers’ needs. Shin Young-jae revealed that earlier this year, Park Myung-sam, the head of research at Cosmax’s headquarters in South Korea, was dispatched to China to fully oversee the operations of the research institute, demonstrating the company’s strong emphasis on research and development for the Chinese market.
Today, Cosmax China serves around 1,000 clients, making China its second-largest market after South Korea. The new headquarters, expected to be completed in 2026, will cover 13,000 square meters of land and have a total floor area of 73,000 square meters. It will function as a comprehensive hub for research, production, and marketing, further strengthening Cosmax’s presence in the Chinese cosmetics market.
