After automobile and consumer electronics, South Korean companies are venturing into the Rs 6,300-crore Indian cosmetics and wellness market.
A group of Korean companies has signed agreements with Rajshree Empires, a New Delhi-based distribution company, to sell their products online and offline. The joint venture company — formed by Korean firms such as PLK International, Coson Co., Esthetics House, OUTIN Futures, Kell and BCL Cosmetics with Rajshree Empires – will set up a manufacturing unit in Uttar Pradesh with an investment of Rs 100 crore. The joint venture aims to set up a Korean cosmetics retail chain with 70,000 sq ft floor space by FY19. Rajshree is set to launch the first store by November-end. “We will be opening a store in north India initially with a floor area of 35,000 sq ft. We plan to cover 21 cities with 70 outlets by end 2016,” said Abhishek Biswas, founder of Rajshree.
“This is a major achievement of Korean companies to enter India after so many other big corporates from our country have already made an indelible mark,” said Dong, Un Lee, chief executive of PLK. According to Biswas, in two years, Korean companies would not have to pay import duties on their products.
“India and Korea are now bonded by CEPA (Comprehensive Economic Partnership Agreement) which lets import of Korean cosmetics duty free,” he said.
PLK has picked up 50 per cent stake in Rajshree, investing $50 million. “For the past 10 years, Korean cosmetics industry has been growing rapidly. However, our presence in India has not been very significant,” said Lee. Indian cosmetics and wellness market is expected to grow to US$ 4.6 billion (Rs 30,000 crore) by 2020.