If cosmetics import "zero tariff"

A few days ago, it was reported that the State Administration of Taxation will reduce the tariffs on some imported products, among which the products such as cosmetics and milk powder are most likely to be tax-deductible; at the same time, it is also brewing to eliminate the consumption tax on imported cosmetics. This adjustment is expected to be gradually realized during the "12th Five-Year Plan" period. If the import tariff is reduced and the consumption tax is as high as 30%, will there be a "big reshuffle" in the cosmetics industry? Cosmetic companies will be a few happy families?

“Yang” brand: Yang Xiao, sales manager of Su Wei’s sales department, said: “An imported cosmetic needs to pay three major tax items. The first is the tariff, the tax rate is about 10%; the second is the value-added tax, and the tax rate is about 17%. The third part is the consumption tax, which has a tax rate of approximately 30%. The consumption tax is only for imported brands. At present, only makeup and lipstick need to be paid."

If the import tariff is reduced and the 30% consumption tax is cancelled, it is obviously a good news for the high-end imported cosmetics to reduce costs. On the one hand, cheaper prices will attract more consumers to buy; on the other hand, they will also benefit from the extension of channels in supermarkets and cosmetics specialty stores.

Under the “hidden rules” in which high-end brands grow at an average price of 10% to 20% per year, the industry has a lot of discussions. If the tax rate really adjusts, can high-end imported cosmetics lower market prices? It is understood that the end of 2010, Lancome, Biotherm, Helena and other L'Oreal Group's high-end cosmetics have reported price increases, an increase of about 10%. Most experts in the industry believe that even if import tariffs and excise taxes are rumors adjusted, high-end imported brands are unlikely to lower commodity prices.

Chen Haichao, a senior daily chemical expert, believes that imported cosmetics brands have implemented a high-price strategy in the Chinese market and it is unlikely that they will cut prices. Senior Japanese chemical expert Gu Jun also believes that imported cosmetics brands will not lower prices because the positioning of imported cosmetics is high-end.

According to relevant statistics, the sales volume and sales volume of foreign brands of cosmetics in China accounted for about 60% and 90%, and the profit share was more than 90%. Taking 2009 as an example, P&G ranked first with sales of 13.232 billion yuan and market share of 17.9%; L'Oreal ranked second with sales of 8.178 billion yuan and 11.1% market share.

Local brands: If the price of imported cosmetics falls, how will it affect local cosmetics?

"This will not have much impact on local brands. Because there is a big difference in the brand between local cosmetics and imported cosmetics, and everyone's channels do not cross much." Yang Dan said. “The only ones that may be affected are the Herbalist local high-end brands.” Some industry insiders predict.

Li Ruiming, secretary-general of the Beijing Hairdressing and Beauty Association, said that at present, there are more than 4,000 local cosmetics companies and only 50 of them have annual sales of more than 100 million yuan. Local brands with more than 500 million yuan are rare. Local skincare products include Herborist, Herbal, Nature, Longliqi, Liushen and other brands. Except for a few brands among the domestic mid-market, the vast majority of brands are concentrated in the low-end market.

The marketing expert Zhang Honghui pointed out on the current market structure: “From the perspective of mid to high-end brands, department store counters are almost monopolized by brands such as Lancome, Estee Lauder, Biotherm, L'Oreal, Shiseido, Olay, etc. Lihua and other possessions."

Feng Jianjun, a senior marketing expert in the industry, believes that the tax rate adjustment has different effects on different cosmetics franchise stores. 80% of the local cosmetics specialty stores are local brands, and take the second and third tier cities. “Even if the tariff is reduced, the profitability of imported brands is not comparable to that of local brands. They will also choose to be local brands. In their target market, imported brands are not necessarily better than local brands.”

Agents: It is very good to send charcoal in the snow. This is the first reaction of Bai Shengmei, Chairman of Korea Pneumatic Printing Co., Ltd., to the “zero tariff” policy. Excessive taxes undoubtedly set a price threshold for imported cosmetics. Ms. Wang, who represents the United States importing beauty products, said: "Because of the higher tariffs on cosmetics, cosmetics that were originally cheap commodities in foreign countries have become "luxury products" after being subjected to tariffs. This makes us very helpless."

According to the 2010 China e-commerce market data monitoring report, the overseas market share of overseas purchasing services in 2010 reached 12 billion yuan. Some scholars predict that by 2012 this figure will reach 48 billion yuan. In overseas purchasing, the number one trade volume is cosmetics.

“As a Korean cosmetic company developing in China, we are full of expectation for China’s future market prospects. The adjustment of tariffs will bring about the adjustment of the company’s related prices. Once the policies are implemented, the company will definitely increase the introduction and investment of imported brands. To allow more Chinese consumers to enjoy our products in Korea, but also to prevent the illegal import of cosmetics to form a healthy competitive structure, but this will also have a drawback. Because of the low threshold, too many companies will enter the industry, resulting in Industry competition is overheated." Bai Shengmei said.

Franchised Stores: If the reduction in import tariffs on cosmetics and the elimination of consumption tax are really implemented, more foreign brands will flock to the Chinese market. The cosmetics franchise store will become the most convenient channel and the franchise will There will be shuffles. Cosmetics franchise stores are currently dominated by sales of local brands. Tariff adjustments will significantly change the existing commodity structure, and the focus of the business will shift to imported brands.

“The reduction of tariffs may also lead to foreign cosmetics brands rushing to the domestic cosmetics brand sites. In addition, the tax adjustment plan will benefit Huimin, reduce parallel imports, and international brands will further concentrate, and will also squeeze non-branded products. There will be more imports. Brand entry into the Chinese market is fair for global competition,” Bai Shengmei told reporters.

The owner of a franchised chain of daily chemical products in Shenzhen believes that if the tariffs are reduced and the consumption tax is eliminated, the cosmetics franchise stores will form an impact on the traditional department store cosmetics counters. Cosmetics franchise stores may choose to operate independently from department stores and take a professional development path.