China’s new import tax regime has enabled cosmetics giants AmorePacific and Estee Lauder to lower their prices in China by up to 30 per cent.
AmorePacific’s China division says it will reduce Mainland cosmetics prices for 327 lines under the brands of Etude House, Innisfree, Laneige and Sulwhasoo by 3 to 30 per cent from January 15.
US rival Estee Lauder has confirmed immediate price cuts for more than 300 lines in China, including its namesake label, Bobby Brown, Clinique, Jo Malone, and Mac by as much as 18 per cent.
This follows Beijing’s move last year to slash its hefty duties on imported cosmetics in an effort to boost domestic consumption, according to AmorePacific, which has its headquarters in Seoul.
“These global cosmetics names are now narrowing the price gap between China and overseas, and we believe more are probably about to follow suit,” says China Market Research Group director Ben Cavender, noting that with western brands becoming cheaper in the mainland, people may be discouraged from travelling to Hong Kong to make purchases.
Imported cosmetics previously faced tariffs of 84 per cent, reflecting both import and point-of-sales taxes. The tariffs have now gone down to 29 per cent for most beauty products.
Before the tariff reduction, many mainland consumers shopped via cross-border online marketplaces or while travelling abroad.