Tiens Group, a China-based global cosmetic and health products provider, will soon be selling two of its brands in Paris, becoming the first domestic cosmetic maker to enter the world's fashion capital.
The two brands, Frenchic and Aprotie, are OEM (original equipment manufacturer) products by French cosmetic and fragrance manufacturer Parfum D' Image Group. The two brands include 345 types of products.
This is the first time Tiens has used the French firm as an OEM partner.
After entering Paris, Frenchic and Aprotie will expand to other European markets, said Li Jinyuan, president and founder of the Chinese firm.
Founded in 1995, Tiens Group went global in 1998. Starting with Russia, Ukraine, Hungary and Poland, the Tianjin-based firm has grown into a global enterprise with business operations in almost 200 countries and regions, with a customer pool of over 12 million and 50,000 franchise stores.
"Unlike many domestic firms who only produce low-end products at low prices, building brand image has been the firm's top priority," Li said.
The company said it has established long-term partnerships with multinationals such as L'Oreal, Pfizer Pharmaceuticals and Shiseido, who are high-end OEM and ODM (original design manufacturers).
"It's not cheap to find partners at that level," Li said. "But by co-operating with these high-end global OEM and ODM partners, we guarantee the quality of our brand products and our brand value will be enhanced."
China has the most cosmetic manufacturers in the world, with over 5,000 domestically funded enterprises, mainly devoted to OEM business for foreign brands.
About 90 per cent of manufactures are small- and medium-sized enterprises, with annual turnover in the industry at less than 50 million yuan (US$6.3 million).
Since foreign brands have sped up their expansion in China from 2003, local firms only hold about 20 per cent of the market here.
Part of this is due to buyouts. French firm L'Oreal acquired Mininurse and Yue-Sai in 2003-04. There are also reports that Johnson & Johnson will take over Dabao. US-based Avon is recently reported to be merging with local personal care brand C-Bons.
International giants have found taking over local firms is one of the most effective ways to expand to second and third-tier regions, or medium- and low-end markets.
Industry experts said China's cosmetic industry is still in its nascent stages at only 20 years of experience, while developed nations have over 100 years' experience.
(China Daily 11/30/2006 page1)