Taiwanese skincare and cosmetics enterprises yesterday lashed out at the government, saying the Economic Cooperation Framework Agreement (ECFA) has put their industry at a disadvantage, and they urged the government to grant more subsidies to boost the development of locally made cosmetic products.
Under the ECFA’s early harvest lists, Taiwan has to open up six items in the skincare sector, including bath salts, deodorants and surfactants, while China will open up surfactants to Taiwan.
Tariffs on these items range from 4 percent to 6.5 percent, but will gradually be reduced to zero in a few years after the ECFA takes effect — possibly next month.
“We must negotiate on an ‘equal footing’ with China by taking into account the output of these items and not just judge from the item numbers,” Alex Ho (何堉勳), an assistant manager of Boching Enterprise Group (伯慶事業集團), told a press conference.
Skincare product makers said as many as 70 percent of Chinese cosmetic exports to Taiwan are duty-free, while only 1 percent of Taiwan’s exports to China are.
Therefore, the ECFA fails to offer Taiwanese firms an upper hand to expand their business across the Taiwan Strait, they said.
Ho said that the annual production value of Taiwan’s skincare industry is estimated at NT$20 billion (US$625 million), with the Chinese market alone representing half of the value.
To ensure Taiwan’s competitiveness, the government should play a greater role by offering research and development grants, among other incentives, to help push Taiwanese skincare brands in global markets.
“Skincare and cosmetic products are a ‘golden goose’ for most countries [since people are placing more emphasize on their looks],” said Delphine Chen (陳乃菁), a director of international sales for Bio-Nest Biochemical Technology Co (昱智生化科技).
South Korea, for example, gives research and development grants ranging from US$250,000 to US$1 million to companies if the products they are developing show market potential, Chen said.
In addition, the South Korean government subsidizes skincare companies’ participation in international exhibitions with grants of US$100,000.
“With two staff members managing the booth, and taking into account the booth decoration fees, the grant would be a great financial relief for participating companies to get their products to shine at those exhibitions,” Chen said.
Government-backed resources explain why South Korean firms such as LG H&H and AmorePacific are able to take Asian markets by storm, Chen said.
Michibao Bio-tech Co’s (宓芝寶生技化妝品) manager Fred Lee (李俊霖) agreed, saying he hoped Taiwan would pay more attention to the skincare industry.
The firm sells products under the name “Amazing Plus” in China, but has lagged behind its South Korean and Japanese peers in terms of advertising and marketing campaigns, he said.
“The Chinese market is huge and the marketing dollars we spend pale in comparison with those of our rivals, which recruit celebrities to promote their products,” Lee said.
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