Interview 6: Cosmetics Business

Interview 6: Cosmetics Business

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Starting from 2006, the Chinese cosmetics market sales annually reach more than 100 billion Yuan, which still maintains a sustained and stable growth even in the harsh environment of the global financial crisis. There are about 25000 kinds of cosmetics produced by China with complete variety. In 2010, there were about 3300 cosmetics companies in China with a valid production license and the national cosmetics sales reach 153 billion Yuan. There are rich kinds for customers in different consuming levels in the competitive market. With strong brand awareness, customers rapidly expand the demand for the cosmetics in the high-grade and middle-grade cosmetics.

In this context, China Chemical & Electronic Business Unit of Sumitomo with the comprehensive strength and global network as an integrated trading company carried out the cosmetic raw material import and export business in 1998 to supply basic raw materials for the cosmetics industry and focused on the advancing industrialization of the Chinese cosmetics. This time, we especially interview General Manager Ma Weimin, Senior Product Manager Wang Yuqing and Assistant Manager Xian Shaomin from Performance Chemical Department of China Chemical & Electronic Business Unit, and there will be the revelation for the cosmetic raw material import and export business of Sumitomo Corporation in China.

1.Cooperation with international well-known cosmetics brand and Japanese raw material production enterprise to carry out business in China

Supply raw materials for clients
Supply raw materials for clients

Manager Wang Yuqing explains to us, "Functional chemical department started cosmetic raw material supply business in 1998 and it mainly conducts between Shanghai and Guangzhou and the customers from Unilever, P&G (Procter & Gamble), Shiseido, J&J(Johnson & Johnson) , Mentholatum, L'Oreal and other well-known brands."

The chain mode of Sumitomo Corporation cosmetic raw material supply business is: Firstly, we import raw material from Japan to supply domestic multinational companies; secondly, we serve the Japanese-owned manufacturers as the exclusive agent and developing the customers in China and the promotion of raw materials; thirdly, we search for the required raw materials in the worldwide for the domestic customers.

Sumitomo Corporation conducts business with three advantages. The first one is its global network and comprehensive competitive force, as a comprehensive trading company that provides platform by the cooperation with its chemical partner: Sumitomo Shoji Chemicals Co., LTD., it gathers Japanese raw material and supplies to China; the second one is the relatively strong funds which help suppliers reduce liquidity pressure; the third one is the emphasis on services to help customers reduce cost and the development of one-stop service from the procurement of supplies to assist customers JIT (Just-in-time) delivery, as well as the marketing and development service of the finished product.

Sumitomo was awarded the The Best Supplier by P&G (Guangzhou)in the years of 2009 and 2010.
Sumitomo was awarded the
"The Best Supplier" by P&G (Guangzhou)
in the years of 2009 and 2010.

"We have ever offered exclusive research materials to Unilever" Wang Yuqing recalls, "The suppliers have different specifications and we cooperate with them and develop an exclusive mode for Unilever according to its requirements about particle size, function and surface treatment, etc." This shows our development of research function.

As the exclusive agent of Japan TAYCA in China, Sumitomo Corporation develop jointly with P&G and other large companies in China to explore the conceptual products. Assistant Manager Xian Shaomin in Cosmetics Raw Material Section of Performance Chemicals Department in Guangzhou is also involved in the development of many cosmetic raw materials for familiar brands. "Each year customers will launch a concept such as 'whitening', "extracting from plants", etc. They require suppliers to recommend the appropriate ingredients to figure out a suitable raw material composition in the worldwide. This is a bi-functional research and development. The functions of Sumitomo Corporation are gathering information, communicating and delivering customers' requirements to the Japanese TAYCA accurately and timely."

"In addition to technical support, Sumitomo Corporation can provide a lot of value-added services." Xian Shaomin says with pride, "For example, P&G in Guangzhou conducted a research and development of new products, which we timely feedback to the customers with a variety of domestic legal provisions, such as whether they have been filed in the case of new raw material registered, whether they are involved in the latest National Hazardous Chemicals, whether there is a particular requirement of use or storage from raw material suppliers."

 Supply Chain model of Sumitomo
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Interview 1: Wheat Flour Business
Interview 2: Fertilizer Business
Interview 3: Sulfuric Acid Business
Interview 4: Iron Ore Business
Interview 5: Coil Center Business
Interview 7: Real Estate Development Business