Press Release

On a busy street in Hangzhou, a southern Chinese city, a large billboard on the outside of the Yintai Department Store towers above throngs of fast-moving pedestrians. The board bears a picture of a LG cosmetics set and the face of Korean actress Kim Jeong-hwa.

The largest commercial billboard in all of China was set up by none other than LG Household and Health Care (LG H&H), and is literally the biggest advertisement for LG H&H`s limber move into the competitive Chinese cosmetics market - hitherto mostly dominated by other foreign brand names.

LG H&H`s advancement into China began in full force in 1996, when the company established Hangzhou LG Cosmetics Co. in Hangzhou - a Chinese mecca for beauty products and personal care items in the country. The new corporation, set up in collaboration with local investment, manufactures and sells one of LG H&H`s most popular brands, DeBON. The Hangzhou Corporation runs 11 branch offices in such cities as Shanghai, Nanjing and Beijing with about 500 employees in total.

Later that year, LG H&H established another joint-venture corporation, called Beijing LG Household Chemical Co. The new corporation sells products ranging from their own brand-names including DeBON, Minerva and Ezup, to imported brands like Lacvert and Isaknox. Beijing Corporation, also sells other personal care products, such as three different premium toothpaste brands. Its oriental bamboo salt toothpaste shows the most exceptional sales growth due to its familiarity in taste to Chinese consumers, the company officials explained.

Hangzhou estimates to bring in a record $1.5 million, while the Beijing operation expect to bring in $1.4million in sales this year. Their products are available in over 320 department stores, cosmetics shops, as well as three beauty care centers recently opened in Hangzhou and Nanjing.

H&H`s accomplishment so far have been heralded by industry experts in China who concede that China is one of he most complicated and competitive markets for foreign cosmetics makers, an LG spokesman said.

The cosmetics industry in China began to show a significant growth in the 1990s as part of the government`s macroeconomic development plan. The market opened to foreign makers and it rose to become the world`s eighth largest in the mid-1990s.

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