Research On Information Asymmetry In Internet Marketing Of Cosmetics Industry

Since the economic reform, the cosmetic industry in China develops very fast. In 1979, there were about 200 cosmetics companies. Up to now, China has become the third largest cosmetics market in the world. Chinese local cosmetics companies develop rapidly, and foreign cosmetics companies have been flocking to China because of the reducing of import tariffs. Chinese local cosmetics companies compete with foreign cosmetics companies fiercely.In the 21 st century, the rapid development of internet brings great opportunities to cosmetic industry. The network marketing is the key for successful competition. This paper analyzes the network marketing of cosmetic industry. This new form of business seems have a smooth development, but it also exist a lot of asymmetric information problems, which may impede the development of cosmetics market and even create contraction of the market. This paper analyzes the asymmetric information problems existing in cosmetic’s network marketing and its causes, and then puts forward a series of suggestions to solve the asymmetric information.This paper is composed of 6 parts: The first part introduces the background of cosmetic industry, and summarizes the literature of asymmetric information, then points out the research significance; The second part introduces the theory of network marketing and asymmetric information; The third part analyzes present situation of network marketing of cosmetic industry, and then find out its features. The fourth part analyzes the asymmetric information problems, its causes and bad influences; The last part introduces a lot of suggestions against asymmetric information problems in three aspects of government, industry and company.