Success in the Japanese Market, K-Beauty Brands and SMEs, Receive Attention Overseas
As South Korea's two cosmetics giants, Amorepacific and LG Household & Health Care, show different results, SMEs and K-Beauty brands are making their mark overseas. Amorepacific succeeded in turning a profit, recording a growth rate of over 30% in the Japanese market compared to the previous year. In contrast, LG Household & Health Care faced a challenging situation with decreases in both sales and operating profit.
SMEs such as Clio, Aekyung Industry, Cosmax, Joseon Beauty, and Witch Factory are continuously setting new records and maintaining growth. Especially, K-Beauty brands are achieving brilliant results in the Japanese market, beating France to take the lead in Japan's imported cosmetics market, a result seen as effectively leveraging the changed preferences of Japanese consumers after COVID-19.
In the global K-Beauty boom, Korean SME cosmetic companies are receiving rave reviews in the world market. Their success factors appear to be quick trend identification, product reflection, and effective social media marketing, which also have a positive impact on ODM companies.
Major companies like Amorepacific and LG Household & Health Care are focusing on enhancing accessibility to the Japanese market by introducing O4O (Online for Offline) strategies, planning large-scale promotional events, and placing various brands in local major beauty shops and online malls. However, for Korean cosmetics brands to achieve sustained success in Japan, the importance of brand sustainability and product development tailored to Japanese consumers' characteristics is being emphasized.
Children's Cosmetic Safety Check, Three Companies with Poor Management Identified by the Korea Food and Drug Administration
In the safety management inspection of infant and children's cosmetics conducted by the Korea Food and Drug Administration (KFDA), three companies were revealed to have failed to fulfill their obligation to produce and keep safety data. This inspection was conducted to verify compliance with the infant and children's cosmetic management system introduced after the amendment of the Cosmetic Act in 2019.
The KFDA carried out inspections on 36 top companies in terms of production and import performance (with a market share of 80%). Of these, three companies were found not to have complied with the obligation to produce and keep safety data according to the Cosmetic Act. Administrative sanctions were requested for the relevant companies.
According to this, offending companies will face punishments such as a one-month sales or relevant product sales business suspension for a first violation, a three-month suspension for a second violation, a six-month suspension for a third violation, and a 12-month suspension for four or more violations.
The KFDA recommends that cosmetic responsible sellers have data to determine whether the cosmetics they are planning to develop are safe for children, and to continue collecting safety information even after sales and to handle it promptly.
The KFDA also stressed the importance of storing cosmetics out of children's reach since there are cases where children eat cosmetics out of curiosity, and of letting children know that cosmetics are not for eating. Especially, infants or children under 13 years old are prohibited from using cosmetics containing colorants Amaranth (Red No. 2) and New Coccine (Red No. 102), so they should check product labeling carefully and use accordingly.
The KFDA said that if symptoms such as skin turning red, itching, or swelling appear, use should be stopped immediately and the user should visit a hospital for medical consultation.
The KFDA announced that it will continue to check and take measures so that infant and children's cosmetics can be used safely.
Lotte Department Store Launches 'K-Beauty Tour' Service for Foreign Tourists
Lotte Department Store announced on the 7th that it will launch a 'K-Beauty Tour' service to provide a K-Beauty experience for foreign tourists visiting Korea. The service reflects the growing popularity of K-Beauty alongside an increase in foreign tourists. Starting at its main branch, Lotte Department Store plans to expand the service to branches in Jamsil, Busan, and more.
Foreign tourists will receive a K-Beauty pouch for free, allowing them to try various brand products. The value of this pouch, containing large-sized samples from 12 popular K-Beauty brands, exceeds 150,000 won when converted to the full-sized product value. There will also be K-Beauty classes for experiencing Korean culture and beauty trends simultaneously. These classes will be held on a first-come, first-served basis, considering each country's preferred brands and languages.
The beauty salon will operate from the 8th, and visitors can receive makeup services from professionals. Foreign tourists who spend over 1 million won at the main store will receive free customized consulting and makeup services, such as skin expression, lip & cheek, eye makeup, and more.
The goal of Lotte Department Store is to position its beauty stores as a must-visit course for foreign tourists and a new destination representing K-Beauty. This service is based on the fact that the sales of beauty products purchased by foreign tourists at Lotte Department Store have increased fivefold compared to the same period last year. Especially the Myeongdong main branch showed this trend with a sevenfold increase in sales during the same period.
Through this service, Lotte Department Store expects to provide foreign visitors with new opportunities to experience Korean beauty and culture, while simultaneously enhancing the global recognition of K-Beauty brands.
Online E-Commerce Advances into 'Luxury Beauty', a Heated Battle among Market Kurly, Coupang, and Olive Young
The competition in the beauty sector within the online e-commerce industry is heating up. E-commerce companies like Market Kurly, Coupang, and CJ Olive Young are fiercely competing in the high-end cosmetics market, dubbed as 'Luxury Beauty'.
Market Kurly, known as a food-centric market, has launched a beauty-specialized platform 'Beauty Kurly', implementing a high-end strategy. Coupang, on the other hand, is aiming to increase its beauty market share through the 'Rocket Luxury', a dedicated section for high-end beauty brands. Responding to this, CJ Olive Young is throwing down the gauntlet by showcasing a variety of premium brands through its online mall's premium section.
Simultaneously, Kurly is operating a strategy to attract customers by launching a paid membership service, 'Kurly Members', at 1,900 won(about $1.6) per month. This membership provides benefits like rewards points, coupon packs, exclusive discounts, and opportunities to purchase exclusive products. Kurly has also signed a business agreement with BGF Retail to promote offline platform-based joint businesses.
The online beauty market competition is also putting pressure on SSG.com and Lotte On, which have been running beauty businesses, to secure new customers. Although there are views that it is difficult to gain loyalty with a high-end strategy due to the burden of brand placement, Kurly, Coupang, and CJ Olive Young are showing efforts to overcome these doubts and suspicions with clear strategies and services.
Consumer response has been lukewarm so far, but attention is focused on the fact that these three e-commerce platforms are emphasizing a 'Luxury Beauty' strategy for selling high-end cosmetics. Whether they can attract department store consumers online is expected to be a crucial factor in the future e-commerce market competition.
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