Skip to main content

Korean Beauty Trends & Industry News: 23-08-24

A pig surrounded by a cosmetics.

South Korean Cosmetic Industry Favors Big Players Post-Pandemic; Too Many Companies in the Market

According to a recent report, the South Korean cosmetic industry has been tilting in favor of major companies since the COVID-19 pandemic. An analysis of data from the Ministry of Food and Drug Safety by the Skin-Based Technology Development Division revealed an expanding market centered around large corporations.

As of 2022, there were 28,015 authorized cosmetic resellers and 4,548 manufacturers, showing a 7.2-fold and 3.0-fold increase respectively since 2013. Despite this growth, only 36.1% of these resellers actually reported production figures, and a mere 7.2% are actually producing products.

Smaller manufacturers are increasingly being pushed out. Companies with production exceeding roughly $84 million account for only 0.1% of all manufacturers but hold 67.9% of total production. In contrast, companies with less than about $8.4 million in production make up 92.8% of all companies but contribute only 4.0% to production.

Industry experts are concerned that this imbalance is hampering the healthy growth of the cosmetic sector in Korea, highlighting the urgent need to support and sustain small and medium-sized enterprises (SMEs). Products aimed at hair loss have increased by 3.1 times over the last six years, and functional cosmetics have also risen by 10.2%. However, the overall market for functional cosmetics has been shrinking since 2019.

Last year's total production stood at roughly $11.3 billion, a decline of 18.4% compared to the previous year due to reduced exports to China. Basic cosmetics account for 55.4% of total production, while personal cleaning products increased by 5.8%.

The Skin-Based Technology Development Division emphasized the need for policies that support SMEs and reduce the excessive number of companies in the sector.


Coupang Accelerates Beauty Market Strategy with New Experience Store in Seoul

E-commerce giant Coupang has opened a 'Beauty Virtual Store' in the Seongsu-dong neighborhood of Seoul, marking the company's first offline cosmetic experience event. The event is part of Coupang's beauty promotion campaign called 'Mega Beauty Show.' Fifteen cosmetic brand booths were set up, offering various interactive events.

Customers who made purchases worth around $17 received a beauty box worth about $110 on a first-come, first-served basis. The opening day was fully booked with long waiting lines, highlighting the high level of interest. Coupang recorded approximately 10,000 visitors in just three days and also offered consulting services to smaller beauty companies.

Since 2021, Coupang has been aggressively entering the beauty market, registering an 18% year-over-year growth in online cosmetic sales. Last month, it launched a luxury beauty product section called 'Rocket Luxury' to further strengthen its competitive position in the cosmetic market.

This move clearly shows Coupang’s ambition to capture a bigger slice of the cosmetic market, relying on credibility and a diverse product range. Industry insiders are closely watching how Coupang will differentiate itself in a market where other e-commerce platforms are also looking at cosmetics as a growth engine.


Shopee Leading in Southeast Asian E-commerce Market; Strengthening Support for Korean SMEs

Shopee is a global open-market e-commerce platform focusing mainly on Southeast Asia. The company sees platforms like TikTok as competitors, emphasizing entertainment elements to claim the top spot in the region. Kwon Yoon-ah, the head of Shopee Korea, stated that TikTok’s focus on entertainment and ease of transition to commerce make it a formidable competitor.

In Korea, Shopee is assisting local sellers, especially K-Beauty brands, to sell their products in Southeast Asian and Central and South American markets. Local storage and delivery are managed by Shopee’s local staff. Recently, there has been a surge in orders for Korean products from Mexico, Brazil, and Thailand, largely attributed to the popularity of Korean culture and K-Pop.

Shopee has also enhanced its new service, 'SLS Plus+', offering increased compensation for issues like returns, refunds, and lost items. For any problems that arise during international sales, Shopee plans to automatically compensate sellers up to $200.

The Seoul Regional Small and Medium Business Administration is planning to hold an online marketing seminar on utilizing Shopee for the Southeast Asian market. This educational initiative aims to help Korean SMEs to digitally expand their exports.

Shopee is rapidly growing not only in Southeast Asia but also globally, providing Korean SMEs an easier route to break into international markets.


Location: South Korea

Comments

Post a Comment

Popular posts from this blog

Which sunscreen should I use, Inorganic or Organic?

Overview There are mainly two types of sunscreen: Physical and Chemical.  Inorganic sunscreens are also called Physical Sunscreen or Mineral Sunscreen. Organic sunscreens are also called Chemical Sunscreens. A term Inorganic and organic are derived from chemistry. * Organic Chemistry: The Study of Molecules Based on Carbon, Hydrogen, and Nitrogen * Inorganic Chemistry: The study of compounds other than organic chemicals A sunscreen can, of course, have both of these functions. It is called a Mixed sunscreen or a Combined sunscreen, and these days, many brands are developing products like this. Through this post, let's find out what inorganic and organic sunscreens are, and what sunscreens are most suitable for one to use. The difference between inorganic and organic sunscreen. Inorganic sunscreen is a sunscreen that forms a protective layer on the surface of the skin to block ultraviolet rays before they penetrate into the skin. Most product contains titanium dioxide and zinc oxid...
Post a Comment
Read more

Misleading Claims in Microneedle Skincare Products: 82 Cases Identified

     Recently, microneedle skincare products have gained significant popularity, but Korea’s Ministry of Food and Drug Safety (MFDS) has uncovered that over 80% of these products being sold online are making false or exaggerated claims. After reviewing 100 online posts, the MFDS found that 82 of them violated Korea’s cosmetics regulations, leading to requests for the posts to be blocked by the Korea Communications Standards Commission. The misleading advertisements primarily claimed that microneedles could penetrate deep into the skin layers or promised immediate pore reduction, both of which are not scientifically validated for general cosmetic products. Microneedles are a medical technology designed to deliver substances into the deeper layers of the skin, typically used in drugs and medical devices. However, in the cosmetics industry, these products generally do not have the same capabilities. Some companies falsely advertised their products as having effects similar t...
Post a Comment
Read more

Korean Beauty Trends & Industry News: 24-05-08

Cosmax Leads in Cosmetics with New Hair Loss Evaluation Technology      Cosmax, a South Korean cosmetics company, has announced the development of a novel hair loss evaluation method using "hair and follicle mimicking organoids." This technology was showcased at the 2024 Organoid Developer Conference in Seongnam, Gyeonggi Province last month.  Organoids, made from stem cells, excellently replicate human cellular structure and function. In collaboration with OrganoidScience, Cosmax has successfully recreated androgenetic hair loss symptoms by introducing growth factors into reprogrammed stem cells to create a scalp mimic.  Furthermore, their proprietary ingredient "Soyact" has been validated for its effectiveness in suppressing male pattern baldness and received non-prescription functional certification from the Korean Ministry of Food and Drug Safety. Cosmax sees this technology not only advancing hair loss treatment materials but also setting a new standard in ...
Post a Comment
Read more