Korean Beauty Trends & Industry News: 23-09-06

Current and Future Landscape of South Korean SME Exports and the Chinese Cosmetics Market

Over the last three years, the COVID-19 pandemic has led to a decline in the number of South Korean small and medium-sized enterprises (SMEs) involved in exports. The number dropped from 154,430 in 2019 to 151,479 in 2021, with even the first half of the year showing a decrease from 76,108 in 2020 to 73,933 in 2022. Surprisingly, total exports from SMEs hit a record high of $117.1 billion, indicating that the size of exports per enterprise increased while the total number of exporting enterprises shrank.

This situation arises from a combination of factors like China-related risks, a decline in product competitiveness, and a global economic downturn. Policies and surges in raw material costs in China have been especially detrimental to South Korean SMEs, including those in the cosmetics industry.

The 'Made in Korea' label for cosmetics is losing traction in China. According to Chinese government data, unless a new product can adequately meet the quality, innovation, and unique needs of Chinese women, market entry becomes difficult. Local Chinese cosmetics brands are growing, thereby replacing imported brands. South Korean brands are struggling with low brand awareness and lack of innovation in China.

In response, the Korean government is exploring multiple strategies, including fostering co-exports between large and small enterprises, encouraging digital trade, and expanding trade financing options. Long-term growth plans backed by systematic analysis and innovative product development are also under consideration.

Despite the expected slowdown in export growth, projections indicate a 4.3% increase in SME exports this year. In summary, while SME exports are increasing, the decline in the number of export-driving SMEs remains a concern that needs to be addressed.

Customs Authorities Flag Import Violations in Cosmetics and Pharmaceuticals; Highlight Enhanced Safety Protocols

From January to August, South Korea's Customs Service confiscated around 19 million illegal imports worth approximately $583 million. Among these, "functional cosmetics" with unverified safety accounted for a significant portion worth around $246 million.

Upon investigating over 2,000 importers of cosmetics and pharmaceuticals, they found 13 companies with high-risk profiles. Seven of these companies had not followed the pre-approval process, totaling around $91 million worth of goods. Customs is currently exploring corrective measures.

Non-compliance with safety approvals may result in fines corresponding to the sales amount. Importers were also advised to pay close attention to the Harmonized System Code (HSK CODE), crucial for determining import taxes and safety requirements.

According to the Customs Authority, complying with regulations and requirements upon import is critical for both consumer safety and enabling companies to import safe products.

L'Occitane Leads Beauty Industry Through Environmental and Social Responsibility Projects

On September 8, L'Occitane is launching its '2023 Cocon de Sérénité Relaxing Solidarity Hand Cream.' The product contains 97% natural ingredients, including shea butter and lavender scent. 100% of sales revenue will be donated to projects for blindness prevention. For the last 20 years, L'Occitane has been actively involved in blindness prevention and donates all revenue from its 'Caring for Sight' campaign every year.

Child blindness is a major issue in developing countries, yet most cases are preventable. L'Occitane aims to protect the sight of approximately 20 million people by 2025. Besides, the company contributes to environmental protection by launching products like the '2023 Verbena Extract Solidarity Balm' for biodiversity conservation.

Through such activities, L'Occitane emphasizes the importance of ESG (Environmental, Social, Governance) management and actively deploys diverse strategies for sustainable management and social responsibility. Other cosmetic companies also showcase creative marketing strategies, such as Peripera collaborating with beauty creator 'Pony' for a limited promotion of their 'Ultra 24/7 Pore Defense Ampoule.'

"hy" Announces the Release of 'LETI7714 Triple Lift-Up Cream' After 10 Years of Research

On the 6th, hy (Korean Yakult) has released an anti-aging cosmetic product called 'LETI7714 Triple Lift-Up Cream.' This is the second cosmetic product utilizing fermented probiotics 'Skin Lactobacillus 7714.' The first product, 'NK7714 Hyper Boosting Ampoule,' achieved its annual sales target within three months of its release.

LETI7714 is the result of 10 years of research and has a dual formulation containing highly concentrated nutrient cream and booster. The cream combines retinoids, bakuchiol, and Adenosine, an FDA-approved functional ingredient, to create a triple-layered anti-aging design. The booster contains over 10,000 pink microcapsules filled with Skin Lactobacillus 7714.

According to the brand, 18 different human application tests confirm the product's anti-aging effects. Seo Il-Won, the team leader of hy Platform Sourcing, explained that the range of probiotic applications has expanded from gut health to skincare. The brand plans to continue enhancing its cosmetic lineup based on consumer preferences.