Korean Beauty Trends & Industry News: 23-10-20

Korea Kolmar Acquires Full Ownership of Cosmetic Packaging Firm Yeonwoo to Boost Efficiency

Korea Kolmar has decided to fully acquire Yeonwoo, a cosmetic packaging manufacturer. The stock exchange date is set for February 14th next year, and using a comprehensive stock exchange system, the company plans to secure 100% of Yeonwoo's shares (up from the current 55%). This decision has already been approved by the board of directors and, upon completion, Yeonwoo will be delisted from the stock market.

The move aims to eliminate inefficient structures like dual listings and enhance decision-making speed for greater operational efficiency. Shareholders opposing the stock exchange can demand stock purchases until January 8th of next year.

Korea Kolmar, a major shareholder and ODM (Original Design Manufacturer) in cosmetics, plans to focus more on shareholder value and business activities through this acquisition. Yeonwoo also aims to strengthen its core role in cosmetic packaging and maximize synergy between the two companies through R&D collaboration focused on eco-friendly packaging technologies.

A representative from Korea Kolmar stated, "We aim to maximize corporate value through this comprehensive stock exchange and will continue to explore various ways to reward shareholders."

Controversy Over Cord Blood Stem Cell Cosmetics: What Lawmakers and FDA Reveal

Cord blood stem cell cosmetics are at the center of recent controversy. Health and Welfare Committee member Kim Young-Joo and the Korean FDA have identified problems and promised stronger regulations. Despite high price tags and claims of diverse benefits, these cosmetics violate legal and safety standards as they don't actually contain cord blood stem cells. Moreover, some companies are directly sourcing cord blood from obstetrics and gynecology clinics, raising potential issues related to cord blood trading.

These high-priced cosmetics, sold through home shopping, dermatology clinics, and online, falsely advertise benefits such as anti-aging, skin elasticity, hydration, pore reduction, whitening, and wrinkle improvement. No evidence supports these claims, and the FDA stated that other ingredients are at play.

Kim Young-Joo emphasized the need for comprehensive investigations into the false advertising and illegal usage of these cosmetics. The FDA is also considering administrative measures against false advertising and non-compliance with safety standards. Additionally, there is a high likelihood of gaps in cord blood management as there is no way to assess the suitability of cord blood. Therefore, stronger regulations and monitoring of cord blood stem cell cosmetics are expected to follow this controversy.

IBITA and France's Cosmetic Valley Team Up to Boost K-Beauty in Europe

The International Beauty Industry Trade Association (IBITA) and France's Cosmetic Valley have inked a deal at the Louvre Museum in Paris. The partnership aims to bolster the expansion of the Korean beauty industry—commonly known as K-Beauty—into the European market and actively support South Korean beauty companies and startups in their global ventures.

Established in 1994, France's Cosmetic Valley is the world's first beauty industry network, featuring over 100 French cosmetics companies as well as member firms from Japan and Korea. France accounts for 35% of K-Beauty sales in Europe, and interest in K-Beauty is surging, thanks in part to the influence of the Korean Wave (Hallyu).

IBITA plans to use this partnership to strongly support the domestic beauty industry, which has seen a 21.3% growth year-over-year, in entering the European market. It has already been cooperating with famous brands in the UK like Dir and Sebahan to facilitate Korean innovators' expansion into Europe.

Key aspects of the agreement include establishing partnerships, promoting products and opening export channels, training research personnel, and initiating joint projects. The presidents of IBITA and France's Cosmetic Valley have highly rated the potential of K-Beauty in the European market and announced plans for more support and cooperation through the partnership.

Daiso's Beauty Counteroffensive: Shining in Competition with Drugstore Brands

Daiso is making waves in the cosmetics market by collaborating with one-brand shop The Saem to launch 'Dropby Colors,' a vegan makeup line. This new line adds to Daiso's existing array of 13 basic cosmetics brands, four color cosmetics brands, and one men's cosmetics brand.

Year-over-year, Daiso's cosmetics sales have surged by approximately 160%, acting as a new sales channel amidst declining revenues for drugstore (or 'roadshop') brands. Daiso is also gaining attention for competing effectively against Olive Young, a subsidiary of CJ OliveNetworks. For example, Daiso sells a VT Liddell Shot Lifting Serum, normally priced at around $30, for just $3, showcasing its pricing power.

Daiso is expanding its customer base, focusing mainly on the Millennial and Gen Z demographics. They are collaborating with renowned domestic cosmetics firms like Korean Kolmar, Cosmax, and Cosmecca Korea to offer quality products. Thanks to such various collaborations and a low-price strategy, their sales from January to June have increased by roughly 70% year-over-year.

Operating over 1,450 stores nationwide, Daiso offers great accessibility but has the drawback of inconsistent product line-ups across stores and lack of testers in some locations. Nevertheless, Daiso plans to overcome these challenges by continually offering a diverse range of cosmetics at uniform prices.