Korean Beauty Trends & Industry News: 23-11-13

K-Beauty Drives Small Business Exports Amidst Global Challenges - Q3 Performance Analysis

In the third quarter of 2023, small business exports in Korea slightly decreased by 0.9% compared to the same period last year, amounting to $27.46 billion. Despite global challenges like high interest rates and China's economic slowdown, certain sectors like cosmetics and automobiles have shown robust growth. Notably, the cosmetics sector, fueled by the global popularity of K-Beauty, saw a remarkable 24.7% increase in exports, reaching $1.4 billion. This surge was primarily due to strong performance in markets like the U.S., Japan, the EU, the Middle East, and CIS countries.

Small businesses fared better in terms of export reduction compared to larger corporations, which saw significant declines. The number of small businesses engaged in exports grew by 2.5%, and new exporting companies increased by 7.9%, indicating a positive trend in the sector's export performance. However, exports to China and Russia decreased significantly due to China's industrial self-reliance policy and Russia's economic downturn caused by war and tightened export controls.

Cho Won-young, the director of global growth policy for small and medium enterprises, highlighted that despite external challenges, the decrease in exports for small businesses was less severe than that for larger firms. The upward trend in exports since August is expected to continue into the fourth quarter.

Missha Emerges as a Leader in Japanese Market for Korean Cosmetics

Missha, a cosmetics brand under Able C&C, has achieved top recognition and sales among Korean cosmetics brands in Japan. According to a study by Japan's largest research institute, Fuji Keizai, Missha has the highest brand recognition among Japanese women aged 20-50. The brand's sales in Japan have been increasing, with last year's total sales reaching 4.6 billion yen, a 64% increase from 2.8 billion yen in 2018. The brand has seen a 13.1% average annual growth over the past five years, particularly excelling in the online sector with an annual growth rate of 41.1%.

Missha's presence in Japan's base makeup market is strengthening. The market, which was valued at 257.9 billion yen in 2022, is expected to grow to 277 billion yen in 2023, a 7% increase. Missha's yearly sales share in this market rose from 9th place in 2020 to 6th in 2022. Kang In-gyu, head of Missha Japan, noted that although the Japanese basic skincare market traditionally favors local brands, Missha has gained significant traction, particularly with products like its Vitamin C ampoule. The brand, with brand ambassador Sana from Twice, is focusing on trendy new products and expanding its online and offline distribution networks, further solidifying its position in the Japanese market.

Missha has expanded to about 30,000 stores worldwide in 41 countries. Able C&C continues to strengthen its global beauty market presence with a diverse brand portfolio, including Missha.

Urgent Need for Reliable Vegan Certification Amidst Confusion

With the rise in eco-friendly consumer trends, the vegan movement is gaining momentum in the food and cosmetics sectors. However, the reliability of vegan certifications, mostly operated by private organizations with varying standards, is causing consumer confusion. In the cosmetics sector, there's a lack of clear regulations for vegan products under domestic cosmetics laws. Similarly, in the food sector, the Korea Food and Drug Administration has not officially recognized any vegan certification organizations. Efforts to define veganism through 'Food Vegan Labeling and Advertising Guidelines' are ongoing, but legal standards are yet to be established.

Kwon Yu-jin, the director of the Korea Vegan Promotion Institute, is working to enhance the credibility of certifications through genetic testing and on-site audits. Kwon, with her experience from the Korea Food and Drug Administration, points out the shortcomings in the current vegan and vegetarian certification processes and offers various certification categories and educational programs through the institute.

Experts emphasize the need for a well-established certification system and involvement from credible organizations to reduce consumer confusion and harm, considering the growth of the vegan market and product development. They advocate for government intervention to ensure consumer choice and increase the system's credibility.