Korean Beauty Trends & Industry News: 23-11-24

K-Beauty Accelerates Market Penetration in Japan, Seeking a Comeback with New Strategies

Leading South Korean beauty companies, LG Household & Health Care and AmorePacific, are intensifying their efforts in the Japanese market to compensate for their recent underperformance in China. 

Fueled by the Hallyu (Korean Wave) boom and rising demand for Korean cosmetics in Japan, these companies are optimistic about their prospects in this new market. 

Both companies reported weak financial results in the third quarter, with LG Household & Health Care experiencing a 6.6% decrease in sales and a 32.4% drop in operating profit compared to the same period last year. 

AmorePacific also saw declines in sales and operating profit. As a response, these firms are focusing on Japan for new opportunities. 

LG Household & Health Care's makeup brand VDL has shown remarkable growth in Japan, with online sales up 282% year-on-year. 

Additionally, the company has acquired a 75% stake in the makeup brand Hince, enhancing its color cosmetics portfolio. AmorePacific is expanding in Japan through various brands like Innisfree, Laneige, Etude, Espoir, Aestura, and Hera, offering differentiated products in major Japanese beauty shops and online malls. 

The Japanese cosmetics market, valued at approximately 42 trillion won in 2021, has seen increasing popularity for Korean products, with Korean cosmetics accounting for 23.4% of Japan's imported cosmetics last year, surpassing France.

Clarification of Cosmetics Extract Content Labeling Standards - MFDS Releases New Guidelines

The Ministry of Food and Drug Safety (MFDS) of South Korea has announced new guidelines for labeling the content of extracts in cosmetics. 

This move aims to prevent consumer misunderstandings and provide accurate information by revising the 'Cosmetics Labeling and Advertising Guidelines.' The new guidelines include methods and examples for labeling extract content in cosmetics and the types of evidence required for calculating extract content. 

Importantly, the content of extracts in the finished product must exclude diluents, a shift from previous practices that sometimes included diluents in the extract content. 

For example, a cosmetic product comprising 1% green tea extract, 98% diluent, and 1% preservative should be labeled as containing 1% green tea extract, not 99%. 

Supporting evidence for extract content includes composition information of the extract separated from diluents and data verifying the amount of extract used in the product. 

The MFDS expects that the new guidelines will reduce consumer confusion about extract content and plans to continue providing updated guidance based on regulatory science expertise.

Daiso Boosts Sales with Cost-Effective Cosmetics - The Dazzling Transformation of the National Store

Daiso, a household goods specialty store in South Korea, is experiencing notable growth in the cosmetics market. 

Its cosmetics lineup, priced uniformly from 500 to 5000 won, is gaining attention for its high quality and value for money. 

The range, comprising around 250 products, has seen a significant increase in sales, growing by approximately 180% from January to October this year compared to last year. Daiso's cosmetics are popular across various age groups, with products like the VT brand's Riddle Shot creating sell-out frenzies. 

Known as the 'department store for teenagers,' Daiso has expanded its product range from cheap household goods to cosplay items, imported snacks, and hobby goods like home gardening and camping supplies. 

The company's growth strategy includes diversifying its product range and adapting to consumer needs, rivaling Chinese e-commerce offerings. 

Daiso's product development team, comprising mostly people in their 20s and 30s, actively incorporates their hobbies and interests into new product ideas. Daiso has also expanded into Disney series and original character products. With over 1500 stores nationwide, Daiso's accessibility and affordable pricing of quality products are seen as key strengths. 

The company, which surpassed 1 trillion won in sales in 2015 and 2 trillion won in 2019, is expected to exceed 3 trillion won this year. An analyst from E-Best Investment & Securities cites Daiso's accessibility, expansion into the value-for-money market, and appeal to foreign tourists as major advantages. 

Daiso plans to continue expanding its brand and trendy product offerings at uniform prices, demonstrating its success and growth in the offline retail sector.

Delay in MoCRA Enforcement Grants Additional Time for Cosmetics Industry

The U.S. Food and Drug Administration (FDA) has postponed the enforcement of certain provisions of the Modernization of Cosmetics Regulation Act (MoCRA) to July 1, 2024. 

This delay allows the cosmetics industry additional time to adapt to new regulations, which significantly impact the sector by mandating facility registration and the submission of full product ingredient lists. 

Although the original deadline was December 29, 2023, the postponement provides both domestic and foreign companies more time for compliance. 

MoCRA encompasses various regulations, including facility and product registration, product safety substantiation, labeling, manufacturing and quality control, adverse event reporting and management, recall procedures, and the inclusion of talc and perfluoroalkyl substances. 

However, not all compliance deadlines have been extended, and there is a need for detailed preparation, especially for specific product categories like eye cosmetics, which may confuse some smaller companies. 

This delay is also linked to the postponement of the FDA's Cosmetics Direct, an online platform for facility registration and product listing. Experts emphasize the need for clear standards regarding product safety management despite the delay.

Suwon City Launches 'Suwon Beauty Festa 2023' to Open New Horizons in K-Beauty Industry

Suwon City in Gyeonggi Province, South Korea, will host the inaugural 'Suwon Beauty Festa 2023' on October 24th and 25th at the Suwon Convention Center. 

This event aims to revitalize the local beauty industry and broaden its consumer base, marking it as the first beauty fair organized by a local government in the country. 

The fair will feature 97 beauty companies and organizations showcasing a wide array of cosmetic, skin, body, hair, and nail products. Spread across two main beauty halls and an advanced beauty hall, the event includes exhibitions, experience booths, and stage programs. 

A highlight is the Beauty Tech area, presenting digital tattoo devices, ultrasonic beauty instruments, and color therapy products. Additionally, local universities will host makeup, nail, and hairstyling events. 

Another significant feature is the China Distribution Consulting Zone, offering support for companies facing challenges in navigating Chinese import regulations, and featuring live sales shows and tours by Chinese influencers. 

The Suwon city representative hopes the event fosters a collaborative space for citizens and industry professionals to enjoy the vibrancy of K-beauty.