Korean Beauty Trends & Industry News: 24-01-02

K-Beauty's Small Indie Brands Thrive in Global Market

In 2023, Korean beauty (K-Beauty) continues to captivate the global market, with small indie brands showing remarkable growth. Leading companies in Original Design Manufacturing (ODM) and Original Equipment Manufacturing (OEM), such as Kolmar Korea and Cosmax, achieved record-breaking performances this year. Their success is closely linked to the rising demand for small indie beauty brands. In contrast, industry giants like Amorepacific and LG Household & Health Care faced lower performances due to high prices and reduced consumer spending.

According to the Ministry of SMEs and Startups, these small enterprise cosmetics have shown double-digit growth rates in markets outside China, including the U.S., Japan, the European Union (EU), the Middle East, and the Commonwealth of Independent States (CIS). A key player in this growth has been CJ Olive Young, which has become a must-visit shopping destination for foreign tourists, with indie brands making up over 80% of its offerings. Olive Young has also transformed its Myeongdong store into Korea’s first global specialty store, further cementing its position as a K-Beauty hub. Olive Young's global online sales also grew by 30% compared to the previous year.

The outlook for K-Beauty in 2024 is highly positive. The Korea Health Industry Development Institute predicts a double-digit increase in cosmetic exports to North America, Europe, and Latin America. Similarly, KOTRA anticipates a more than 10% increase in cosmetic exports. This growth is attributed to the rise of indie beauty brands, directly linked to K-Beauty's popularity in international markets.

In China, Amorepacific and LG Household & Health Care recorded disappointing performances. Consequently, these companies are planning to focus on strengthening global business capabilities and exploring new markets. Amorepacific plans to expand its activities centered on North America, Japan, and the EMEA region, while LG Household & Health Care is seeking new growth engines in overseas markets.

Overall, the K-Beauty industry, driven by the success of small indie brands and diversification in global markets, is experiencing significant growth. This trend highlights K-Beauty's position not just as a part of the Korean Wave but as a globally popular industry, with strategic moves from manufacturing and sales companies expected to continue in the future.

Shinsegae Duty-Free Supports Over 70 Small Beauty Enterprises

Shinsegae Duty-Free is actively supporting the entry of domestic small businesses into large distribution networks by participating in the SMEs cooperation project under the Ministry of SMEs and Startups. Through this collaboration, products from over 70 selected small beauty enterprises will be sold at up to 50% discounted prices in Shinsegae Duty-Free’s online and offline stores. Brands like Torriden, Anua, Skin Angel, Ground Plan, and Donggubat are included.

Since its establishment in 1995, the SME Distribution Center has been operating various support projects for market entry and capability enhancement of small businesses. Shinsegae Duty-Free plans to strengthen cooperation with the SME Distribution Center to further support small businesses.

A Shinsegae Duty-Free representative expressed excitement about this collaboration, stating, "Through this partnership, we are pleased to introduce competitive domestic small business products to foreign tourists. We aim to create opportunities for mutual growth by expanding the duty-free market access for these enterprises." This cooperation is expected to provide new market opportunities for domestic small businesses while offering consumers a variety of quality products at affordable prices.

Namwon City to Boost Natural Cosmetic Industry with New Testing and Clinical Trial Center

Namwon City in North Jeolla Province is pushing forward with the construction of the Natural Cosmetic Testing and Clinical Trial Center, securing a total project cost of 19 billion won, including 4 billion won in national funding for 2024. This initiative results from the city's persistent efforts in collaboration with the Ministry of Health and Welfare, the Ministry of Strategy and Finance, and Congressman Lee Yong-ho.

In 2023, Namwon secured 510 million won for the detailed design of the center, planning to complete it by January 2024 and finish the facility construction by 2025 with the newly secured national funding.

The center, with a total floor area of 4,261 square meters over four floors, will provide one-stop services including testing, certification, and skin clinical trials, especially targeting small and emerging businesses in the southern region, including North Jeolla, Gwangju, South Jeolla, and South Gyeongsang provinces.

Following the completion of the Cosmetic Business Rental-type Knowledge Industrial Center in July 2022, this new center is expected to attract promising cosmetic companies and create local jobs. Mayor Choi Kyung-sik of Namwon City has plans to solidify the city’s position as a hub for the cosmetic industry in the southern region and transform the local industrial ecosystem into a bio-industry, focusing on the development of natural bio-materials.