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Korean Beauty Trends & Industry News: 24-03-22


Sephora Decides to Exit the Korean Market, Falling Behind in Competition with Olive Young

    Sephora, a global cosmetics retailer owned by the luxury group LVMH, announced its withdrawal from the Korean market despite expanding its presence since its 2019 entry. The retailer struggled against the dominant market position of CJ Olive Young, especially during the COVID-19 pandemic and shifts towards value-focused consumer trends, leading to a decrease in high-end product sales. 

Sephora plans to cease operations of its online and physical stores in Korea by May 6. This exit is predicted to significantly impact the beauty industry, further solidifying Olive Young's dominance, while marking a challenging chapter for international brands in Korea due to a misalignment with local consumer preferences and market dynamics.


LG Chem Introduces Eco-friendly Cosmetic Containers Made from CO2

    At the 'Cosmoprof Bologna 2024', the world's largest beauty industry event held in Bologna, Italy, LG Chem unveiled a new type of eco-friendly plastic for cosmetic containers, made from carbon dioxide (CO2). This innovative material, polyethylene carbonate (PEC), is produced using captured CO2 and ethylene oxide, boasting the highest productivity among existing CO2-based plastics. 

This advancement reflects the growing trend towards sustainable packaging in the beauty industry, driven by regulatory pressures like the EU's carbon border tax. LG Chem's move not only supports environmental protection but also indicates a shift towards sustainable development within the cosmetics sector.


CJ Olive Young Nears the '4 Trillion Club', Surpassing Major Cosmetics Companies

    CJ Olive Young recorded sales of 3.8612 trillion KRW last year, nearing entry into the '4 trillion club' of the cosmetics distribution sector, marking a 40% increase from the previous year. This growth was significantly fueled by the popularity of "Olive Young shopping" among domestic and international tourists, particularly at its Myeong-dong location, attracting an average of 2,000 foreign visitors daily. 

Additionally, Olive Young has expanded its global reach by distributing K-beauty products to over 150 countries through its online platform, showcasing its evolution from a local retailer to a global K-beauty platform. Olive Young's success highlights a shift in Korea's beauty industry ecosystem, from major brands to emerging small and indie brands, contributing to the global prominence of K-beauty.


LG Household & Health Care Sees Surge in Target Price Due to Duty-Free Cosmetic Sales Recovery

    Shinhan Investment Corp has raised the target price for LG Household & Health Care by 41%, anticipating a rebound in duty-free cosmetic sales. Projected to surpass market expectations, LG H&H reported first-quarter sales of 1.6582 trillion KRW, with an operating income of 130.4 billion KRW, attributed to the revival of duty-free sales, particularly of its 'Whoo' brand. This adjustment reflects confidence in the continuous recovery of duty-free performance and potential improvement in the Chinese market. 

Shinhan maintained a 'buy' recommendation, noting significant upward revisions in earnings forecasts for 2024-2025, driven by the momentum in duty-free sales recovery and the expected growth from newly launched beauty brands aligning with indie beauty trends.
Location: 한국

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