Korean Beauty Trends & Industry News: 24-05-28

The Rise of Budget Beauty Products and Changing Consumer Trends

    As consumer prices continue to rise, interest in ultra-low-cost products has surged. Stores like Daiso have become particularly notable. According to the '2024 Consumer Trends Series: Ultra-Low-Cost Consumption' report by MezzoMedia, Chinese ultra-low-cost commerce, known as C-commerce, is gaining traction, with cosmetics priced under 5,000 KRW (~$4) becoming especially popular.

A survey conducted by MezzoMedia with 410 e-commerce consumers aged 19-49 found that 34% have purchased from AliExpress. The primary reasons were 'low prices' (68%), 'variety of products' (40%), and 'convenient ordering and payment' (16%). AliExpress has recently introduced services tailored for South Korea, including a local customer service center and shorter delivery times.

Additionally, Temu is offering aggressive marketing strategies, such as providing coupons worth about 130,000 KRW (~$100) for new sign-ups and paying commissions for friend referrals. However, there are growing concerns about the safety and quality of products supplied by AliExpress and Temu, leading to increased government scrutiny.

Daiso is also gaining attention with its budget cosmetics, such as VT Riddle Shot Facial Boosting First Ampoule, Son & Park Art Spread Color Balm, and TAG Dual Multi Shading, all priced under 5,000 KRW. A survey indicated that 41% of female consumers aged 19-49 have purchased Daiso cosmetics, with 72% expressing satisfaction. The main reasons for purchase were 'good performance for the price' (69%), 'low prices' (48%), and 'satisfactory quality' (32%).

As a result, Asung Daiso has expanded its store count by 129 over the past three years and achieved annual sales of 3 trillion KRW (~$2.4 billion) last year. MezzoMedia analyzed that as the burden of inflation increases, consumers are increasingly willing to forgo brand names in favor of high-value products.

In response, traditional retailers are also emphasizing price in their marketing. Notable examples include Lotte Himart's 200,000 KRW ($150) 'Hi-Made Single-One Refrigerator', Homeplus's 10,000 KRW ($7.50) large instant meal series, 11st's 'Closeout Market', and Beauty Curly's 'Lowest Price Challenge'.

Leading K-Beauty Brand Memebox Prepares for IPO, Samsung Securities as Lead Underwriter

    Memebox, a leading K-beauty brand, is preparing for its IPO, selecting Samsung Securities as its lead underwriter. Memebox aims to become a global comprehensive beauty company through this IPO.

Founded in 2012, Memebox has grown with 'K-beauty enthusiasts,' starting with monthly curated beauty product deliveries and mobile commerce, which allowed them to collect data on diverse consumer preferences. They have since evolved into a consumer goods company operating five beauty brands: 'I'm Meme,' 'Pony Effect,' 'Kaja,' 'Nooni,' and 'I Dew Care.' These brands are popular on platforms like TikTok and social media, particularly among consumers aged 10-30, thanks to their vegan ingredients, high efficacy, unique formulations, and easy-to-use designs.

Memebox generates 90% of its revenue overseas, with nearly 50% coming from North America. Since establishing a branch in North America in January 2014, Memebox has made significant investments, successfully entering major online and offline retail channels. Products like Nooni's 'Lip Oil' and I Dew Care's 'Tap Secret Dry Shampoo' consistently rank first in their categories on Amazon. Collaborations with Sephora led to the launch of 'Kaja' in 2018, and other brands exclusive to the U.S. market, solidifying relationships with key retail partners such as Amazon, ULTA, Macy's, Nordstrom, and JCPenney.

Memebox has secured over $200 million in investments from leading Silicon Valley venture capitalists like Formation 8, Goodwater Capital, Pear VC, and Y Combinator, driving its stable growth. With operations in Korea, the U.S., China, and Taiwan, Memebox has a diverse revenue structure that helps it weather global market fluctuations.

In 2023, Memebox achieved a 30% increase in sales compared to the previous year and reached its break-even point in the second half, setting the stage for the IPO. The company aims for another 30% growth in 2024, with first-quarter results already showing a 23% increase from the previous year. Additionally, in 2023, Memebox's 'I'm Multi Stick' became the top-selling product at Japan's Don Quijote stores, indicating continued growth. The company is also expanding its global reach through strategic partnerships, such as with SiliconTwo.

CEO Ha Hyung-seok stated, "With the successful listing in collaboration with Samsung Securities, we plan to reinvest profits earned overseas back into Korea to contribute to the advancement of the Korean cosmetics industry and position ourselves as a global comprehensive beauty company representing Korea."

Seoul Hosts Korea Beauty Festival, Welcoming Foreign Tourists

    The 'Korea Beauty Festival' will take place throughout June in Seoul, offering foreign tourists a chance to experience Korean beauty, makeup, hair, fashion, and wellness. Hosted by the Visit Korea Committee, Ministry of Culture, Sports and Tourism, and Korea Tourism Organization, the event will feature 330 participating domestic companies.

The festival kicks off with an opening ceremony at Gwanghwamun Square on June 1, featuring K-beauty demonstrations, wellness and traditional music fusion performances, and K-pop shows. The festival will be held at various locations across Seoul, including Hongdae (hair and makeup), Seongsu (fashion), Myeong-dong (reward events), and Gwanghwamun (medical and wellness).

In Hongdae, from June 1 to 9, visitors can enjoy hair styling and makeup touch-up experiences themed around K-beauty. In Seongsu, throughout June, the focus will be on K-fashion with fashion recipes and photo studio experiences. Myeong-dong will host a pop-up store from June 17 to 30, where foreign tourists presenting beauty product receipts of 50,000 KRW (~$40) or more will receive K-beauty souvenirs. Gwanghwamun will offer medical and wellness experience programs from May 31 to June 2.

The event includes various experiences such as K-fashion & K-idol makeup classes, Bukchon Sulwhasoo House docent tours, overseas trainee hair education seminars, and brand-specific makeup and skincare classes. Korean Air, Asiana Airlines, and other airlines, along with hotels like The Shilla Seoul and Mayfield Seoul, will offer special discounts for visiting foreigners.

The Visit Korea Committee aims to use this event to promote the 2024 Visit Korea Year campaign and spread Korean hospitality culture to international tourists.

Seoul's DDP Showroom Opens, New Hub for Fashion and Beauty Industries

    Seoul City and the Seoul Business Agency (SBA) have opened the 'DDP Showroom' at the Dongdaemun Design Plaza (DDP), operating until the end of June. The DDP Showroom aims to establish itself as a fashion landmark and revitalize the Dongdaemun commercial area.

The showroom, spanning approximately 4,000 square meters over two floors, features spaces for citizens and tourists to experience fashion and beauty brands, along with advanced tech services on the first floor. The second floor is dedicated to wholesale brand showrooms and business spaces for fashion entrepreneurs. A studio for fashion sellers and creators, along with free sample rental services, is also available.

The opening ceremony on May 27 saw the participation of Seoul Mayor Oh Se-hoon and 300 fashion creators, offering various experiential events and a special collaboration exhibition 'Dicey Shift' with four fashion brands. This exhibition aims to convey the values and paradigms of the participating brands to visitors.

Products from eight fashion and beauty brands will be displayed and sold in the first-floor multi-shop, while the Seoul City and SBA aim to showcase Seoul's unique fashion and beauty to a global audience, promoting its distinctive lifestyle.

Mayor Oh Se-hoon stated, "The DDP Showroom is an important space to showcase Seoul's fashion, beauty, and lifestyle to the world and will continue to contribute to the development of Seoul's fashion and beauty industries." The SBA has also appointed 300 fashion creators as official ambassadors to enhance viral marketing and social media promotion.