Massive Counterfeit Cosmetics Network Busted—Fake Products Found to Contain No Active Ingredients
A large-scale counterfeit cosmetics distribution ring in South Korea has been exposed by the country’s Special Judicial Police for Trademark Crimes. On June 19, authorities revealed that a wholesaler, Mr. A (age 42), along with three accomplices, was referred to the prosecution for violating trademark laws. The group had been importing low-cost cosmetics from overseas and rebranding them as luxury products, selling them at discounted prices under the guise of parallel imports.What made these counterfeit goods particularly dangerous was their external appearance—they were crafted so precisely that even professional distributors had difficulty distinguishing them from authentic products. The packaging, labeling, and containers closely mimicked genuine items, leading to widespread deception among consumers, home shopping networks, and distribution partners.
Investigations uncovered that these products did not match the ingredients or quantity of the originals. For example, the fake SK-II essence contained none of the essential whitening ingredient, niacinamide. Some units also fell below the standard volume, classifying them as so-called “water-only” cosmetics with no real efficacy.
Authorities seized over 40,000 items stored in warehouses in Gyeonggi Province, intended for home shopping sales, with an estimated market value of 1.4 billion KRW (approx. $1.01 million USD). It was revealed that the suspects had distributed around 87,000 counterfeit items between April 2023 and March 2024, with a total market value reaching 7.9 billion KRW (approx. $5.7 million USD).
The initial tip-off came in March when a distributor, preparing to export these products abroad under the belief they were genuine, noticed inconsistencies and reported them. Investigators swiftly seized 6,000 units worth 560 million KRW ($405,000 USD), launching a full-scale investigation. Through digital forensic analysis, police obtained transaction records confirming over 41,000 products had been sold, generating more than 2.1 billion KRW ($1.52 million USD) in illegal profit.
Each suspect had a defined role in the operation: Mr. A oversaw overseas purchasing, Mr. B handled import documentation, while Mr. C and Mr. D managed domestic distribution. This systematic division of labor underscored the organized nature of the crime.
Despite no toxic substances being detected, the Korean Intellectual Property Office emphasized the health risks, noting that such counterfeit cosmetics bypass all safety and quality inspections during production and distribution. Shin Sang-gon, Director of the Office for Industrial Property Protection, stated, “Although harmful substances were not found, products like counterfeit SK-II lacked any functional ingredients or efficacy, being sold at one-third the market price.” He further added that the agency would intensify its investigative efforts to root out counterfeit products that pose serious risks to public health and consumer safety.
KFDA Moves to Strengthen Oversight on Directly Purchased Overseas Cosmetics
The Ministry of Food and Drug Safety (MFDS, also known as KFDA) in South Korea has announced plans to tighten regulations on cosmetics purchased directly by individuals from foreign online retailers. On June 19, the agency revealed that it has proposed amendments to the Enforcement Decree and Enforcement Rules of the Cosmetics Act, following a recent revision of the main law to include provisions for investigating and inspecting such “direct-purchase overseas cosmetics.” The public can submit opinions on the draft rules until June 30.Direct-purchase overseas cosmetics refer to products that individuals order from international e-commerce platforms for personal use, without going through domestic distributors. These purchases have largely operated in a regulatory grey area, raising concerns about product safety and quality.
To address this, the KFDA has specified in the Enforcement Decree the types of data that central government agencies can request for the purpose of investigating these products. This includes demographic data of purchasers (such as gender and age), purchase frequency, motivations behind purchases, usage patterns (e.g., quantity used, usage frequency and duration), and details on consumer complaints or harm experienced.
The Enforcement Rules also outline the methods by which such investigations can be conducted, including statistical analysis, literature review, and consumer surveys. These systematic investigations aim to provide a comprehensive understanding of how directly imported cosmetics are used and what potential risks they pose.
Additionally, the KFDA now has the authority to verify product labels, compare them with information posted on e-commerce platforms, and conduct physical, chemical, or microbiological tests on the products themselves. If a product is deemed harmful, the KFDA may publish the following information on its website: product name, country of manufacture, manufacturing company, product images, ingredients or chemical components.
As part of the amendment package, the KFDA has also formalized the designation of September 7 as “Cosmetics Day.” Details of official events marking this occasion are included in the proposed Enforcement Decree. The agency stated that this commemoration is intended to promote public awareness of the cosmetics industry and its importance, while also enhancing safety for consumers purchasing through less-regulated channels.
A KFDA official commented, “Through Cosmetics Day, we aim to foster a greater sense of pride within the industry and improve consumer awareness. At the same time, our strengthened oversight on direct overseas purchases will help prevent harm and ensure safe cosmetic use.”
According to Kolmar B&H, Yoon Dong-han submitted the claim to the Seoul Central District Court on May 30. The conflict traces back to April 25, when Yoon Sang-hyun attempted to nominate himself and Lee Seung-hwa, a former executive at CJ CheilJedang, as internal directors on the board of Kolmar B&H. This move directly challenged a previous management pact established within the family.
That pact, signed in September 2018, divided the Kolmar empire: Kolmar Holdings and Korea Kolmar (cosmetics and pharmaceuticals) were assigned to the son, while Kolmar B&H (health supplements) went to the daughter, Yoon Yeo-won. Based on this agreement, Yoon Sang-hyun was conditionally gifted 31.75% of Kolmar Holdings shares and became its largest shareholder. Meanwhile, Yoon Dong-han retains just 5.59% of Kolmar Holdings after later gifting additional shares to his daughter.
The feud came to a head when Yoon Yeo-won rejected her brother’s board entry request, prompting Yoon Sang-hyun to file a petition on May 2 for an extraordinary shareholders' meeting at Daejeon District Court. Citing the company’s poor performance and stock price decline as justifications, he argued for a revamp in corporate leadership.
From his perspective, shareholder value must take precedence over family ties. Indeed, Kolmar B&H’s operating profit plummeted from 109.2 billion KRW ($79 million USD) in 2020 to just 24.6 billion KRW ($18 million USD) last year. The stock price also tumbled from a peak of 72,900 KRW in 2020 to as low as 11,470 KRW earlier this year. As Kolmar Holdings owns a 44.63% stake in Kolmar B&H, its financial struggles have had a direct impact on the holding company.
However, Yoon Dong-han strongly opposed his son’s interference. In his remarks during Kolmar Group’s 35th anniversary ceremony on May 15, he reaffirmed that “the original family succession structure remains unchanged and was based on extensive consultation and mutual agreement.” Despite these efforts at mediation, his son remained resolute, leaving Yoon Dong-han no choice but to pursue legal action.
Yoon Yeo-won also responded by filing an injunction on June 10 at Daejeon District Court, claiming the proposed shareholders’ meeting violated the prior succession agreement and jeopardized corporate governance.
A Kolmar B&H representative stated, “This is not merely a family dispute. It is a necessary step to defend the independent governance of our subsidiary and ensure the sound operation of the business. The founder’s decision reflects his commitment to preserving the legacy and integrity of the company he built over 35 years.”
According to data released by the Korea International Trade Association on June 20, South Korea’s total cosmetics exports between January and May 2025 reached $3.814 billion (approx. 5 trillion KRW), marking a 12.1% increase compared to the same period last year. Notably, exports to Europe and the Middle East surged by approximately 42% and 62%, respectively, outpacing even the 12% growth seen in the U.S. market.
This growth is attributed to structural changes in the market and strategic targeting by Korean brands. In contrast to previous years, where local regulatory hurdles limited expansion, Korean firms have successfully navigated the European and Middle Eastern markets by emphasizing clean formulations, compliance with ingredient safety standards, and streamlined supply chains. Platforms like SiliconTwo have played a pivotal role by aggregating and distributing K-beauty products tailored to local preferences.
The rise of K-beauty in these markets is not just a short-term trend but is now viewed as entering a phase of structural growth. European consumers, long accustomed to domestic legacy brands, are showing increasing interest in K-beauty’s blend of functionality, affordability, and innovation. Meanwhile, the Middle East is emerging as a new growth frontier with expanding consumer demand for skincare products that align with cultural and climatic needs.
South Korea’s export performance suggests that K-beauty is evolving from a regional sensation into a mainstream global category. Its strength lies in combining effective ingredients with attractive packaging and a customer-centric approach—factors that resonate deeply with modern global consumers.
Kolmar Group Founder Files Lawsuit Against Son Over Returned Shares—Succession Conflict Escalates
Yoon Dong-han, the founder of Kolmar Group, has filed a lawsuit against his eldest son, Yoon Sang-hyun, the current Vice Chairman and CEO of Kolmar Holdings, demanding the return of 4.6 million shares. These shares—originally 2.3 million, now doubled via a stock split—were conditionally gifted in 2019 as part of a family succession agreement. The lawsuit marks a dramatic escalation in what started as a sibling rivalry and has now intensified into a full-blown legal feud between father and son.According to Kolmar B&H, Yoon Dong-han submitted the claim to the Seoul Central District Court on May 30. The conflict traces back to April 25, when Yoon Sang-hyun attempted to nominate himself and Lee Seung-hwa, a former executive at CJ CheilJedang, as internal directors on the board of Kolmar B&H. This move directly challenged a previous management pact established within the family.
That pact, signed in September 2018, divided the Kolmar empire: Kolmar Holdings and Korea Kolmar (cosmetics and pharmaceuticals) were assigned to the son, while Kolmar B&H (health supplements) went to the daughter, Yoon Yeo-won. Based on this agreement, Yoon Sang-hyun was conditionally gifted 31.75% of Kolmar Holdings shares and became its largest shareholder. Meanwhile, Yoon Dong-han retains just 5.59% of Kolmar Holdings after later gifting additional shares to his daughter.
The feud came to a head when Yoon Yeo-won rejected her brother’s board entry request, prompting Yoon Sang-hyun to file a petition on May 2 for an extraordinary shareholders' meeting at Daejeon District Court. Citing the company’s poor performance and stock price decline as justifications, he argued for a revamp in corporate leadership.
From his perspective, shareholder value must take precedence over family ties. Indeed, Kolmar B&H’s operating profit plummeted from 109.2 billion KRW ($79 million USD) in 2020 to just 24.6 billion KRW ($18 million USD) last year. The stock price also tumbled from a peak of 72,900 KRW in 2020 to as low as 11,470 KRW earlier this year. As Kolmar Holdings owns a 44.63% stake in Kolmar B&H, its financial struggles have had a direct impact on the holding company.
However, Yoon Dong-han strongly opposed his son’s interference. In his remarks during Kolmar Group’s 35th anniversary ceremony on May 15, he reaffirmed that “the original family succession structure remains unchanged and was based on extensive consultation and mutual agreement.” Despite these efforts at mediation, his son remained resolute, leaving Yoon Dong-han no choice but to pursue legal action.
Yoon Yeo-won also responded by filing an injunction on June 10 at Daejeon District Court, claiming the proposed shareholders’ meeting violated the prior succession agreement and jeopardized corporate governance.
A Kolmar B&H representative stated, “This is not merely a family dispute. It is a necessary step to defend the independent governance of our subsidiary and ensure the sound operation of the business. The founder’s decision reflects his commitment to preserving the legacy and integrity of the company he built over 35 years.”
K-Beauty Gains Ground in Europe and the Middle East Amid Surging Exports
K-Beauty has extended its influence beyond the United States, making significant inroads into Europe—long considered the “birthplace of cosmetics”—and the Middle East. These regions, previously challenging due to stringent ingredient regulations and high entry barriers, are now showing rapid growth thanks to the efforts of specialized cosmetic distribution platforms such as SiliconTwo.According to data released by the Korea International Trade Association on June 20, South Korea’s total cosmetics exports between January and May 2025 reached $3.814 billion (approx. 5 trillion KRW), marking a 12.1% increase compared to the same period last year. Notably, exports to Europe and the Middle East surged by approximately 42% and 62%, respectively, outpacing even the 12% growth seen in the U.S. market.
This growth is attributed to structural changes in the market and strategic targeting by Korean brands. In contrast to previous years, where local regulatory hurdles limited expansion, Korean firms have successfully navigated the European and Middle Eastern markets by emphasizing clean formulations, compliance with ingredient safety standards, and streamlined supply chains. Platforms like SiliconTwo have played a pivotal role by aggregating and distributing K-beauty products tailored to local preferences.
The rise of K-beauty in these markets is not just a short-term trend but is now viewed as entering a phase of structural growth. European consumers, long accustomed to domestic legacy brands, are showing increasing interest in K-beauty’s blend of functionality, affordability, and innovation. Meanwhile, the Middle East is emerging as a new growth frontier with expanding consumer demand for skincare products that align with cultural and climatic needs.
South Korea’s export performance suggests that K-beauty is evolving from a regional sensation into a mainstream global category. Its strength lies in combining effective ingredients with attractive packaging and a customer-centric approach—factors that resonate deeply with modern global consumers.
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