Panic Buying of Korean Cosmetics in the U.S.
A “panic buying” trend for Korean beauty products has erupted among U.S. beauty consumers and influencers after former U.S. President Donald Trump announced on August 1 that a 25% retaliatory tariff would be imposed on South Korean goods.According to CBS and The New York Times (NYT), following the announcement of maintaining tariff pressure, American consumers have been purchasing large quantities of Korean cosmetics to stock up in advance. On platforms like TikTok, products such as Korean sunscreens, eyeliners, and serums are being identified as essential items, with some individuals reportedly buying enough to last over a year.
Esther Lee, the head of a marketing agency based in Los Angeles, is a prime example of this trend. Immediately after the tariff announcement, she made large online orders of summer essentials and stated that approximately 80% of the products she uses are Korean-made. She added that if prices go up, she plans to bulk-purchase cosmetics during her visits to South Korea.
Taylor Bosman Teague, a beauty influencer with over 500,000 TikTok followers, also participated in the K-beauty panic buying via summer-themed content. She emphasized, “The future may be uncertain, but one thing is clear: I can never give up my essential Korean skincare.”
According to the Korea Food and Drug Safety Ministry, South Korea’s cosmetic exports reached $5.5 billion in the first half of this year, a 14.8% increase compared to the same period last year. The U.S. ranks as the second-largest export destination, following China.
The NYT noted that the popularity of K-beauty stems from its cost-effectiveness and gentle formulations, adding that potential price increases due to tariffs could significantly impact consumer demand. Korean cosmetics have enjoyed strong competitiveness under the Korea-U.S. Free Trade Agreement (FTA), but with that advantage under threat, the market outlook is becoming increasingly uncertain.
Rob Handfield, a professor at North Carolina State University, stated, “Some U.S. consumers are rushing to buy imported goods before the tariffs hit,” and added, “For South Korea and Japan, a last-minute tariff reduction agreement by August 1 seems unlikely.”
Kolmar Korea Completes Its Second U.S. Factory: A Strategic “Tariff-Safe Zone”
Kolmar Korea has reached a new milestone in its global expansion strategy by completing its second U.S. manufacturing facility in Scott Township, Pennsylvania. On July 16 (local time), Kolmar held a groundbreaking ceremony at the site with over 100 attendees, including Kolmar Group Vice Chairman Yoon Sang-hyun and Pennsylvania State Representative Bridget Kosierowski, along with key officials and client representatives.Vice Chairman Yoon stated, “It was in the United States, 100 years ago, where Kolmar first began. This second plant is more than just a factory—it is the starting point of a new vision and strategic collaboration.” He emphasized that Kolmar aims to build an innovation ecosystem with various value chain partners and grow into North America’s largest cosmetic manufacturing hub.
With the new factory now operational, Kolmar USA has secured the capacity to produce up to 300 million units annually in the U.S. alone. The second factory itself spans 17,805 square meters and can manufacture approximately 120 million products per year. Including its Canadian subsidiary, Kolmar’s annual production capacity across North America now totals around 470 million units—making it the largest ODM (Original Development Manufacturing) scale in the region.
This new facility will focus primarily on skincare and sun care products, which are currently enjoying strong popularity in the U.S. market. Combined with the first factory’s specialization in color cosmetics, Kolmar can now produce a full range of cosmetic items within the U.S.
Kolmar Korea has also obtained FDA’s OTC (Over-the-Counter) certification for sunscreen production at the second plant, enabling swift and efficient responses to the surging demand for Korean sun creams.
The factory’s design draws heavily on operational expertise from Kolmar’s Sejong facility in South Korea. Key production areas such as manufacturing, filling, and packaging have been optimized with advanced infrastructure. Notably, the new site incorporates AI-based quality monitoring and production optimization technologies to minimize defects and has automated over 80% of its processes. Workflow and logistics systems have been modeled after the Sejong factory to maximize efficiency and safety.
Industry observers anticipate that the new facility will function as a “tariff-safe zone” for Korean and global beauty clients facing export duties in the U.S. In addition, the plant’s "Made in USA" designation is expected to attract U.S.-based and global brands seeking local production partners.
A Kolmar Korea representative commented, “This is the first time a Korean cosmetic company has built a manufacturing facility from the ground up in the U.S., rather than acquiring an existing plant. This gives it significant strategic value.” He added, “We’ll continue to build agile partnerships to serve the needs of K-beauty clients looking to expand not just in the U.S., but also across North America, Europe, and Latin America.”
M&A Heats Up in K-Beauty: Skyrocketing Valuations and Preemptive Bidding
As the global popularity of K-beauty continues, the valuation of Korean beauty companies in the M&A market is also soaring. With strategic buyers and financial investors fiercely competing to acquire high-performing beauty brands, some firms are receiving acquisition inquiries even before publicly expressing any intention to sell.According to industry sources, firms like Aekyung Industrial and Serin Company are currently in the process of being sold at high valuations, which in turn has intensified competition among investment banks (IBs) to secure roles as deal advisors. In some cases, IBs and investors are proactively reaching out to companies with no stated intention to sell, asking, “Are you open to a deal?”
One example is The Skin Factory, owned by VIG Partners. Although VIG has made no official announcement regarding a sale, several advisory firms have unofficially approached them with proposals. These advisors are reportedly saying, “Let us sell it for you.” VIG acquired The Skin Factory, known for the popular shampoo brand ‘Kundal,’ in 2020 for approximately ₩170 billion and has since focused on expanding its scale.
The same dynamic applies to the aesthetic medical device sector. Vaim, a company specializing in dermal fillers and owned by Premier Partners, has already been approached by several potential acquirers. Premier had acquired around 76% of the company for ₩70 billion in 2021. Although the firm is not currently considering a sale and is instead focused on improving its financials, investor interest remains strong. The recent stock surge of peers such as APR, Classys, and Viol has heightened market expectations for similar deals.
Meanwhile, Ferenbell, owned by JKL Partners, has formally entered the sales process and is garnering considerable attention. Advisors are actively pitching creative deal strategies in hopes of winning the mandate. JKL acquired Ferenbell in December 2021 for ₩260 billion. Known for the natural beauty brand ‘Some By Mi,’ Ferenbell derives most of its revenue from Southeast Asian markets rather than Korea. Industry insiders estimate that its valuation could reach around ₩600 billion, on par with recent K-beauty transactions.
Recent blockbuster deals have fueled further excitement. The sale of Aekyung Industrial has drawn interest from four shortlisted firms—T2 PE, Anchor PE, Paul Capital, and Lion Corporation—despite a steep asking price of over ₩600 billion for a 64% stake. This includes a control premium of more than 40%. Another hot deal is Serin Company, which was acquired by Calypse Capital in 2023 for ₩235 billion and is now being sold to Goodai Global and Company K for over ₩600 billion—nearly triple its valuation in just three years.
These dynamics are leading some private equity players to reconsider their exit timing, given the current high demand for beauty assets. A source from the IB industry commented, “The larger the deal, the higher the advisory fees, so investment banks are competing intensely to close high-profile beauty transactions.” They added, “Even companies not officially on the market are receiving proactive pitches from advisors and buyers, essentially being scouted in advance.”
K-Beauty Expands European Footprint Through Offline Store Strategy
Following its success in the U.S., K-beauty is now gaining strong traction in Europe—the historical home of global cosmetics. As Korean brands gain recognition for their value-for-money and high-performance formulations, many are accelerating efforts to enter offline retail channels. This “two-track” strategy—balancing online and offline approaches—is designed to align with European consumer behavior, which heavily favors in-store purchases.According to The Founders, the K-beauty brand Anua has expanded its presence to over 650 Boots stores across the U.K. This is a significant jump from October last year, when the brand began with just 120 locations. By March, the number of stores had grown to 470, and now, just nine months after its initial launch, the footprint has more than quintupled.
The product lineup has also expanded dramatically. Anua initially offered seven SKUs, but now some stores carry as many as 15 items. Its popular Rice Toner, which helped the brand gain global traction, is now featured prominently on shelves. In addition, Azelaic Serum and PDRN Serum, both of which became bestsellers in the U.S. within six months of release, have been introduced to U.K. stores to increase product diversity.
This aggressive expansion has already translated into meaningful sales. During a marketing campaign run in May and June across the U.K., weekly sales of PDRN Serum jumped by 90%. Anua’s retail revenue at Boots also rose by 26% quarter-over-quarter in Q2 of this year, further confirming robust local demand for K-beauty.
An Anua spokesperson stated, “Through this expanded retail presence, we’ve secured meaningful offline market share in Europe. We plan to strengthen our position as a leading skincare brand in the U.K. by diversifying our product portfolio and distribution strategies.”
Another strong performer is Skin1004, operated by Craver Corporation. The brand reported ₩14.6 billion in sales in Western Europe for the first half of this year—a 500% increase compared to the same period last year. In France, Italy, and Spain, sales as of June were up 950% year-over-year. This surge is attributed to rapid retail expansion into drugstores and beauty chains in each country.
Skin1004 recently entered 780 branches of Rossmann, a major drugstore chain in Germany with more than 4,000 outlets across Europe. In the U.K., it has been placed in Sephora and Superdrug, totaling around 40 locations. In Italy, Skin1004 is available at the beauty retailer Douglas, while in Spain, it’s stocked at drugstore chain Druni.
Meanwhile, K-beauty distribution platform SILICON2 opened a new retail store named MOIDA in Paris last month. MOIDA is a curated K-beauty concept store operated directly by SILICON2 and serves as a strategic hub for engaging French consumers. It is the company’s first flagship store in France, following its launch in London.
The store features 13 representative Korean beauty brands including Dr. Althea, Anua, Beauty of Joseon, COSRX, Mediheal, Axis-Y, Mixsoon, Purito Seoul, Round Lab, Biodance, Skin1004, and VT Cosmetics. SILICON2 plans to continue onboarding additional brands looking to enter the French and broader European markets.
The company also announced plans to open its first Italian flagship in Milan later this year, followed by stores in Florence, Rome, and select cities in Spain. Through this expansion, SILICON2 aims to build a robust offline retail network across Europe to help K-beauty brands reach a broader audience.
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