Korean Cosmetics Market - Crisis and Changes Accompanied by the Pandemic
The global pandemic has unleashed unprecedented challenges on industries worldwide, and the cosmetics sector is no exception. However, amidst the chaos, the Korean cosmetics market has proven its resilience and adaptability, emerging as a shining example of recovery and innovation. As we delve into the fascinating realm of Korean beauty, we uncover a remarkable journey of transformation that has captivated consumers and redefined the industry.
When mask-wearing became the norm for virus prevention, the demand for cosmetics plummeted, intensifying the impact of remote work and social distancing measures. In 2020, the global cosmetics market experienced a 4% decline compared to the pre-pandemic year of 2019. Among the hardest-hit segments was color cosmetics, with the Korean market witnessing a staggering 22% drop.
However, as the world transitions into an endemic phase, the Korean cosmetics market has experienced a remarkable resurgence. The lifting of mask mandates and the return of outdoor activities have breathed new life into the industry. Notably, products related to lip care, which took a backseat during the mask-wearing era, have witnessed an astonishing 71.1% surge in sales. In 2021, the cosmetics sales revenue reached a staggering 31 trillion won, marking an impressive 8% increase compared to the previous year.
Traditionally, offline sales dominated the cosmetics landscape due to the importance of experiential product usage. However, the pandemic forced a paradigm shift, with online channels witnessing a meteoric rise in purchasing activities. This trend has persisted even as the endemic phase sets in, prompting cosmetics companies to expand their online presence. Moreover, vertical e-commerce platforms specializing in food and fashion have ventured into the beauty realm, achieving remarkable sales growth.
Today's consumers rely heavily on social media channels for product information. Platforms like YouTube, Naver, Instagram, Naver Blog, and Naver Shopping have become hubs for gathering insights on lip and eye products. Sun care, cushion, and foundation products have seen a surge in purchases made through Naver Shopping and Olive Young's online mall. While Naver search and blogs are viewed as advertising and promotional tools, consumers trust real purchase reviews shared on social media and shopping platforms.
In the Korean cosmetics industry, two giants, LG Household & Health Care and AMOREPACIFIC, stand at the forefront. LG Household & Health Care, established as a spin-off from LG Chemical in 2001, is a powerhouse in cosmetics, household products, beverages, and other major sectors. The brand's iconic lines, such as "The history of whoo (whoo)," "su:m," and "ELASTINE," have become synonymous with quality and luxury. Notably, "whoo" surpassed 2 trillion won in global sales in 2018, captivating consumers with its opulent brand image. Recently, the launch of "Royal Regina," a three-step energetic anti-aging line, has taken the market by storm. This dual-functional cosmetic not only improves wrinkles but also brightens the skin, providing a complete rejuvenation experience.
Another formidable player in the Korean cosmetics industry is AMOREPACIFIC, a company operating in cosmetics, household products, and food. With local subsidiaries in China, Singapore, Japan, France, Thailand, Indonesia, and other countries, AMOREPACIFIC has expanded its global reach. The brand's flagship products, including "Sulwhasoo," "HERA," and "IOPE," have captivated consumers worldwide. Recently, AMOREPACIFIC underwent a comprehensive rebranding strategy to target younger audiences. By revamping the brand logos, packaging, and designs of lines such as "Sulwhasoo" and "innisfree," the company has struck a chord with the new generation of beauty enthusiasts. Additionally, the appointment of Blackpink's Rosé as the ambassador for "Sulwhasoo" has propelled its global sales strategy to new heights.
Beyond these industry giants, a myriad of cosmetics manufacturing companies, including AEKYUNG, Coréana, and carverkorea, add to the vibrant landscape. The rise of small-scale beauty brands, supported by ODM specialized companies like Korea Kolmar and Cosmax, has been particularly remarkable. Indie brands like rom&nd, Abib, and ma:nyo have captured the imagination of Millennials and Gen-Z, enchanting them with unique personality and concepts that challenge the status quo.
As we navigate the ever-evolving world of Korean cosmetics, one thing is clear: this industry is a testament to the power of resilience and adaptation. Against all odds, it has emerged stronger, fueling a wave of changes that continue to captivate consumers. In a world where beauty knows no bounds, the Korean cosmetics market stands tall, embracing the future with unwavering confidence and an unwavering commitment to innovation.
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