The companies’ shared focus on courting younger generations through digital engagement and fast-paced innovation are among the main points driving their growth, particularly across Asia.
“Key pillars of their successful strategies include the fast fashion principle applied to new product development, price positioning on masstige platforms, distribution focus on standalone boutiques and strong digital engagement,” one of the firm’s senior research analyst, Ildiko Szalai, explains.
The research firm points out that despite a growing global reach, currently the bulk of the companies’ market share is still based in Asia: in 2015, only around 3% of AmorePacific’s market share came from outside the region.
Innovation is fast-paced among K-beauty brands, which, according to Euromonitor, allows them to follow a product development cycle which is more in keeping with fast-fashion than traditional beauty multinationals.
This allows the brands a greater level of relevance and interactivity for younger consumers, making them particularly attractive to the rising millennial consumer group.
“Key target consumer segments for Korean brands are millennials and Generation Z consumers. In many Asian markets, these generations are booming in terms of population, whilst their spending power is increasing,” the white paper explains.
Middle class ‘masstige’
Tied in with this, the brands are increasingly focusing their efforts on the masstige segment, rejecting luxury lines for product portfolios of a more affordable price tag; again, making themselves particularly appealing to younger consumers and also to the middle class.
“Korean mid-priced products, such as Laneige, allow marketers to tap into a wider consumer base, targeting the middle class,” confirms Szalai.
Marketing and distribution channels
Opting increasingly to retail through standalone boutiques rather than concessions within department stores or distribution through drugstores is also reportedly helping K-beauty leaders dominate.
It lends the brands a strong brand identity and presence, and allows them to use the retail space to experiment with digital retail experiences in-store, including digital displays and brand story exhibits.
Online retail for K-beauty is also a dominant channel within Asia, and Euromonitor suggests that to expand their reach more globally, Korean brands must now focus on developing worldwide internet engagement.