In light of the Korean government’s stance on establishing an anti-missile system from the US, the nation’s brands are looking at the Middle East as their next key growth area.
LG Household & Health Care is one such brand, announcing that its cosmetics name The Face Shop, plans to move into Qatar and Kuwait this year.
The decision is an extension of its existing presence in the Middle East, with the cosmetics manufacturer and retailer currently operating 64 stores across six countries including Saudi Arabia and the United Arab Emirates (UAE).
Additionally, in December 2016, AmorePacific, revealed it had signed an agreement with Kuwait retailer Alshaya Group to team up and open its colour cosmetics label Etude House.
With the brand targeting its make up products and tools to the younger demographic, it plans to launch its first outlet in Dubai later this year.
Budget beauty brands benefit
It is not only leading multinational Korean brands that are entering into the Middle Eastern marketplace, as low-cost burgeoning beauty retailers are also preparing to move to the recently-championed region.
Tonymoly, which translates as ‘putting style into packaging’ has opened five shops in Saudi Arabia and the UAE, with two further outlets planned in the region this year.
As online distribution channels become a popular choice for low-cost retailers, the brand has also teamed up with beauty retailer Sephora to promote and sell its products through its Middle Eastern shops.
Dr. Jart, a low-priced skin care company also moved into the Middle Eastern market last year and has collaborated with Sephora to sell its products throughout countries including Saudi Arabia and Oman.
High growth potential
Forecasts for the region are extremely positive with the Middle Eastern beauty and personal care market expected to grow considerably over the next three years.
Euromonitor International anticipates that the Eastern cosmetics market will double to reach $36 mn (€34.3 mn) in 2020 from the industry’s $18 mn (€17.1 mn) figure in 2015.
While the cosmetics segments in Asia anticipate growth of 14%, the Middle Eastern industry is expected to increase by 15% every year until 2020.
As consumers from outside Korea become more interested in Korean TV programmes, celebrities and music, the K beauty and K pop trends have also gained new advocates.
This popularity also comes at a time when Korea’s decision to introduce an anti-missile system has furthered tensions between Korea and China, having a detrimental impact on trade.