The figures were published in a 2018 Global Cosmetic Industry White Paper by the Korea Trade-Investment Promotion Agency (KOTRA), which explores the various global cosmetic markets and the development of the domestic cosmetics industry.
Additionally, the report provides insight into beauty trends and discusses the strategies for entering new markets, which is essential for the industry, said KOTRA.
“K-beauty is evolving into a K-lifestyle, and it is time to increase brand value for sustainable growth and to focus on developing new markets.”
Global industry leader
Cosmetic exports grew 31.4% year-on-year while exports to Greater China, which encompasses Hong Kong and Taiwan in addition to mainland China, increased 12.5% to $3.26bn, making it the largest export market for K-beauty.
KOTRA’s report notes that export regions have diversified in recent year as well, with some experiencing high double-digit growth.
Shipments to South East Asia increased 29% to $53m, while exports to North America rose nearly 30% to $47m. The European market grew immensely as well, with exports increasing 51.3% to $16m.
“Our companies have secured competitiveness by developing innovative hit products that lead the global cosmetics industry,” said KOTRA.
“We are strengthening the global orientation of all stages of business including planning, R&D, launch, marketing, and are leading global trends in terms of innovation components, functionality, and packaging.”
While the report on the local cosmetics industry is largely positive, KOTRA added that the industry does face a few challenges in the coming years.
With the popularity of e-commerce and emergence of multi-brand stores, sales in brand shops and department stores are decreasing.
Additionally, KOTRA observed that it is becoming harder to meet consumer demands, as consumers are looking beyond aesthetics and into health, functionally and green formulations.
Number of local companies growing
The popularity of K-beauty products have caused the number of cosmetic companies, both manufacturing and sales, to increase from 2,458 in 2012 to 11,834 in 2017 – nearly 80% in five years.
KOTRA pointed out that the country is home to the world’s top original design manufacturers and original equipment manufacturers, which has built an industrial ecosystem with excellent development capability.
The organisation added that the strength of the industry would lead to more job creations as local companies continue to expand overseas.
“The cosmetics industry has a lot of manpower needed for the production of a small quantity of various items, and it is expected that the creation of jobs will be more active with the activation of overseas advancement.”
Kim Jong-chun, Head of KOTRA’s Economic and Trade Cooperation Department said that the local cosmetics industry has provided vitality to the country’s exports, and KOTRA will continue to offer support for the industry.
“KOTRA will support our cosmetics companies in establishing strategies for overseas market entry and marketing, so that we can contribute to the entrepreneurship and job creation of our economy right now through growth.”