K-beauty vs eco: Cosmetics industry most significantly impacted sector by post-pandemic demand for greener products
A total of 409 consumer goods companies were surveyed, of which 19% were cosmetic companies.
More than half (51.3%) of these companies reported that the increasing consumer demand for eco-friendly products has had a large impact on their exports and sales.
In particular, 62.8% of the cosmetics companies surveyed reported that it had significantly influenced their exports and sales. This was just behind fashion (68.4%) and ahead of industries including household goods (53.7%) and food and beverages (53.3%).
More than half (52.1%) of the companies said the changes in demand for eco-friendly products increased after the COVID-19 pandemic broke out.
A majority of cosmetic companies (70.5%) felt that this post-pandemic trend had a significant impact on business, making it the most affected by the post-COVID eco-friendly product surge compared to fashion (57.9%), household goods (51.9%) and food (50%).
The survey revealed that 72% of companies observed that the export performance of eco-friendly products increased by 5% or more after the pandemic.
Responding to the green wave
According to the report, one in three companies had received enquiries about eco-friendly products or requests for greener alternatives from consumers.
Only 26.2% of respondents said they were exporting eco-friendly products. By industry, cosmetics (33.3%) had the highest percentage compared to household goods (31.5%) and fashion (29%).
It said 65.4% of cosmetics companies were responding to the demand for eco-friendly products and that they were doing so by improving on packaging (37.9%), raw materials (24.8%) and production processes (11.8%).
However, 78.4% reported that they were not responding well enough to the eco demands. This appeared to be the case for other industries including fashion (81.6%), household goods (82.4%) and food (80%).
The biggest hurdles facing companies in terms of eco-conscious product development were the high prices associated with increased costs in areas such as research and development (31.2%).
Companies also cited financial support (25.7%) as well as difficulties in obtaining relevant certifications (19.3%) as some of the difficulties.
In light of this, companies requested support from the authorities in the form of financial support (25.7%), support for acquiring eco-friendly certifications (25.2%), marketing support (22.9%), as well as R&D support (15.9%).