The Olive Young Mutual Growth Fund would allow eligible companies to benefit from a reduced interest rate of 2.39%.
The South Korean beauty retailer said the aim was to help alleviate the financial burdens of its local SMEs by facilitating more flexible access to funds and giving them reduced interest rates.
“This significantly lowers the interest to half the standard rate. If a company borrows the maximum of KRW1bn (USD742,531), it could save up to KRW24m (USD17,818) in annual interest,” said the firm in a statement.
According to the firm, 50 companies have already applied for funding and it has plans to expand the programme to 100 companies this year.
This underscores the company’s ongoing commitment to support the growth of K-beauty SMEs internationally.
“As these start-ups progress through different growth stages, Olive Young aims to support the growth of small and medium-sized beauty enterprises by investing in research and development costs, providing support for participation in international beauty conventions, and operating an export concierge service.”
The goal is to create a sustainable and healthy environment for the K-beauty industry to flourish, the company said.
“With 25 years of expertise in managing a distribution platform exclusively dedicated to small cosmetics brands, we aspire to serve as a bridge in crafting multiple success stories for small enterprises on the global stage.”
Additionally, Olive Young’s plans to invest KRW50bn (USD37.2m) in Korea’s beauty industry over the next three years.
“The plan involves actively discovering and nurturing new brands and products to continually enter the beauty market. Furthermore, meticulous support will be provided throughout the entire process, including planning, research and development sales, and marketing, to facilitate growth and eventual expansion into international markets.”
As reported by the firm, the export value of Korean cosmetics, was KRW2tn to KRW3tn win the early to mid-2010s. Since then, it has experienced a significant surge, reaching around KRW11tn (USD8.2bn) last year.
With its strong domestic and international platform, Olive Young has been key to the international success of a number of K-beauty brands including Rom&nd, Manyo Factory, Clio, and VT Cosmetics
"As a domestic beauty platform, Olive Young aims to play a pivotal role in leading the global prosperity of the K-beauty industry by spreading successful models that thrive in overseas markets, supporting the establishment of cosmetics as a representative export item for South Korea,” said Lee Sun-jung, CEO of CJ Olive Young.
"From discovering and nurturing new brands to supporting their growth and international expansion, we will take on the role of a catalyst for the global heyday of the K-beauty industry."