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Korea Now Claims to Top Global League for Male Cosmetics Sales

Changes in income levels and consumer preferences prove boost for cosmetic sales across country.

Photo: Gangnam styling: Korean male cosmetics from the country’s most famous rapper.
Gangnam styling: Korean male cosmetics from the country's most famous rapper.
Photo: Gangnam styling: Korean male cosmetics from the country’s most famous rapper.
Gangnam styling: Korean male cosmetics from the country's most famous rapper.

South Korea is now the world's largest market for male cosmetics, according to figures released by the Korean Statistics Office. The claim follows average increases in the total market value of the domestic cosmetics industry of more than 10% per annum for the last five years.

Since 2010, the Korean beauty and health-care industry has enjoyed constant growth in terms of both exports and imports. Inevitably, this has seen the total value of the market rise, while the variety of products and services on offer has also expanded considerably. Overall, skin care products are said to account for around 15% of the total cosmetics market, (around US$903 million). Of that total, some 50% of the market share is commanded by imported products.

This has seen Korean women now said to spend as much money per capita on cosmetics and skin care products as their French and Japanese counterparts. With a US$130 cosmetic outlay per person, Koreans now have one of the world's highest spending levels in this sector.

With increasing numbers of Korean women entering the workforce – and their level of disposable income inevitably growing as a consequence – they have become keen users of imported cosmetics, with US suppliers particularly benefitting.

As well as an overall increase in demand for cosmetic products, Korean consumers are particularly seeking out green, natural, organic and herbal treatments. At the same time, with many Korean women ever keen to appear younger and healthier, functional cosmetics (so-called 'cosmeceuticals') that promise anti-aging, whitening, and anti-ultraviolet care have also become very much in demand. These factors, combined with the growth in the male grooming sector, have all driven the country's cosmetics market to unprecedented heights.

This growth in demand, however, has highlighted a number of problems with Korea's regulatory regime. According to many overseas cosmetics companies, the country's importation process is unnecessarily complex, time-consuming and opaque. This has led the government to review the procedures, while also increasing staffing levels at the Korea Food and Drug Administration (KFDA), ensuring that testing and approval process can be completed in a more timely fashion.

As well as changes in purchasing patterns and higher levels of disposable income, the sector has also had to contend with a raft of new distribution and sales channels. As with many other retail sectors, the advent of online shopping, the emergence of home-shopping channels, the rise of specialists pharmacies/drug stores, as well as the wider use of catalogue ordering facilities have all proved a challenge to the established channels. This has seen direct sellers, multi-level marketers, "mom and pop" stores, specialty retail establishments, department stores and discount stores all having to rethink their strategies in light of the changed retail reality.

In terms of the local market, three major franchised drug stores currently dominate high street sales in the sector – Olive Young (by CJ), W-Store (by Kolon) and GS Watson's (by GS in partnership with Watson's). Typically, all of these outlets offer organic/natural cosmetic products, nutritional supplements, OTC drugs and general consumer goods.

Michelle Lee, Seoul Consultant

Content provided by Picture: HKTDC Research
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