Cossma1611_GB

Koreans spend almost 7% of their income on cosmetics : photos: Renzo.luo (flag), Takayuki, Vepar5 (hand), Shutterstock.com • The biggest cosmetic producers in Korea are Amore Pacific and LG Household & Health Care. These two companies produce and sell the most popular brands of Korean cos- metics, for example Laneige, Innis- free, Mamonde, The Face Shop, etc. Korean cosmetics with top exports Due to all these features, Korean cosmetic products are gaining more and more popularity, originally in the neighbouring Asian countries but recently also in the US and Eu- rope. According to Korea’s Interna- tional Trade Association, the total ex- port of Korean cosmetics has seen double-digit growth rates since 2010. The total export of cosmetics from Korea amounted to USD 2.75 billion in 2015, thus constituting a year-on-year increase of 53.6%. The export of Korean cosmetics to China represented USD 1.08 billion in 2015. This means almost 40% of the total export went to China. There- fore, China can be classified as the most important market for cosmet- ics made in Korea. The main target group for Korean cosmetics in China are young con- sumers. They are the ones who en- joy the trendy and innovative prod- uct concepts and the good value for money of most Korean brands. Due to this situation, Chinese com- panies work with cosmetic develop- ment institutions or give OEM (origi- nal equipment manufacturer) orders to Korean cosmetic producers. It is not only Korean cosmetics that have gained in popularity in China, but also fashion and other lifestyle products from Korea. For example, in many Chinese cities, there are new drugstores with products developed in Korea and produced in China. Peo- ple can buy cosmetics, cosmetic ac- cessories and other lifestyle products with the typical simple and cute optic of Korean style in these drugstores. Another way of following the Korean lifestyle is to watch Korean TV series, which are very popular in China and other Asian countries. These TV shows are mostly about modern city life and love affairs. The clothing, food and makeup of the actors in the series can easily become blockbust- ers overnight. Therefore, using prod- uct placement in the shows is one of the most important marketing tools for many lifestyle and cosmetic brands in Korea. The export of Korean cosmetics to Europe and the US is also increasing, but Korean cosmetics are still treat- ed as insider tips. The products are mostly introduced and sometimes also sold by fashion or beauty blog- gers. In this case, the products are mostly bought directly in Korea. The logistics and language are the big- gest challenges, along with identify- ing the correct products. There are a few exquisite niche brands with good functionality, some of which even carry a European-style organic certification. However, these prod- ucts are not always available and the delivery time is uncertain. The fan community for Korean cosmetics is constantly growing. But before em- barking on selling K-Beauty prod- ucts, it is very important to study the entire market firstly and then work with a resourceful partner to explore the possibilities. □ plant-based. This is due to the lack of information about certified natu- ral cosmetics and the differences be- tween various types of certifications. • Hanbang cosmetics are also play- ing an important role. According to the official definition in Korea, Han- bang cosmetics are “cosmetic prod- ucts scientifically formulated with versatile herbs based on the old wis- dom of traditional Korean herbal medicine, which ensures synergistic efficacy and safety that help improve skin conditions”. As “Hanbang” means “Chinese recipe” in Chinese, many Chinese consumers believe that Hanbang cosmetics are based on the philosophy of TCM (tradition- al Chinese medicine); they prefer buying these types of products from Korea, because they trust the quality and safety of cosmetic production in Korea. • The Korean cosmetic industry is very innovative and focusses on new product development and enhanced product functionality. Thus, it is not surprising that they are constantly working on new product ideas. Many of these ideas and products reach worldwide fame and are adopted by other international brands from Europe and America. One recent example is the Air Cush- ion BB cream initially sold by La- neige, a luxury cosmetic brand of Amore Pacific in Korea. This founda- tion is applied through an air cush- ion, blocks UV rays and covers im- perfections naturally. The biggest advantage of this product is the in- visible but correcting effect after ap- plication. This product soon turned into a consumer favourite after its launch in 2014. The “cushion” idea was adapted by some other inter- national brands such as L’Oréal, Lancôme, etc. sso- th a are tant nce: ve a fra- what rom ack- part Ko- ised etic are ents ucts: lant arth, s are with ow- ands ems with l- or China is the second-biggest market for cosmetic products worldwide BACKGROUND www.cossma.com l 29 K-Beauty is a huge trend in Europe, too Mei Gräfe, Consultant and Managing Director, Intergate Consulting COS1611_28_Graefe_Korea.indd 29 27.10.16 15:52 COS1611_28_Graefe_Korea.indd 2927.10.1615:52

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