Invest KOREA

Korea is leading the skincare and functional products market by using various raw materials based on its excellent technology. The global functional cosmetics market is valued at USD 47 billion (in 2017, 16% of the total), and whitening, hydration, and moisturizing products are especially popular in Southeast Asia. Having introduced the functional cosmetics system for the first time in the world (in 1999), Korea is leading the functional cosmetics market by tapping into various raw materials and technologies. In addition, Korea has continuously launched cosmetics made with various herbal, natural, and organic ingredients to keep pace with the clean beauty trend. Korea is ranked fourth in the global skin care market share and stands out in the derma cosmetics segment based on excellent R&D technology.

Korea is home to some of the world's top ODM/OEMs and facilities, making it easy to launch innovative products. Several leading international makeup brands have already partnered with Korean ODM/OEMs to champion the global market. Korean consumers are quick to respond to innovative technologies and new products, and have high standards for quality and safety. In that regard, Korea is suited to be a test bed for cosmetic makers looking to assess the viability of their newly-developed products.

In recent years, there has been a growing demand for customized cosmetics and beauty devices, especially among younger consumers. With AI and AR-based applications and mobile devices, customized cosmetics with their beauty technologies accurately recommend products by considering the individual characteristics of consumers. Leading international brands such as L'Oreal and Yves Saint Laurent have also entered the customized cosmetics market. Korea has a large pool of beauty technology startups specializing in customized devices and innovative technologies based on Korea's excellence in IT technology. The Ministry of Food and Drug Safety's approval of the customized cosmetics sales business system in 2022 helped lay a solid foundation for the growth of customized cosmetics. Moreover, Korea's growing cultural influence and status is also raising global interest in and awareness of cosmetics made in Korea.

For the past five years, Korea held the ninth place in global market share, following traditional cosmetics leaders such as the US, UK, and Japan.

Between 2017 and 2020, Korea was the world’s fourth biggest exporter of cosmetics, and was ranked No. 3 in 2021 by overtaking Germany.

M completely acquired Gowoonsesang Cosmetics, which had developed the derma cosmetics brand Dr.G for the past twenty-two years. The acquisition signifies that global players are highly interested in beauty products made with new technologies such as derma cosmetics. The case also shows the presence of Korean brands and companies that are already building global recognition in this segment based on innovative technologies.

Prior to the above case, an American global cosmetics group acquired Korea's Have & be, which owns the highly-recognized derma-cosmetics brand Dr. Jart. The case is another testament to the growing global interest in derma-cosmetics and the status of Korean tech companies showing clear strengths amidst the trend.

R, a French pet food maker, has established a feed production plant in Gimje, Jeonbuk. The plant exports 90% of its production and is virtually serving as R's production headquarters in the Asia-Pacific region.

In 2021, the Korean government announced a comprehensive strategy for driving job growth, creating synergy with the Korean Wave, and leading the global cultural trends by innovating K-Beauty.

In line with the above strategy, the Korean Ministry of Health and Welfare is supporting efforts to strengthen basic cosmetics technologies such as skin and materials by introducing Innovative Growth Skin Health Basic Technology Development Project (2023, KRW 7.1 billion).

It is also implementing projects to create and strengthen the overall ecosystem of the cosmetics industry in areas of infrastructure, regulatory system, workforce training, export support, and K-beauty promotion.