Invest KOREA

Korea’s cosmetics market is worth approximately USD 12.6 billion as of 2020, the 9th largest market in the world after India. By possessing its own cosmetics manufacturing technology, Korea has secured competitiveness in the global cosmetics market. Korea also serves as a test-bed for the product development of global brands.

Despite the COVID-19 pandemic, Korea’s cosmetics exports have steadily increased and exceeded USD　7 billion for the first time in 2020. It has recorded an average annual growth rate of 15.7% (2016-2020), maintaining its status as the world’s fourth largest exporter of cosmetics.

The Korean cosmetics industry has continued to expand exports in order to respond to the slowing of
domestic market growth and the market downturn caused by the COVID-19 pandemic.
It has recorded an average annual growth rate of 3.8% over the past five years (2016-2020).

The export of cosmetics, in particular, has recorded high growth, thanks to the popularity of
Hallyu (Korean Wave) led by K-Beauty. Its average annual growth rate over the past
five years (2016-2020) has reached as high as 15.8%.

Foreign investors’ continue to take interest in Korean's cosmetics market.

Unilever, a global cosmetics company, acquired Carver Korea in 2016. L’Oreal acquired Stylenanda in 2018.
Before and after these deals, other global companies, including Migros Corporation,
Johnson & Johnson, and Clariant, continued to invest in the Korean market. Gowoon Sesang Cosmetics, in particular,
has posted growing sales amid the COVID-19 situation, demonstrating the potential of K-Beauty.

The Korean government has been making efforts to intensively foster the cosmetics industry as
a major export industry of the future. The government aims to make Korea one of the top three cosmetics
exporters and create up to 308,000 jobs by 2022. It also plans to diversify export markets,
which are currently concentrated in the Greater China region.

Korea conducts consumer surveys and studies to understand the skin characteristics of Korean and
New Southern (Southeast Asia and India) consumers, on topics such as skin measurement, skin genome analysis,
and skin microbiological analysis. Based on the results, Korea develops customized products and
prepares market entry strategies.

The Korean cosmetics industry is actively engaged in industrial activities, mainly in the metropolitan area
where the market and distribution infrastructure are concentrated. Currently, 57.9% of the total number of
businesses and 57.1% of the total number of employees are located in this area.

In addition, regional clusters have been established in Gyeongsangbuk-do (Gyeongsan) and
Chungcheongbuk-do (Osong), thereby contributing to the development of the Korean cosmetics industry.
The establishment of K-Beauty Clusters has been continuously promoted through public-private
consultative bodies in complexes, such as Osan Gajang Industrial Complex, Hwaseong Hyangnam
Industrial Complex, Incheon Namdong Industrial Complex, and Chungbuk Osong/Ochang Industrial Complex.

The Korean government plans to establish a K-Beauty Cluster, where one-stop service can be provided
from cosmetics production, R&D on new technologies, beauty services and professional training, to promotion
and consulting for SMEs. The cluster will serve as a base for fostering the K-Beauty industry.