K-Beauty : statistics, facts, forecasts – 2021. [Updated]
Korean cosmetics are now developing into a category that promotes Korean culture, rather than a single product. As the trend of K-pop and K-drama continues to become K-beauty, not only cosmetics are sold, but skincare and makeup using Korean cosmetics are also popular. Even imitating makeup in a Korean style has established itself as a culture.
With the spread of Corona 19, the global trade volume growth rate is expected to deteriorate to -9.2% and the economic growth rate to -4.4%. In Korea, between January and October, the trade amount is -8.4%, and the economic growth rate is -1%. Despite these adverse conditions, there are many small and medium-sized enterprises (SMEs) looking for a way from overseas rather than a narrow domestic market.
K-Beauty Companies that have achieved excellent export performance this year are rapidly grasping the social changes triggered by Corona 19, and are changing opportunities for crises by discovering differentiated products and overseas markets.
At the same time, in the export strategy of these companies, there are four success keywords such as :
- Technology (differentiate with technology)
- Environment (eco-friendly environment)
- Change (capture changes in global life patterns)
- Health (move consumers with a health theme)
One of the global trends is the increase in sales of “home care” products. Instead of looking for beauty service facilities, the number of home care families who do beauty care directly at home has increased rapidly.
Functional products such as blocking harmful substances and soothing skin problems and cosmeceutical products gained popularity. It has become a “conscious consumerism” trend that takes into account social responsibility such as safe ingredients, environmental sustainability, and animal protection.
New demand also emerged according to quarantine regulations such as the mandatory wearing of masks and hand washing. Demand for products in the form of a mist and stick that can be applied to the face without getting it on the hands has increased, and hand creams also attracted attention due to the use of handwashing and detergents.
The demand for eye makeup was higher than the lipstick covered by the mask, and matte cosmetics and tattoo-type color cosmetics that do not smudge or disappear even after wearing the mask were preferred.
Korean Сosmetic exports from January to October 2020 increased by 15% compared to the previous year. Exports of basic cosmetics, cleansers, eye shadows and nail products increased significantly, while exports of makeup products, lipsticks, and face powders declined.
Cosmetics exports are expected to exceed $8 billion in 2021. The Korea International Trade Association predicted that “the export of cosmetics in the year will be $8,599 billion, a year-on-year increase of +10.7%” in the report “2020 Import and Export Assessment and Outlook for 2021”.
However, the recently announced cumulative cosmetic exports from January to November by the Ministry of Trade, Industry and Energy were $6.89 billion (+15.7%), and it is estimated that the exports in 2020 years will be around $7.5 billion. Therefore, even when conservatively reflecting the 10% increase, it is predicted to reach the low end of $8 billion.
Regarding the cosmetics export trend in ’20, he predicted that “cosmetics that were previously distributed offline will grow through online distribution networks such as live commerce in line with the untact era.”
By region, the main factor was the increase in demand for cosmetics due to the influence of the Korean Wave in China and Japan and the expansion of online distribution networks. ‘The market share of China (50.1%) and Japan (8.5%) from January to October 20 was close to 60%. It is expected that the demand for cosmetics in China and Japan will continue to improve.
Small and medium-sized K-Beauty companies are in charge of about 70% of the actual cosmetics exports, and exports are doing better compared to the stagnant domestic demand.
Clean & Vegan Beauty in the spotlight of the hygiene product group after Corona 19
In the cosmetic market this year, sales of related products surged as the importance of personal hygiene management was emphasized due to the Corona pandemic. As a result, the launch of hygiene products such as masks and hand sanitizers was a rush.
In addition, with the use of masks for a long time due to Corona 19, more people worry about skin sensitivity and skin irritation, and the growth of skin care cosmetics continued.
As interest in a sustainable environment increased, the craze for “clean & vegan beauty” was strong in the cosmetics industry. According to the US market research firm Grand View Research, the global vegan cosmetics market is expected to reach $15.3 billion this year, and to grow to $20.8 billion by 2025.
Accordingly, the industry joined the vegan craze by launching a variety of vegan-certified vegan lines, regardless of category, from basics, hues and ingredients to packaging.
Vegan beauty, which was the focus of basic cosmetics in the early days, has now expanded. In addition, a number of makeup brands continue to introduce vegan-certified color products, and the vegan clean beauty trend is expected to continue in 2021.
K-Beauty – Survival Strategy for Corona 19
This year, cosmetics companies had a hard time than ever. As the world stopped due to the Corona 19 pandemic. Immediately, sales and operating profits slumped. In line with the intact trend, the axis of consumption has shifted significantly online, and the distribution channel has also changed, such as reducing offline stores. As a result, offline cosmetics stores were hit directly, and duty-free store sales, which relied on foreign tourists due to restrictions on movement between countries, plummeted. The move to export overseas also took a break. The damage to the korean cosmetics industry is clearly revealed in changes in the performance of cosmetics companies. Korean cosmetics public companies were struggling with negative growth in sales, operating profit, and net profit as they were hit by Corona 19 in the first quarter of this year. Corona 19’s shadow was also dark in the 2nd and 3rd quarters. Sales, operating profit, and net profit all fell from the same period last year, and the impact of the prolonged corona 19 was not escaped.
K-Beauty Promising regions for cosmetics export in 21
The number one exporter was China, with a market share of more than half (50.2%). As direct exports to China increased, intermediate transit Hong Kong (-20.3%) declined. Japan jumped to third place with the 4th Korean Wave boom and the K-beauty. The US (+20.1%) also succeeded in expanding the K-beauty area on a solid rise. Among the 20 largest export countries, Australia ranked first (+95.3%), second-ranked United Arab Emirates (+78%) and third-placed Japan (59.6%).
2020 was a year in which cosmetics companies faced mixed joys due to sluggish domestic demand and polarization of exports. Due to the Corona 19 impact, the overall demand plummeted to -16.2% offline and +2.7% online due to refraining from going out and non-face-to-face consumption.
China predicted that color cosmetics (HS 330499) were promising. The rapid growth of premium color cosmetics (an annual average increase of 20%) and facial makeup and lip products are expected to grow explosively.
Japan – “Korea ranked second in the imported cosmetics market after France, showing an increase for three consecutive years.” Accordingly, K-Beauty suggested that it should focus on online marketing and introducing unique products that are not in the Japanese market.
North America predicted that the keywords of Clean and Green emerged as the core of the consumer market and that avoidance of processed foods, Vegan and, Gluten-Free will continue to be popular. It said that it should pay attention to natural cosmetics under the theme of’clean beauty, eco-friendly consumer goods’, and cosmetics.
The cosmetics market size of Russia and CIS is 11th in the world and 5th in Europe. In 2019, Korea ranked third among the CIS cosmetics importers, with a 9.6% market share.
Southeast Asia has changed consumption patterns since Corona 19
Long-term corona 19 causes large and small changes in the business areas to daily consumption and habits.
Increased use of online content and accelerated digital transformation. In addition, as the consumer market reorganized centered on online, global online demand for cosmetics increased by 12%.
The e-commerce penetration rate is expected to increase by 43.5% (’20) → 60.6% (’24), and the market size of $62 billion (’20) → $172 billion (’25). Also noteworthy is the increase in demand for electronic payments, such as a decrease in cash payments and an increase in digital remittances.
European Union classified cosmetics as a promising item, with EU cosmetics exports increasing by 12.3% in the first half of 2020.
The Netherlands has expanded the expansion of Korean cosmetics into major retail markets due to the influence of influencers.
Sweden handled mask packs, basic cosmetics, and makeup in local department stores due to the Korean Wave fever.
Croatia reported that interest in Korean cosmetics is increasing.
Marketing – mainly online through online shops, YouTubers and SNS influencers.
The Middle East selected it as a promising item, saying, “Korean cosmetics increased 51.9% year-on-year in October, and the demand for skincare products centered on basic cosmetics is rapidly increasing due to the recent spread of the Korean Wave.”
In the Middle East, exports of K-beauty, mainly Saudi Arabia, are on the rise after the Saudi crown prince visited Korea.
Brazil is the 8th largest market for skincare. Annual skincare sales are expected to grow by 6% annually by 2024. In addition, Chile is promising to advance into K-beauty as demand for cosmetics is on the rise due to increased purchasing power due to the increase in the middle class.
Personalized Beauty / Custom Beauty Products
Global market for Next-Generation Personalized Beauty was valued at US$ 38.02 Billion in 2019 and it is expected to reach US$ 72.55 Billion in 2028, recording a promising CAGR of 7.5% during the period of 2019-2028.