SEOUL, February 04 (AJP) - The quality of K-beauty is no longer in question. With low entry barriers and easy access to standardized ingredients and manufacturing, producing cosmetics has become relatively simple. What now separates winners from losers is speed, packaging, branding and, increasingly, price.
As Korean beauty brands continue to expand their global footprint — especially in the United States — competition at home is intensifying around affordability. While K-beauty has evolved from a viral trend into a major export industry, its fiercest battle is unfolding on domestic shelves.
That rivalry is sharpening with the latest move by Musinsa, which said it will open the first standalone offline store for its private-label brand Musinsa Standard Beauty on Feb. 12 at Hyundai Department Store’s Mokdong branch in Seoul. The opening marks its formal entry into South Korea’s fast-growing ultra-low-priced cosmetics segment.
The move places Musinsa in direct competition with Daiso, which has built a mass-market following around cosmetics priced mostly between 1,000 won and 5,000 won ($0.75 to $3.75). Daiso’s budget beauty line has become a magnet not only for local shoppers but also for foreign tourists seeking affordable K-beauty souvenirs.
“Whenever I visit Korea, I clear out the Daiso cosmetics aisles with my credit card,” said Ashley Lee, a Korean American living in the United States. “My colleagues back home always ask me to bring back specific products.”
According to Daiso, overseas card transactions across its stores jumped about 60 percent in 2025 from a year earlier. At its Myeongdong Station branch — one of the most popular locations for tourists — foreign card sales rose roughly 40 percent year-on-year from January to November.
“The Myeongdong store is among our busiest for foreign visitors, and beauty products are our top-selling category there,” a company official said.
Sales data underline how rapidly budget beauty has grown. At Asung Daiso, cosmetics sales surged 85 percent in 2023, 144 percent in 2024 and 70 percent in 2025, making the segment one of the fastest-expanding corners of Korea’s retail market. Larger players, including Olive Young and major hypermarkets, have since moved in, intensifying competition for value-conscious consumers.
Musinsa is positioning itself squarely in that battleground. Its Musinsa Standard Beauty products are mostly priced between 3,900 won and 5,900 won ($2.90 to $4.40) — slightly above Daiso’s entry-level range but well below typical mid-priced offerings at health-and-beauty chains.
The pricing reflects an effort to carve out a “value-for-money” niche rather than compete directly in premium branding. Its first beauty-only store will span about 30 square meters and showcase around 20 core products, suggesting a pilot format designed to test demand.
“The Mokdong store features a dedicated space solely for our beauty line,” a Musinsa official said. “After launching ultra-low-priced products last September, transaction volumes grew rapidly, giving us confidence in this segment.”
“In cosmetics retail, online and offline channels have to work together,” said Kim Ju Duk, a professor of the beauty industry department at Sungshin Women’s University. “When consumers can test products in person, it has a direct impact on purchase decisions, and that experience often leads to repeat purchases online later.”
He added that Musinsa’s move could meaningfully lift sales. “Olive Young’s growth accelerated after it started running online and offline channels in parallel around 2017 and 2018. If Musinsa follows a similar path, this offline push could turn out to be a very effective strategy.”
The company is treating the store as a testbed, citing Mokdong’s dense student population and surrounding academies as key factors. If successful, similar beauty-focused outlets could follow.
The push comes as foreign demand increasingly shapes the K-beauty market. Retailers in districts such as Myeongdong and Seongsu report rising purchases by overseas visitors, many of whom favor lower-priced skincare and cosmetics for everyday use or gifts.
Against that backdrop, analysts see Musinsa’s move as a bet that price competitiveness — not just trend-driven marketing — will define the industry’s next phase.
“Foreign customers already account for about 25 percent of transactions for Musinsa Standard Beauty,” a company official said. “As our offline presence expands, exposure to overseas visitors will grow naturally.”
The brand’s flagship stores, including its Myeongdong outlet, already draw roughly half of their customers from abroad, according to the company. With competitive pricing and manufacturing partnerships with firms such as Cosmax, Musinsa expects foreign demand to continue rising.
Musinsa entered the private-label beauty business in 2021 with affordable functional products, but sharpened its strategy after forming a partnership with Cosmax in September last year. Since then, it has expanded its low-cost lineup and plans further collaborations, including with Dashu and LG Household & Health Care.
Under its current roadmap, Musinsa aims to position Musinsa Standard Beauty as a sub-10,000-won value brand, while differentiating its other private labels — Oddtype and Whizzy — in color cosmetics. The company plans to focus on online channels at home and offline expansion overseas for those brands.
While sales data from the Mokdong store are yet to emerge, broader market figures point to rising stakes. With Daiso posting triple-digit growth in some years and foreign demand adding momentum, the fight for Korea’s budget beauty consumers is no longer a sideshow. It is becoming one of the industry’s main fronts.
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