SEOUL, February 26 (AJP) - Musinsa, the online fashion platform that has grown into a household name in K-fashion, is venturing into brick-and-mortar cosmetics — a field long dominated by CJ Olive Young under CJ Group.
The move is being watched closely, either as a possible overreach or as a necessary step in Musinsa’s bid to scale beyond fashion.
Musinsa said it will open its first permanent offline beauty flagship, “Musinsa Megastore Seongsu,” between April and June in Seongsu-dong, one of Seoul’s trendiest commercial districts.
The large-format store will house about 800 beauty brands and target Gen Z consumers and foreign tourists — a scale that rivals even Olive Young’s largest outlets.
Beauty has emerged as Musinsa’s next major growth category as the company looks beyond apparel.
Its total transaction volume reached 4.5 trillion won ($3.08 billion) in 2024, generating revenue of 1.24 trillion won and operating profit of 102.8 billion won. The beauty segment has been a standout, with overseas transaction volume surging 161 percent in 2025.
The challenge now is whether those online clicks can be converted into sustained offline sales.
"Cosmetics fundamentally require a physical space where consumers can test products before making a firm purchase decision," said Kim Ju-deok, a professor of beauty industry at Sungshin Women's University.
The elephant in the room: Olive Young
Any push into physical beauty retail must confront a dominant incumbent.
CJ Olive Young operates more than 1,300 stores nationwide and controls an estimated 68.3 to 90 percent of Korea’s health and beauty (H&B) market, depending on measurement standards.
Its financial scale underscores the gap.
While Musinsa’s revenue grew from about 993 billion won in 2023 to 1.24 trillion won in 2024, Olive Young’s sales expanded from 3.86 trillion won to nearly 4.8 trillion won over the same period. The retailer is widely expected to surpass 5 trillion won this year, supported by an operating margin of around 12.7 percent — unusually high for a brick-and-mortar chain.
The trap of fixed costs
Musinsa’s offline bet also comes at a structural price.
By opening a flagship in Seongsu, the company is giving up one of its biggest advantages as an online platform: low fixed costs.
Commercial rents in Seongsu-dong rose about 15 percent in the year to October 2025, driven by heavy foot traffic from young consumers and tourists. Property transaction prices in the area have surged more than tenfold over the past 15 years, exceeding 300 million won per pyeong (3.3 square meters).
For Musinsa, this means high upfront investment, rising operating costs and pressure to deliver consistently strong store traffic.
Pressure from below: Daiso’s rise
Musinsa is not only challenging Olive Young at the top. It is also facing growing competition from below.
Daiso has rapidly expanded its low-priced beauty lineup, turning its stores into major destinations for budget-conscious consumers.
Daiso’s cosmetics sales jumped 85 percent in 2023 and 144 percent in 2024, and are estimated to be growing at 70 to 80 percent annually in 2025.
By offering viral indie brands such as VT Cosmetics at rock-bottom prices, Daiso expanded its beauty portfolio from seven brands in late 2022 to more than 140 by late 2025.
The strategy has drawn price-sensitive young shoppers away from conventional H&B chains.
Betting on fashion-beauty synergy
Still, Musinsa is betting on differentiation rather than direct imitation.
The company plans to leverage its fashion-centric user base, proprietary data and influencer-driven ecosystem to blend apparel and cosmetics in ways traditional H&B stores cannot easily replicate.
By combining fashion intellectual property with curated beauty zones, Musinsa hopes to turn its flagship into a lifestyle destination rather than a conventional drugstore-style outlet.
Executives have also emphasized cross-selling, using online fan communities to drive traffic into physical stores.
"Operating both online and offline channels is no longer optional; it is essential," Kim added. "Gen Z relies heavily on the convenience of online shopping, but the physical experience completes the purchase—a dual-channel formula Olive Young has already proven highly effective."
Whether the Seongsu megastore becomes a “Trojan horse” that disrupts Korea’s beauty hierarchy, or falls victim to the “winner’s curse” that often hits fast-growing platforms entering the mainstream, remains uncertain.
What is clear is that South Korea’s cosmetics competition is no longer confined to apps and algorithms.
With Musinsa moving offline, Olive Young defending its turf, and Daiso pressing from below, the country’s beauty war has now moved decisively from screens to streets.
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