On a weekday afternoon at a Daiso store in Jung-gu, Seoul, customers continued to browse skincare and color cosmetics. A 20-something office worker, identified as A, was seen researching product ingredients and reviews. "These days, there are many positive reviews for products priced between 3,000 and 5,000 won, so I feel comfortable trying them out," A said. "If it's made by a well-known cosmetics company, I tend to trust it even if the price is low."
As inflation drives demand for cost-effective cosmetics, major beauty companies are ramping up their efforts to target Daiso shoppers. Instead of directly lowering prices on existing flagship brands, they are introducing Daiso-exclusive brands and smaller-sized products priced between 1,000 and 5,000 won to attract new customers.
According to industry sources, Amorepacific is segmenting its Daiso-exclusive products across skincare, color cosmetics, and men's grooming. The brand 'Mimo by Mamonde,' launched in September 2024, achieved cumulative sales of 1 million units within four months and surpassed 2 million units in seven months. Etude's 'Play 101' also sold approximately 1 million units in the first half of the year after entering Daiso in March 2022. The men's brand Be Ready's 'Prep by Be Ready' sold 100,000 units within three months of its launch, becoming the top seller in the men's care category. Amorepacific is gathering consumer feedback and sales data at Daiso under the principle of 'going where the customers are,' planning to introduce new ingredients and formulations in smaller sizes to drive purchases of full-sized products from existing brands.
LG Household & Health Care operates the Daiso-exclusive brand 'CNP by Odi-Tidi' under its dermatological cosmetics line. The flagship product, 'Spot Calming Gel,' gained popularity through beauty influencers, surpassing 1 million units in cumulative sales within nine months of its launch. The ultra-low-cost strategy is also expanding beyond Daiso. LG Household & Health Care launched 'Glow:Up by Beyond' exclusively at E-Mart, starting with eight products in April last year and increasing to 18 products early this year. Cumulative sales exceeded 480,000 units as of January this year, with sales also occurring in E-Mart stores in the Philippines, Vietnam, and Mongolia.
Aekyung Industries introduced its color cosmetics brand 'Two Edit' through Daiso, selling over 1.3 million units within seven months. The flagship product, 'Tight Eye Liner,' sold 230,000 units during the same period. Initially, half of the 28 products stocked at Daiso Mall sold out within five days. Building on domestic success, the brand has expanded to U.S. Miniso stores and Don Quijote locations in Guam and Hawaii, as well as local K-beauty shops. The trouble care brand 'A-Solution' is also seeing growth at Daiso, with its 'Mugwort Calamine Soothing Spot' selling out in three supply rounds and over 2,500 requests for online restocks. Daiso's sales for the quarter increased eightfold compared to the same period last year, with a 2,000 won trouble patch selling out its initial stock of 100,000 units within a month.
Beauty companies are drawn to Daiso due to its 'low purchase barrier.' Consumers can test new ingredients and products at a low cost, while companies can quickly assess market viability through sales speed, reviews, and social media responses. However, the expansion of ultra-low-cost products may cannibalize sales of existing flagship brands. If consumers become accustomed to products priced between 3,000 and 5,000 won from the same manufacturer, they may find the prices of products in the 20,000 to 30,000 won range burdensome. Striking a balance between attracting new customers and maintaining the value of existing brands is emerging as a challenge for beauty companies.
An industry insider noted, "While entering Daiso is effective for attracting new customers, it could increase price resistance for existing mid-range lines. Separating the targets and identities of ultra-low-cost and premium brands will be a challenge for major beauty companies moving forward."
* This article has been translated by AI.
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