South Korean cosmetics giants are changing their overseas strategies, which have historically focused on the Chinese market. They are now expanding their growth to the United States, Japan, and Europe, adopting a 'global portfolio' strategy that tailors market approaches to each brand's strengths.
According to the Ministry of Food and Drug Safety on September 22, the number of countries importing South Korean cosmetics increased from 153 in 2021 to 202 last year, marking a nearly 50-country rise in just four years.
K-Beauty is now exported to most countries worldwide, and the export landscape has notably shifted. In 2021, China accounted for 53.2% of South Korea's cosmetics exports, but this figure dropped to 17.7% last year due to increased regulations from the Chinese government and a focus on domestic brands. In contrast, the U.S. became the largest market for South Korean cosmetics, making up 19.1% of exports, followed by China (17.7%), Japan (9.5%), Hong Kong (6.1%), and Vietnam (4.2%).
An industry insider noted, "Before COVID-19, K-Beauty's overseas business was centered on China and duty-free channels, but now, with varying consumer preferences and distribution environments by country, the ability to operate in multiple markets simultaneously has become crucial."
Amorepacific is promoting a 'global rebalancing' strategy, focusing on key markets such as the U.S., Europe, Japan, China, India, and the Middle East. The goal is to expand growth evenly across regions rather than relying heavily on specific countries. The company's flagship brand, Sulwhasoo, has updated its brand image by changing its logo from Chinese calligraphy to English to appeal to global consumers.
Market approaches have also evolved. The U.S. is seen as a hub for global expansion, with Sulwhasoo, Laneige, and Innisfree, along with new categories like derma beauty, clinical skincare, and hair care, being introduced. In Europe, the focus is on expanding brands through major retail networks like Sephora and Boots, while in Japan, efforts are concentrated on increasing customer touchpoints through department store channels.
In China, the emphasis has shifted from mere expansion to improving business structure and profitability, with plans to enhance product competitiveness for Sulwhasoo and the brand Lya. The strategy involves leveraging local platforms and distribution networks such as Douyin, Tmall, and JD.com to strengthen market competitiveness.
An Amorepacific representative stated, "The long-term global direction is not to reduce dependence on specific countries but to grow a balanced global business portfolio. We are operating in different markets based on brand characteristics and market opportunities."
LG Household & Health Care is also intensifying its regional strategies tailored to each brand's strengths. The brand The History of Whoo targets China, while CNP, Belif, The Face Shop, and Dr. Groot focus on North America, and Yusimol aims at the Japanese market.
Marketing strategies have been refined to suit the characteristics of each market. In North America, CNP is being promoted to emphasize its derma-cosmetic expertise, expanding key channels like Ulta Beauty and Amazon. In major global regions, the core of derma beauty, including skincare and sun care, accounts for around 70%. In the U.S. e-commerce market, 91% of K-Beauty is concentrated in skincare and sun care, which is why LG Household & Health Care is developing CNP as a key brand in North America.
In the Chinese market, the plan is to strengthen the premium image of The History of Whoo, which has established itself as a luxury brand. The recent global launch event for The History of Whoo in Shanghai is part of the strategy to enhance brand competitiveness in China.
A representative from LG Household & Health Care remarked, "China remains a key market with annual sales exceeding 1 trillion won, and we continue to focus on The History of Whoo. North America is a market where K-Beauty is experiencing significant growth, and we are strengthening our approach by expanding retail partnerships."
The company has also restructured its organization to focus on brand value in global operations. It now operates under five business divisions: Luxury Beauty, Derma & Contemporary Beauty, Neo Beauty, Cross-Category Beauty, and HDB. The newly established Neo Beauty division is tasked with developing Dr. Groot and Yusimol as global high-tech beauty and healthcare brands.
An industry insider commented, "In the past, success in the Chinese market alone could drive overseas business growth, but now, companies must cultivate multiple markets simultaneously. The ability to operate brands according to the unique consumer characteristics and distribution environments of each country will determine future competitiveness."
* This article has been translated by AI.
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