Global demand for K-beauty has led domestic cosmetics original design manufacturers (ODM) to achieve record earnings in the second quarter. The rise in indie brands expanding overseas has resulted in increased orders for both sun care and skincare products, alongside a diversification of client companies and export regions. Although the second quarter is typically considered the peak season for the cosmetics ODM industry, analysts predict continued strong growth into the third quarter.
According to industry reports on August 18, Korea Kolmar recorded consolidated sales of 861.3 billion won and an operating profit of 110.3 billion won in the second quarter, marking increases of 17.8% and 50.2%, respectively, compared to the same period last year. Notably, this is the first time that a cosmetics ODM company has surpassed 100 billion won in quarterly operating profit. Domestic sales also rose by 31.2% to 430.4 billion won, driven by increased orders for sun care and skincare products from indie brands, which improved both revenue and profitability.
Korea Kolmar's sun care segment has grown to account for 35% of its sales. While the second quarter is usually a peak performance period, this year has seen a reduction in seasonality. Lee Kyo-seok, a researcher at Shin Young Securities, stated, "Due to a higher proportion of sun care products compared to competitors, we expect third-quarter sales to be similar to or slightly higher than the previous quarter, despite the second quarter being a seasonal peak. We anticipate increased orders from major skincare clients ahead of the fourth quarter's Black Friday."
Cosmax also reported record earnings in the second quarter, with sales of 794.9 billion won and an operating profit of 73.7 billion won, reflecting increases of 27.5% and 21.2%, respectively. Domestic sales surpassed 500 billion won for the first time, reaching 518.4 billion won. Sales in China increased by 33%, while sales in the United States surged by 79%. Notably, the U.S. subsidiary achieved its first operating profit since its establishment, thanks to increased orders from global cosmetics companies and indie brands.
Oh Rin-ah, a researcher at LS Securities, noted, "In the third quarter, we expect Korea to maintain strong order flows centered on skincare, with sales growth projected at 35% to 40%. The U.S. market is also expected to maintain profitability in the second half due to reorder and new order increases from existing clients."
Cosmecca Korea reported second-quarter sales of 226.1 billion won and an operating profit of 32.1 billion won, marking increases of 39.8% and 39.3%, respectively, achieving its highest quarterly performance. The domestic basic segment saw a 94.8% increase, while sun care sales rose by 35.4%. The expansion of product lines, including derma skincare and hydrogel, along with securing new clients and reorders from existing customers, contributed to this growth.
Jung Dong-hee, a researcher at Samsung Securities, stated, "The diversification of domestic beauty distribution channels, inbound growth, and expansion into overseas markets are expected to support robust growth in the second half. With the operation of the Ochang plant in 2027, additional growth potential can also be secured."
The strong performance of domestic cosmetics ODM companies aligns with the increase in K-beauty exports. According to the Ministry of Trade, Industry and Energy, cosmetic exports have risen for nine consecutive months since November of last year. Last month, exports reached $1.351 billion, a 37.8% increase. Exports to the United States rose by 34.9%, while those to the European Union increased by 58.3%. The expansion of K-beauty sales beyond North America into Europe has led to new product launches and additional orders from brand companies, contributing to the increase in orders for ODM firms.
According to industry reports on August 18, Korea Kolmar recorded consolidated sales of 861.3 billion won and an operating profit of 110.3 billion won in the second quarter, marking increases of 17.8% and 50.2%, respectively, compared to the same period last year. Notably, this is the first time that a cosmetics ODM company has surpassed 100 billion won in quarterly operating profit. Domestic sales also rose by 31.2% to 430.4 billion won, driven by increased orders for sun care and skincare products from indie brands, which improved both revenue and profitability.
Korea Kolmar's sun care segment has grown to account for 35% of its sales. While the second quarter is usually a peak performance period, this year has seen a reduction in seasonality. Lee Kyo-seok, a researcher at Shin Young Securities, stated, "Due to a higher proportion of sun care products compared to competitors, we expect third-quarter sales to be similar to or slightly higher than the previous quarter, despite the second quarter being a seasonal peak. We anticipate increased orders from major skincare clients ahead of the fourth quarter's Black Friday."
Cosmax also reported record earnings in the second quarter, with sales of 794.9 billion won and an operating profit of 73.7 billion won, reflecting increases of 27.5% and 21.2%, respectively. Domestic sales surpassed 500 billion won for the first time, reaching 518.4 billion won. Sales in China increased by 33%, while sales in the United States surged by 79%. Notably, the U.S. subsidiary achieved its first operating profit since its establishment, thanks to increased orders from global cosmetics companies and indie brands.
Oh Rin-ah, a researcher at LS Securities, noted, "In the third quarter, we expect Korea to maintain strong order flows centered on skincare, with sales growth projected at 35% to 40%. The U.S. market is also expected to maintain profitability in the second half due to reorder and new order increases from existing clients."
Cosmecca Korea reported second-quarter sales of 226.1 billion won and an operating profit of 32.1 billion won, marking increases of 39.8% and 39.3%, respectively, achieving its highest quarterly performance. The domestic basic segment saw a 94.8% increase, while sun care sales rose by 35.4%. The expansion of product lines, including derma skincare and hydrogel, along with securing new clients and reorders from existing customers, contributed to this growth.
Jung Dong-hee, a researcher at Samsung Securities, stated, "The diversification of domestic beauty distribution channels, inbound growth, and expansion into overseas markets are expected to support robust growth in the second half. With the operation of the Ochang plant in 2027, additional growth potential can also be secured."
The strong performance of domestic cosmetics ODM companies aligns with the increase in K-beauty exports. According to the Ministry of Trade, Industry and Energy, cosmetic exports have risen for nine consecutive months since November of last year. Last month, exports reached $1.351 billion, a 37.8% increase. Exports to the United States rose by 34.9%, while those to the European Union increased by 58.3%. The expansion of K-beauty sales beyond North America into Europe has led to new product launches and additional orders from brand companies, contributing to the increase in orders for ODM firms.
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.