"Many people say the quality is good despite the low prices," said a customer at Daiso's Gwangjin branch in Seoul on October 1. The store was bustling with a diverse clientele, from high school students to middle-aged shoppers and foreign visitors. Some customers were seen filling their baskets with multiple units of a popular face mask known for its 'sold-out frenzy' on social media.
While browsing product reviews, one customer remarked, "I feel like I bought a lot, but it only cost about 30,000 won, so it’s not a big burden. It feels more like smart shopping at a reasonable price rather than just buying cheap products."
This Daiso location, approximately 66 square meters, features about 80% of its products in the beauty category. This marks a shift for Daiso, which originally started as a 1,000 won shop primarily selling household goods, now dedicating most of its space to cosmetics.
On the same day, Musinsa Beauty in Hongdae, Mapo District, emerged as a new hotspot. The store spans about 1,262 square meters across four floors, filled with customers eager to try products. Staff in pink uniforms provided product explanations in both Korean and English.
A customer pushing a stroller said, "I came in just to take a quick look after hearing about the new Musinsa Beauty store, but I ended up spending a lot of time comparing various products." A young couple from Japan added, "We were curious about Korean cosmetics, and there are many unique products here."
Daiso and Musinsa are both diving into the beauty market. Daiso maintains a price point below 5,000 won, while Musinsa focuses on indie brands and experiential shopping. With rising prices, more consumers are seeking reasonably priced cosmetics, prompting retailers to expand their beauty offerings.
◇ Daiso Lowers Barriers to Purchase with Affordable Cosmetics
Daiso's competitive edge lies in its pricing strategy, applying its policy of selling all products for under 5,000 won to cosmetics as well.
Daiso gained significant attention for its cosmetics starting in 2023, when a 3,000 won skincare product went viral on social media, leading to frequent sellouts. Following this, content sharing reviews of Daiso cosmetics surged, prompting beauty brands to launch products aligned with Daiso's uniform pricing policy.
Sales have also seen rapid growth. According to Embrain's Purchase Deep Data, the estimated sales of Daiso beauty products reached approximately 361.9 billion won in March this year, a 39.6% increase from the previous year. The estimated sales of 'second brands' launched by existing cosmetics companies to match Daiso's price point also rose by 58.2% to about 85.3 billion won during the same period. This trend reflects a growing consumer preference for rational spending, emphasizing satisfaction and the popularity of dupes—affordable alternatives that offer similar quality to popular products.
An industry insider noted, "Daiso clearly meets consumer expectations regarding price and purchasing intent. With many consumers eager to try products without financial strain, it serves as an effective channel for attracting new customers and encouraging product trials."
◇ Musinsa's 70% Indie Brand Focus Expands Retail Competition
Musinsa aims to provide customers with the opportunity to experience and discover a variety of brands. Of the approximately 600 beauty brands available, 70% are indie brands.
The choice of Hongdae for its first offline beauty store was influenced by the area's demographics. According to Musinsa's data, 67% of the foot traffic in Hongdae consists of foreigners, and over half of domestic visitors are women.
The first floor features makeup and fragrance products, while the second floor is dedicated to skincare, hair, body, men's, and dental care items. Customers tested color cosmetics on their hands and tried skincare products. Some even washed their faces at sinks after applying products. A beauty pharmacy, Beauty Onnuri, is located in the basement.
Kim Yeon-jin, head of Musinsa Beauty's offline team, stated, "Our goal is to create a space where indie brands can meet new customers, foreign visitors can discover K-beauty brands they weren't aware of, and domestic customers can find new trends."
Musinsa's beauty business, which began in fashion, has already grown significantly. Last year's transaction volume for Musinsa Beauty reportedly increased by over 50% compared to the previous year. By expanding its online beauty business into offline spaces, Musinsa aims to capture the demand for direct product experiences.
◇ Expanding Beauty Retail Channels Beyond Traditional Stores
The channels for selling cosmetics are broadening beyond health and beauty stores like Olive Young. Convenience stores are also entering the market with small-sized, low-cost cosmetics.
The shift of retailers toward beauty is influenced by the unique marketability of cosmetics. Compared to clothing or electronics, cosmetics have a shorter purchase cycle and frequent new product launches, making them effective for encouraging repeat visits. Additionally, customers shopping for cosmetics may also purchase other items.
Data from the shopping experience analysis platform Pickple revealed that 64.4% of female respondents shop for cosmetics at least once a month. When selecting cosmetics, 40% of women and 36.9% of men cited 'performance testing' as the most important factor. Given the repeat nature of purchases and the strong demand for product trials, cosmetics represent a favorable product category for retailers to attract customers.
According to the Ministry of Food and Drug Safety, South Korea's cosmetics exports reached $7 billion (approximately 9 trillion won) in the first half of this year, marking a 27.3% increase from the same period last year and setting a record for the highest exports in the first half of the year. As demand for Korean cosmetics grows overseas, major domestic commercial districts frequented by foreign tourists are emerging as key sales points for K-beauty.
An industry insider commented, "Beauty is a category where the spread through social media and offline experiences naturally connect. While entering the market is not difficult, it is crucial to maintain competitiveness to be consistently chosen by consumers."
* This article has been translated by AI.
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