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Tag: K-Beauty

  • PharmaResearch Rolls Out Rejuran Cosmetics Across 148 Sephora Canada Stores

    PharmaResearch Rolls Out Rejuran Cosmetics Across 148 Sephora Canada Stores

    South Korea’s PharmaResearch launched its Rejuran Cosmetics skincare line across all 148 Sephora Canada stores on Sept. 1.

    The nationwide rollout places eight product formulations, including its Turnover Ampoule and Dual Effect Ampoule, into Canadian retail stores alongside Sephora’s online channel.

    Featured on Sephora Canada’s Skincare Next Big Thing Wall, the collection relies on c-PDRN, a cosmetic ingredient purified from wild salmon DNA. PharmaResearch developed the compound from the polynucleotide technologies it uses in its injectable aesthetic skin boosters sold across more than 50 countries.

    Translating Clinical Injectables to Prestige Shelves

    The Canadian retail launch extends a clear playbook: converting medical aesthetic brand equity into mass prestige topical products. Consumers familiar with professional clinic procedures in Asia are increasingly seeking the same bio-active ingredients in daily skincare regimens.

    “Through a tailored omnichannel strategy, we aim to build meaningful connections with Canadian consumers and strengthen our market presence,” said Jooyeon Song, Head of Cosmetics at PharmaResearch USA.

    Margin Pressures and Shelf Competition

    Derma-cosmetic brands derived from Asian pharmaceuticals face a different commercial environment in North American retail compared to domestic clinic networks. Prestige beauty retailers demand heavy promotional support, co-op marketing fees, and dedicated floor space allocations that can compress wholesale margins if inventory turns slow down.

    Competition on the derma-skincare wall is intense. Rejuran must defend shelf share against entrenched clinical lines and lower-priced Korean skincare competitors already commanding established followings across Canadian cities.

    US Manufacturing Shapes North American Strategy

    In July, PharmaResearch agreed to acquire California contract manufacturer Cosmetic Group USA to secure domestic production capacity and stabilize supply lines across the Americas. That transaction followed the brand’s US retail debut in Sephora stores earlier in the year and coincided with a concurrent retail entry into Sephora Singapore.

    PharmaResearch will now focus on closing the integration of Cosmetic Group USA’s production facilities to supply North American retail channels directly and cut transpacific freight lead times from its Gangneung base.

  • Star Leap Overhauls Beauty Sourcing as Global Markets Fragment

    Star Leap Overhauls Beauty Sourcing as Global Markets Fragment

    Hong Kong supply chain distributor Star Leap has revamped its cosmetics procurement model to target regional divergences across Southeast Asian, European, and American beauty retail markets.

    The company confirmed that global demand patterns no longer align across key consumer territories, forcing wholesalers to match stock directly to local channel mechanics rather than relying on global brand awareness.

    Shifting Channel Demands Across Regions

    Market dynamics are splitting along regional lines. In Vietnam and across wider Southeast Asia, multinational cosmetics labels face stiff competition from domestic brands, producing a price-sensitive consumer base with distinct SKU preferences.

    Western territories show different retail drivers. United States retailers are tying physical store sales directly to artificial intelligence tools and virtual testing setups, while European buyers are shifting purchasing budgets toward South Korean and Japanese beauty imports at the expense of traditional domestic lines.

    Matching Inventory to Local Channels

    Distributors must balance unit costs against shelf-life constraints and regional stock velocity. Star Leap tracks purchasing costs, batch codes, and SKU assortments against specific distribution channels to prevent unsold stock sitting in secondary markets.

    Cross-border beauty logistics across Asia Pacific historically relied on moving excess inventory between territories when domestic demand slowed. Rising import compliance standards and the rapid growth of domestic Southeast Asian brands have largely closed those secondary arbitrage routes.

    Procurement teams are now locking in smaller, localized batch orders as retailers prepare their mid-year stock allocations across Asian department stores and regional e-commerce platforms.

  • C-Beauty Brands Accelerate Global Expansion with State Support, as K-Beauty Shifts Focus

    C-Beauty Brands Accelerate Global Expansion with State Support, as K-Beauty Shifts Focus

    Chinese cosmetics companies are significantly accelerating their global expansion, backed by a thriving domestic market and increasing institutional support from Beijing. This surge sees major C-beauty players establishing a strong presence in international markets, shifting the competitive market for beauty brands in Asia and beyond. This aggressive push comes as South Korean beauty brands, or K-beauty, are experiencing a decline in their long-standing dominance within the Chinese market, prompting them to explore new growth regions.

    Chinese Beauty’s Global Offensive

    Proya, China’s largest cosmetics firm, is making a significant move into the US brick-and-mortar retail sector. Following its initial online sales success, Proya is partnering with Ulta Beauty to introduce two of its skincare lines across approximately 400 stores and Ulta’s online platform starting in November. This expansion is part of Proya’s ambitious “Double-Ten” plan, aiming to become one of the world’s top ten cosmetics companies within the next decade. The company has also bolstered its offline network in Southeast Asia, including a major campaign with Guardian in Kuala Lumpur, and acquired a 51% stake in color cosmetics brand Flower Knows, which already operates in markets such as the US, Japan, South Korea, and Southeast Asia.

    Other Chinese brands are also aggressively pursuing international growth. Florasis is using traditional Chinese aesthetics to enter premium markets in Japan and Europe, initially through online channels like Amazon, Shopee, and Lazada, before moving into upscale physical retail. Judydoll built its international customer base via Shopee and TikTok Shop, then accelerated its offline presence, including entry into about 12,000 FamilyMart stores in Japan, becoming the first Chinese color cosmetics brand in that country’s convenience-store channel. Perfect Diary, under Yatsen Holding, quickly became a leading online cosmetics brand across Southeast Asia via Shopee and has expanded its global platform through acquisitions of European brands Galénic and Eve Lom, with plans for further supply-chain integration and overseas market expansion.

    Domestic Strength and Government Backing

    The robust performance of the Chinese domestic cosmetics market is a key enabler for this international expansion. Chinese companies have developed economies of scale, brand recognition, and product expertise at home, providing a strong foundation for global ventures. Despite a broader economic slowdown, China’s cosmetics retail market showed significant growth, with sales reaching approximately $4.20 billion in July, a 6.8% year-on-year increase. Cumulative sales from January to July rose 6.3% to about $40.16 billion, significantly outpacing overall retail sales growth. This strong momentum has been highlighted by the Ministry of Commerce and the China National Commercial Information Center, classifying cosmetics as a consumption-upgrade product with strong demand.

    The Chinese government is actively supporting the domestic cosmetics industry. The National Medical Products Administration (NMPA) recently issued new regulations aimed at promoting innovation and high-quality development. These changes simplify licensing and registration processes for new products, including exemptions from certain toxicity tests and reduced requirements for submitting product documentation. Companies can now reuse existing test data when shifting production locations and choose their own efficacy assessment methods for certain claims, reducing regulatory hurdles and fostering a more agile environment for product development and market entry.

    K-Beauty’s Strategic Re-evaluation

    As Chinese beauty brands gain momentum, the long-standing influence of K-beauty in China is diminishing. South Korean cosmetics giants like Amorepacific (Sulwhasoo, Laneige, Innisfree) and LG Household & Health Care (The History of Whoo) once thrived on the Korean Wave and demand from Chinese tourists and daigou resellers, with China accounting for 53% of South Korea’s cosmetics exports in 2021. However, boycotts, reduced exposure to Korean pop culture, and the impact of the COVID-19 pandemic on duty-free sales have significantly weakened K-beauty’s position. Chinese domestic brands, bolstered by social media marketing and patriotic consumption, have effectively filled this void.

    This shift has prompted a strategic recalibration for South Korean firms. Amorepacific’s sales in Greater China fell 27% year-on-year in 2024, with its Americas sales surpassing China for the first time. Similarly, LG Household & Health Care’s North American sales surged 47.3% to approximately $147 million in the second quarter, exceeding its China revenue of about $126 million. Both companies are now focusing on profitability in their Chinese operations while diversifying their growth strategies across markets like the United States, Europe, and Japan. RetailNews Asia has observed similar moves by other regional players, as companies seek to de-risk their reliance on single markets and build more resilient global portfolios.

  • K-Beauty Retail Sector in South Korea Undergoes Rapid Transformation

    K-Beauty Retail Sector in South Korea Undergoes Rapid Transformation

    South Korea’s K-beauty retail sector is currently undergoing a swift transformation, moving away from its traditional reliance on heavy discounting towards new and diverse sales channels, including pharmacies. This shift signals a broader evolution in how beauty products are distributed and purchased across the country.

    New Retail Channels Emerge

    The established model of beauty retail, which frequently featured steep price reductions and promotions, is being re-evaluated. Retailers are now exploring alternative strategies to reach consumers and differentiate their offerings. Pharmacies, traditionally not primary points of sale for cosmetic products, are emerging as a significant new frontier for K-beauty brands. This expansion into health-focused retail spaces suggests a potential alignment with consumer demand for efficacious and scientifically backed beauty solutions, or simply a strategic move to increase accessibility and visibility.

    Adapting To Market Dynamics

    The rapid changes in the K-beauty market indicate a need for brands and retailers to adapt quickly to evolving consumer preferences and competitive pressures. By diversifying their sales points beyond conventional beauty stores and online platforms, companies can tap into new customer segments and enhance convenience. This strategic pivot underscores a dynamic retail environment where innovation in distribution is key to maintaining market relevance and growth.

    Questions & Answers

    What is the primary change occurring in South Korea’s K-beauty retail sector?
    The K-beauty retail sector in South Korea is rapidly changing, shifting away from its traditional reliance on heavy discounts and expanding into new sales channels, including pharmacies.

    Which new sales channel is gaining prominence for K-beauty products?
    Pharmacies are emerging as a significant new retail channel for K-beauty brands, indicating a diversification of distribution strategies.

    What does this shift signify for K-beauty retailers and brands?
    This transformation suggests that K-beauty retailers and brands are adapting to evolving consumer preferences and market dynamics by exploring new ways to reach customers and maintain relevance.

  • Olive Young’s K-Beauty Brands Set to Conquer Europe with New Gabona Partnership

    Olive Young’s K-Beauty Brands Set to Conquer Europe with New Gabona Partnership

    Korean cosmetics firm, Olive Young, has recently revealed its collaboration with Poland’s Gabona, aiming to steer its product distribution across Europe. Gabona is now set to manage the distribution network of three of Olive Young’s signature brands: Bioheal Boh, Bringgreen, and Colorgram. Initially, the distribution will be centered in Poland, and then it will gradually expand its reach to other European countries.

    Olive Young has clarified that each brand will still preserve its current market position. This collaboration is a significant move in Olive Young’s overarching strategy to enhance the accessibility of its private brands to consumers beyond Korea. Moreover, it presents Gabona with an opportunity to augment its K-beauty collection in Europe via a well-planned, long-term distribution model.

    In 2025, Olive Young witnessed an unprecedented growth, with the firm’s Q3 sales skyrocketing to as high as US$1.07 billion. The company had earlier revealed that about 88% of the domestic cosmetic purchases under the Global Tax Free (GTF) program, generally done by tourists, were carried out at Olive Young stores in 2025.

    Questions & Answers

    What is the aim of Olive Young’s partnership with Gabona?
    The collaboration aims to facilitate the distribution of Olive Young’s products across Europe, starting with Poland.

    What impact will this partnership have on Olive Young and Gabona?
    This collaboration is a strategic move by Olive Young to enhance the global accessibility of its private brands, and it also allows Gabona to expand its K-beauty collection in Europe.

    What was Olive Young’s performance in the year 2025?
    The company saw record-breaking growth in 2025, with Q3 sales reaching US$1.07 billion.

  • CJ Olive Young & Sephora Join Forces to Propel K-Beauty Brands Globally: A Strategic Expansion in Key Markets

    CJ Olive Young & Sephora Join Forces to Propel K-Beauty Brands Globally: A Strategic Expansion in Key Markets

    CJ Olive Young, a leading beauty retailer in South Korea, has embarked on a significant global partnership with Sephora, an entity of LVMH, to broaden the international presence of Korean beauty brands. Their strategy primarily revolves around leveraging existing retail networks.

    The Launch of K-beauty Zones

    As part of the partnership agreement, Olive Young will curate dedicated Korean beauty (K-beauty) sections on Sephora’s online platforms and within select physical outlets. These areas are set to be launched in the latter half of the current year.

    Initial Rollouts and Future Expansion

    The initial phase of the rollout is anticipated in Singapore, Malaysia, Thailand, Hong Kong, the United States, and Canada. This will then be followed by an expansion into additional markets in the subsequent year, including the United Kingdom, Australia, and the Middle East.

    Strategic Collaboration

    Youngah Lee, Chief Strategy Officer at CJ Olive Young, highlighted the global fascination with K-beauty as a driving force behind the partnership. Lee emphasized that this collaboration is a significant step towards enhancing the international presence of Korean beauty brands in key global markets.

    Olive Young’s Global Aspirations

    This partnership aligns with Olive Young’s larger international ambitions. The company also recently announced its intention to open its first standalone store in Los Angeles, United States, later this year as part of its expansion strategy.

    Questions & Answers

    What is the goal of the partnership between CJ Olive Young and Sephora?
    The partnership aims to expand the international presence of Korean beauty brands by leveraging Sephora’s established retail networks.

    When and where will the initial rollouts of the K-beauty zones take place?
    The initial rollout of the K-beauty zones on Sephora’s online platforms and selected physical stores is planned for the second half of this year in Singapore, Malaysia, Thailand, Hong Kong, the US, and Canada.

    What are Olive Young’s broader international plans?
    Apart from the partnership with Sephora, Olive Young has also announced plans to open its first standalone store in Los Angeles, USA, sometime this year.

  • K-Beauty Powerhouse Lunabella Pioneer European Expansion with Glamorous Paris Flagship Store

    K-Beauty Powerhouse Lunabella Pioneer European Expansion with Glamorous Paris Flagship Store

    The renowned K-beauty brand, Lunabella, has recently established its first flagship in Europe, labelled as W Lunabella, located in the prestigious Le Marais district of Paris.

    The Vision of W Lunabella

    W Lunabella aims to be a one-stop-shop for total beauty solutions. This boutique will offer more than just cosmetics, boasting personalised consultations, styling services, and a select range of curated dresses.

    The founder and CEO of Lunabella, known as Yumi, shared that the ‘W’ in the store’s name is a nod to weddings. This is a testament to her ambition to extend the traditional bridal beauty’s enduring complexion to a wider clientele. Over seven years used to develop the brand were centered around the principle that skin health underpins long-lasting, high-performance makeup.

    The Offerings of the Boutique

    While the boutique will serve as a hub for retail, it also plans to hold cultural and experiential events for customers. These include exhibitions featuring Hanbok (traditional Korean clothing) and beauty workshops, offering customers an immersive experience.

    According to Yumi, “W Lunabella is not just a destination, but it is a sanctuary designed for the modern woman to reconnect with her authentic essence and rediscover her inherent, timeless radiance.”

    Established in 2009, Lunabella has gained popularity for its makeup and skincare range that is designed for extended wear.

    Questions & Answers

    What does the ‘W’ in W Lunabella signify?
    The ‘W’ in W Lunabella signifies ‘wedding’, revealing the founder’s vision to extend the enduring complexion associated with bridal beauty to a broader audience.

    What services does W Lunabella offer?
    W Lunabella offers a comprehensive range of services, including personalised consultations, styling, curated dress services, and high-quality cosmetics. The boutique also hosts cultural and experiential events.

    What is the main emphasis of Lunabella’s products?
    Lunabella essentially focuses on the significance of skin health, which is the foundation for durable, high-performance makeup. The brand is known for its extended-wear makeup and skincare range.

  • K-Beauty Powerhouse Lunabella Debuts in Europe with Glamorous Flagship Store in Paris

    K-Beauty Powerhouse Lunabella Debuts in Europe with Glamorous Flagship Store in Paris

    Korean beauty brand Lunabella has launched its inaugural European flagship store, W Lunabella, in Paris’ Le Marais district. This boutique is slated to be a comprehensive beauty solution center, offering not only cosmetics, but also bespoke consultations, styling, and curated dressing services.

    The Vision Behind the Store

    The company’s Founder and CEO Yumi has revealed that the ‘W’ in the store’s label signifies ‘wedding’. This is in line with her ambition to extend the long-lasting complexion usually associated with bridal beauty to a wider market. Yumi has spent seven years designing the brand, with a strong emphasis on skin health as the key foundation for resilient, effective makeup.

    Beyond Retail

    The Paris store is set to host cultural and experiential events in addition to its retail offerings. These will include Hanbok exhibitions and beauty workshops. Yumi describes W Lunabella as more than just a shopping destination. She envisions it as a haven designed for today’s woman to reestablish connection with her innate essence and rediscover her inherent, ageless radiance.

    Lunabella, established in 2009, is renowned for its makeup and skincare range designed for prolonged wear.

    Questions & Answers

    What does the ‘W’ in W Lunabella stand for?
    The ‘W’ represents ‘wedding’, symbolizing the company’s aim to bring the enduring complexion typically associated with bridal beauty to a broader clientele.

    What additional services will the W Lunabella store provide besides retail?
    Apart from retail, the store plans to host a range of cultural and experiential events such as Hanbok exhibitions and beauty workshops.

    What is Lunabella best known for?
    Lunabella is most recognized for its makeup and skincare products designed for extended wear.

  • K-Beauty Boom: CJ Olive Young Records Massive Surge in Tourist Spending

    K-Beauty Boom: CJ Olive Young Records Massive Surge in Tourist Spending

    CJ Olive Young, a South Korean retailer, has experienced a significant surge in sales from international patrons at its physical locations throughout the country. According to the company, between January and November, foreign visitors contributed to a staggering 1 trillion won (about US$680 million) in sales. This represents a twenty-six-fold jump compared to the previous year.

    Sales Figures Show Increasing Global Interest

    The company’s data reveals that sales to international customers, which accounted for roughly 2% of overall offline revenue in 2022, increased to approximately 10% in 2023. This year, these sales have exceeded 25%, demonstrating CJ Olive Young’s mounting allure to worldwide shoppers.

    The spokesperson for CJ Olive Young expressed the significance of achieving 1 trillion won in sales from international visitors. The spokesperson highlighted that it represents a collective accomplishment, achieved in partnership with small, medium-sized, and indie brands that have engaged with customers globally through CJ Olive Young.

    The company expressed its dedication to ensuring that K-beauty, or Korean beauty, is more than just a trend. They see it as a compelling reason for repeat visits to Korea and an integral component of the country’s domestic inbound tourism.

    High Patronage Under the Global Tax-Free Program

    The retailer further revealed that under the Global Tax-Free (GTF) program, a staggering 88% of domestic cosmetic purchases were made at CJ Olive Young outlets. This figure indicates that nearly nine out of every ten foreign shoppers prefer the chain. Moreover, tax refunds were claimed by visitors from 190 distinct nationalities at the retailer’s locations.

    The retailer also noted an increasing trend of foreign customers visiting multiple stores. Around 40% of these shoppers reportedly explore two or more locations to experience varying store layouts and curated product selections.

    Consumers Diversifying Their Purchases

    In addition to visiting multiple locations, international shoppers have also shown a growing interest in diversifying their purchases. According to company data, 58% of foreign shoppers buy products from six or more brands, and 33% make purchases from ten or more brands. This trend points towards a growing interest in a broad range of K-beauty products.

    Questions & Answers

    How much has CJ Olive Young’s sales to international customers increased?
    Sales from international customers have seen a twenty-six-fold increase compared to the previous year, with foreign visitors contributing to a staggering 1 trillion won (about US$680 million) in sales between January and November.

    What proportion of domestic cosmetic purchases under the GTF program were made at CJ Olive Young outlets?
    Under the Global Tax-Free (GTF) program, a substantial 88% of domestic cosmetic purchases were made at CJ Olive Young outlets.

    What shopping trends among foreign customers have been noted by CJ Olive Young?
    Foreign customers are increasingly visiting multiple store locations and diversifying their purchases. Around 58% buy from six or more brands, and 33% buy from ten or more brands, demonstrating a growing interest in a broad range of K-beauty products.

  • K-Beauty Powerhouse CJ Olive Young Breaks into US Market with First Store in California

    K-Beauty Powerhouse CJ Olive Young Breaks into US Market with First Store in California

    South Korean retailer CJ Olive Young has announced plans to expand into the North American market with the opening of its inaugural store in Pasadena, California, scheduled for May. This move signifies a calculated venture of K-beauty brands into the global market.

    A Showcase of K-beauty Brands

    The upcoming store, branded as a ‘K-Beauty Showcase,’ will offer an extensive collection of globally recognized K-beauty and skincare brands, as well as the latest in beauty and wellness trends. Additionally, the store will provide a selection of experiential services for customers.

    The company has been focusing its expansion efforts on premier fashion and beauty regions, a tactic that aims to appeal to the MZ generation. Pasadena fits this strategy, located approximately 18km northeast of downtown Los Angeles. It is known for attracting a substantial number of local, trend-conscious, high-income individuals.

    More Than Just A Store

    According to CJ Olive Young, their US debut has a significance that extends beyond merely opening an international store. The company’s overarching aim is to bolster the global competitiveness of the K-beauty industry via a ‘joint platform’ with CJ Olive Young. This strategic move will facilitate a direct link between local American consumers and burgeoning Korean beauty brands, ultimately fostering a synergy between online and offline shopping experiences.

    An Olive Young representative stated that the company plans to contribute to the sustainable globalization of the K-beauty industry. This will be achieved by spreading the growing interest in K-beauty worldwide to a more global consumer base, becoming a local hub for a diverse array of brands to expand overseas. The product selection will be thoughtfully curated to meet the preferences of its North American customers.

    Their ultimate goal is to transform CJ Olive Young into a global platform for beauty and wellness distribution, encompassing a wide range of brands from Korea and overseas.

    Future Expansion Plans

    Olive Young perceives the US as the world’s largest and most competitive beauty market, home to renowned retailers such as Sephora and Ulta Beauty. This strategic expansion aligns with the company’s announcement in February to set up additional stores in California by next year, including locations within Los Angeles Westfield shopping centers.

    Questions & Answers

    What is the significance of CJ Olive Young’s expansion into the US market?
    The expansion is not just about opening a store in a foreign market, but about promoting the global competitiveness of the K-beauty industry. The company aims to connect local American consumers directly with emerging Korean beauty brands.

    What kind of products will the new CJ Olive Young store offer?
    The store will offer an extensive collection of K-beauty and global skincare brands, as well as the latest beauty and wellness trends.

    What is Olive Young’s ultimate goal from this expansion?
    Olive Young aims to evolve into a global platform for beauty and wellness distribution, offering a diverse range of brands from Korea and overseas. They also plan to open additional stores in California by next year.

  • K-Beauty Sector Bounces Back with $4.9M Funding Boost for Early 2025 Growth

    K-Beauty Sector Bounces Back with $4.9M Funding Boost for Early 2025 Growth

    The K-Beauty industry is experiencing a notable resurgence, with startups raising an impressive $4.9 million in funding during the first four months of 2025, as reported by Tracxn. This revival can largely be credited to the sector’s renowned high-quality products that boast innovative ingredients and unique formulations, all further fueled by the global phenomenon of Korean pop culture—think K-pop, K-dramas, and the vibrant realm of social media.

    In its glory days, the K-Beauty sector peaked in funding during 2016 and 2018, amassing $186 million and $148 million, respectively. However, last year marked a significant downturn; the sector hit rock bottom in 2024 with a meager $975,000 raised—the lowest in a decade and a staggering 90% decrease from the previous year. Notwithstanding this dip, the cumulative funding across 74 startups has reached a robust $453 million.

    South Korea reigns supreme in the K-Beauty market, having secured $250 million in funding, followed closely by the United States with $199 million, and India trailing with $4 million. Remarkably, over 55% of global K-Beauty investments have been funneled into South Korean enterprises.

    The last couple of years has been characterized by early-stage funding, with all financing in 2022, 2023, and so far in 2025 originating from this stage. Early-stage rounds have accounted for nearly 28% of total sector investments over the past five years. In contrast, late-stage funding, which once comprised 69% of the market, has gone dormant since 2019.

    Seed-stage deals have managed to raise $15.3 million so far, although 2024 was a slow year that only saw $957,000 in seed funding, and this year has yet to witness any new seed-stage deals. On the funding leaderboard, Memebox stands tall at $193 million, followed by GP Club with $67.5 million and Clio Professional with $50.1 million. In the funding categories, color cosmetics lead the charge with $245 million, followed by multi-category brands at $77 million, and skincare at $46.5 million.

    Mergers and acquisitions continue to shake up the market, with Klpartners’ $129 million acquisition of Manyo earlier this year and LG Household & Healthcare snatching up The Crème Shop in 2022 for $120 million. Notably, GP Club and Mediheal have both reached unicorn status, while APR emerged as the sole K-Beauty IPO in 2024.

    Prominent investors in the sector, such as Goodwater Capital, Pear VC, and Altos Ventures, have significantly influenced funding dynamics. The past two years have seen seed-stage activity driven primarily by 500 Global, Barlon Capital, and Blueprint, while early-stage rounds have been dominated by khfamily.kr, Company K Partners, and Smile Gate Investment.

    Could this be the comeback story of the year for K-Beauty? Grab your favorite face mask and stay tuned!

    Questions & Answers

    What was the total funding raised by the K-Beauty sector?
    The K-Beauty sector has amassed a total of $453 million across 74 startups.

    Which countries are leading in K-Beauty funding?
    South Korea leads with $250 million, followed by the U.S. at $199 million, and India at $4 million.

    What is the main type of funding seen in the K-Beauty sector recently?
    All funding for 2022, 2023, and the beginning of 2025 has come from early-stage rounds, making up nearly 28% of total investments in the last five years.

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  • Pandemic batters South Korea’s K-beauty shop

    Pandemic batters South Korea’s K-beauty shop

    Three years ago, Suh Kyung-bae was the second-richest person in South Korea. Today he’s barely Top 10, a stark reversal in a K-beauty boom known for minting billionaires, not breaking them.

    Suh’s $3.6 billion fortune, down from roughly $8 billion in 2017, is largely comprised of shares in his family’s cosmetics conglomerate, Amorepacific Group, which have fallen more than 40% from a mid-January high. The parent of brands like Innisfree, Laniege and Sulwhasoo, Amorepacific was struggling even before covid-19, and the pandemic has ushered in a slew of lifestyle changes that have made cosmetics less central to women’s daily routines.

    That’s brought a halt to the wealth created by the rapid rise in popularity of Korean beauty products and the deal-making frenzy that followed. From 2010 to 2014, foreign companies spent at least $215 million to acquire cosmetics firms there, according to a September report by Samjong KPMG. In the five years that followed, the country became the world’s fourth-largest exporter of beauty products, and the deal volume ballooned to $5 billion, not including transactions for undisclosed sums.

    Estee Lauder Cos. made Have & Be Co., widely known for its Dr. Jart+ line, its first acquisition of an Asian beauty brand in November 2019. That deal, worth $1.1 billion, turned founder ChinWook Lee into a billionaire. Goldman Sachs Group Inc. bought a minority stake in GP Club Co., best known for face masks, making founder Kim Jung-woong one of the country’s richest people. Unilever Plc, L’Oreal SA and other multinational companies also got stakes in Korean cosmetics firms, creating massive windfalls for their founders.

    But the pandemic has taken a double hit on K-beauty. Social distancing and remote work have lessened demand for makeup and led to store closures. For Korea, coronavirus travel restrictions have also cut off the flow of big-spending Chinese tourists and individual merchants who buy tax-free goods in bulk and sell them back home. Meanwhile, China’s customers have more access to global brands and are increasingly interested in products made locally.

    “Now it’s naive to think that cosmetic products with made-in-Korea tags would simply win over Chinese customers,” said Lina Oh, a Seoul-based analyst at Ebest Investment & Securities Co.

    Neither Have & Be nor GP Club have released financial information for 2020; GP Club’s plan for an initial public offering in 2019 hasn’t been rescheduled.

    For Amorepacific, consolidated revenue for the first nine months of the year fell 23% to 3.7 trillion won ($3.4 billion) from the same period in 2019, according to a company filing. For the first time in its history, the group announced last month a plan to offer voluntary retirement targeting employees who have worked for more than 15 years. The company declined to comment on its plans or on Suh’s personal fortune.

    At the same time, the pandemic has accelerated the shift to online in the beauty industry. Amorepacific’s revenue for the segment has seen substantial growth, pushing it to prioritize that part of the business. Cosmetics giant L’Oreal, whose sales dropped 12% in the first half of 2020, launched 300 digital services this year, including live beauty tutorials.

    Amorepacific plans to reduce the number of Innisfree stores in China but anticipates that overall, digital sales will make up half its business there next year, according to Yuanta Securities Korea. In the domestic market, the company sees the share of online revenue growing to 30% from 20%.

    “Spending on cosmetics was already down before Covid,” said Hye-mi Kim, an analyst at Cape Investment & Securities Co. in Seoul. “Covid made it even less necessary. Only must-have items like skincare products or those for facial problems are doing okay.”

    Meanwhile, South Korea has new billionaires rising, like Seo Jung-jin, founder of pharmaceutical firm Celltrion Inc., which is developing a Covid-19 antibody treatment. Seo’s wealth has almost tripled this year to $14.6 billion, making him the country’s new second-richest man.

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  • K-beauty companies fined for Instagram promotions

    K-beauty companies fined for Instagram promotions

    Several major K-beauty companies were found guilty of misinforming consumers after paying influencers on social networks like Instagram to promote their products.

    South Korea’s Fair Trade Commission (FTC) ordered seven companies including AmorePacific, LG Household and Health Care and L’Oreal Korea to pay 269 million won (US$228,740) in fines.

    The K-beauty companies paid influencers on social media 1.1 billion won (US$936,000) in cash and products in exchange for promoting their products on Instagram. They gave the influencers specific instructions on what hashtags to use as well as the angles for photoshoots.

    However, as many as 4177 sponsored posts went on Instagram without any information about the sponsorship arrangement.

    The FTC obligates companies to disclose all information on recommendations, guaranties, and others that contain economic interest that may impact the level of trust.

    The commission says it plans to revise current instructions to reflect today’s practices on social networks and include provisions that clearly inform consumers on whether a post is sponsored.

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  • K-beauty brands vow to defend against Sephora South Korea onslaught

    K-beauty brands vow to defend against Sephora South Korea onslaught

    South Korea’s big-name beauty retailers are prepared to defend their market share from the launch of Sephora South Korea, which debuts this week.

    The first Sephora South Korea store will open in Parnas Mall in the upscale district of Gangnam in southern Seoul this Thursday, the company said. Spread across 547sqft, the store will feature hundreds of cosmetics, skincare, body and fragrance brands, along with its own private-label range.

    Sephora, part of the French luxury goods conglomerate LVMH Group, has nearly 3000 stores worldwide. The company has begun an aggressive expansion program in Asia, opening stores in Hong Kong, Singapore, Thailand and India.

    Sephora South Korea plans to open six stores and an official online store by the end of next year, along with 13 more nationwide by 2022.

    Sephora’s inroads come as the country is already full of Sephora-like stores, which are mostly operated by the country’s major conglomerates.

    Sales of beauty and drug products in the country came to US$4.74 billion last year, according to data compiled by Euromonitor International.

    Olive Young, run by retail conglomerate CJ Group, is considered a market leader with nearly 1100 outlets across the country. The stores feature hundreds of budget- and mid-range beauty-and-lifestyle products.

    Local retail giant Shinsegae also launched its first multi-brand beauty shop Chicor inside one of its department stores in December 2016, which houses not only luxury brands but also bargain cosmetics.

    The company currently has 22 such stores across the country and a flagship in Gangnam.

    The outlets also have a place where customers can try out makeup products for free and issues a credit card that offers discounts and other perks.

    “We were able to secure not only loyal but also potential customers by issuing a credit card that offers benefits, especially for those in their 20s and 30s who are hugely interested in beauty products and makeup,” said Lee Sung-hwan, a Shinsegae official.

    The company says it has issued 90,000 Chicor credits cards in about a year.

    Lotte Shopping Co, South Korea’s No. 2 retailer, also operates the drugstore LOHB, which sells mainly medical cosmetics. That chain opened a concept store in the Gangnam district last month that mainly targets customers in their 20s.

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  • Korean wave fuel 25% growth in Korean e-commerce exports

    Korean wave fuel 25% growth in Korean e-commerce exports

    South Korea’s online exports surged 25 percent in 2018 from a year ago on the back of growing demand for K-beauty and K-pop related items such as album records and stationery supplies, government data showed. According to Korea Customs Service, Korea’s electronic commerce (e-commerce) exports or reverse overseas direct purchase volume reached US$3.25 billion last year, up 25 percent from a year earlier. The total number of online export cases also jumped 36 percent to 9.61 million during the same period.

    E-commerce growth is staggering when compared to the modest 5 percent annual growth in total Korean exports last year.

    The customs agency said that the rapid growth of online exports comes amid growing demand for Korean items on the back of hallyu or Korean Wave, as well as simplified retail procedure, and aggressive overseas marketing integrated with offline stores.

    By item, apparels and cosmetics accounted for 69 percent of total online export. In particular, the number of export cases for clothing surged a whopping 162 percent last year from a year ago, becoming the top pick after beating out cosmetics. Online exports of cosmetics jumped 43 percent last year from a year ago, recovering to average level after falling in 2017 as a result of diplomatic tension between Korea and China over Seoul’s deployment of U.S. anti-missile system.

    The customs agency said that exports of K-pop related items such as albums and stationery items surged significantly last year amid hallyu or Korean Wave overseas. In particular, sales of items related to K-pop icon BTS rose sharply.

    Data from Korea Customs Service, meanwhile, showed that overseas direct purchases of foreign goods amounted to US$2.75 billion last year, up 31 percent from a year ago. There were a total 32.25 million purchases last year, up 37 percent from a year ago.

    By region, the United States accounted for the largest 50.5 percent of Koreans’ direct purchases, followed by China with 26.2 percent, European Union with 12.5 percent, and Japan with 8 percent. The U.S. share fell from the previous year’s 56.4 percent while that of China jumped almost 10 percentage points from the previous year’s 17.3 percent.