A recent Washington Post article valued the Korean beauty market at $10 billion. Within South Korea, Mintel data pegs the country as one of the fastest growing markets for beauty and personal care markets, achieving nearly 6% growth in one year—which is astounding in comparison to runners up U.S. (3.9%) and UK (2.1%). Euromonitor placed the total value of skin care sales and color cosmetics in South Korea at $6.2 billion in 2014.
Competition for the attention of beauty consumers within the key Asian markets of China, Hong Kong, Taiwan and Singapore is fierce. The target market is young women aged 18-29, according to Nielsen Hong Kong, with Korean TV series and K-Pop culture serving as primary beauty trend drivers.
Jeff Lim, director of customer service for Korea-based packaging supplier, Hana Co., Ltd., says high-definition television and smartphone technologies have pulled back the proverbial curtain on TV actresses, showing their skin and all of its imperfections, thus heightening the demand for flawless skin. “Korean beauty products introduced by Korean dramas, [have gotten] Asian women interested in Korean beauty products,” he says.
With an eye on the skin care segment, Hana’s latest packaging innovation is a dual airless pump for sensitive skin care formulations, such as “booster” creams and dark spot correctors – both integral products in a Korean woman’s multi-step beauty regimen. The company also manufactures a dual airtight compact that can pair a similarly delicate wrinkle care ampoule and foundation in one compact, portable case. Hana also recently partnered with Intercos to offer customized packaging development services for cosmetic and personal care clients.
The export of beauty products has become one of South Korea’s most lucrative businesses. A recent article published in the Korean Herald cited data from the Korea International Trade Association (KITA) indicating that South Korean cosmetic exports to China more than tripled in the first seven months of last year, to rank second in the Chinese market, thanks to rising pop culture popularity.
“China imported $378.3 million worth of South Korean cosmetics in the January-July period, up a whopping 250.6 percent from 2014,” the article reported. “The amount accounted for 22.1 percent of China’s total cosmetics imports valued at $1.67 billion during the period, already surpassing last year’s $214.9 million.”
South Korea, which took fourth place in 2014, stood right behind France, the leader in the global beauty market with a 30.6% market share with $512 million sales in China. Japan slipped one notch to third with $265.3 million, and the United States came next with $194 million, KITA said.
Last fall, Bloomberg News cited a report from the Export-Import Bank of Korea that pointed to South Korea’s cosmetic boom as resuscitating the country’s prolonged drop in exports. The phenomenon’s exponential popularity among U.S. consumers was helped by KITA. A nonprofit group, KITA introduces small-to-medium-size Korean companies to American retailers and distributors, and also coaches brands on how to package and price products to appeal to U.S. consumers.
Adopting New Influences
Increased interest among global beauty consumers in these exotic imports has led a number of global brands to incorporate distinctly Korean products into their product lineups.
Beauty powerhouses like Chanel, Lancôme and L’Oréal have launched their own cushion compact foundations. Stila took the concept in a unique direction, with the launch of its Got Inked Cushion Eye Liner. Revlon even got in on the K-pop staple of “just bitten” lips – a gradient look where the middle of the lips are darker than the outer regions of the lips—with the launch of its Just Bitten Kissable Balm Stain line.
Curt Altmann, marketing director, Yonwoo International/PKG, New York, says the Korean beauty influence continues to gain favor with U.S. consumers, not only presenting new brand and product opportunities but also ushering in a shift surrounding the attitudes toward personal care. “Western consumers are really taking notice of the commitment to a skin care regimen that Korean women have,” he says. “For many Korean women the nightly skin care routine is not viewed as a chore but something they look forward to.”
Earlier this year, Yonwoo produced a 40ml airless spray tube for Korea-based Benton Cosmetics’ Honest TT Mist, a fine mist moisturizer that contains Melaleuca Alternifolia (Tea Tree) leaf water instead of water, as well as hyaluronic acid and other beauty ingredients to help improve rough and damaged skin from stress and pollution with moisturizing and cooling effects.
“Four years of intense development have yielded a truly dry, fine, misty spray in a convenient and cost-effective packaging form to give marketers a meaningful consumer experience,” says James Ki, president of Yonwoo.
“The fine mist allows Honest TT to be used over makeup,” says Celeste Jo, director of marketing at Benton, “and the airless tube keeps the formula from oxidizing, maintaining the potency of the Tea Tree compounds without chemical preservatives.”
Altmann says beauty marketers who are looking to the Korea phenomenon with interest are responding to the sheer size of the market for such a small population, but he cautions that they shouldn’t overlook the volume of product as well as the speed to market and high product segmentation. The fact is, he says, there is little or no brand loyalty in the Korean market. “Certainly not as much as in the West,” he says. “In Western marketing we promote a product that is the answer to a problem; in Korea, consumers see not one product as an answer, but a contribution as part of many.”
Michelle Joo, vice president, Elcos America Inc., Englewood Cliffs, NJ, offered a glimpse into three distinctly Korean trends positioned to resonate with global consumers: “Ki-dult” cosmetics, personalized/customizable product packaging, and packaging that emphasizes formulation contents.
To be clear, even though products in the Ki-dult realm are emblazoned with images of Wonder Woman and other cute, animated characters, the products are not intended for children. These are high-quality products with a whimsical edge that particularly appeal to collectors. “The selected designs are well-known and familiar characters from childhood movies and animation,” Joo says. “Ki-dult market trends have…consistent growth of 2-30 percent each year [and the designs] help to bolster the image of the brand.”
Beauty customization comes to the forefront with personalized/customized packaging. “Color is so important in choosing the right makeup because we all have different skin tones,” Joo says, using the traditionally limited color palette of BB creams as an example. “Because of the lack of choices, consumers have to mix two different colored products to match their skin color.”
Joo says Lalavesi’s Leo Pop employs a refillable “Dual Pact” and with the push of a button, BB and CC creams, revealed from underneath the palette, can be easily mixed to match any skin tone.
Similarly, the packaging for Jungsaemmool’s Star-Cealer Foundation features a push-able bar on the left side of the product next to the concealer. The palette in the middle is skin-toned and customers can mix a custom combination of foundation and concealer to make their skin evenly toned. The Kim Hwallan Musee Neuf 3D Palette capitalizes on the contouring trend, enabling consumers to mix up to three colors to shade and highlight their complexion.
Korean beauty companies are getting creative with packaging to emphasize their product attributes. “Newly developed packaging is designed to show…the content of the products so it easily grabs customers’ attention and provides better understanding of products’ contents,” Joo says, pointing to TonyMoly’s Peach Hand Cream, Mango Mild Sunblock and Banana Sleeping Pack and Nature Republic’s California Aloe Vera Hand Cream as standout examples of this trend.
Korean beauty trends have made substantial inroads into the European and U.S. beauty landscapes. Given the continued enthusiasm for Korean products and ingredients, it will be exciting to watch how the Korean aesthetic will continue to influence the global beauty marketplace.
For more than 70 years, AmorePacific, South Korea’s top cosmetics company, has drawn from Asian wisdom and ingredients to enhance health and beauty of women around the world.
As the brand behind the cushion compacts and beauty masks synonymous with the Korean beauty trend, the company is eager to continue expanding its distinctive beauty focus.
In fact, according to a September NIKKEI Asian Review, AmorePacific plans to grow its business to become Asia’s number one cosmetics maker, with a sales target of $8.2 billion by 2020. The company is also working to increase its worldwide sales from 20% percent to 50%.
In an interview with Beauty Packaging, Eunim Lee, senior vice president of Hera div., AmorePacific, says the company’s products and packaging embody a vitality and harmony that’s unique to Asian beauty.
“Through our products, we strive to capture the vitality of nature and offer Asian Beauty which prioritizes harmony of internal and external beauty,” she says. “Within the same vein, our packaging focuses on giving back to nature through consistent sustainability efforts.”
When asked why she though Korean-origin beauty products such as cushion compacts, sheet masks and cleansing oils have become so popular with global beauty consumers, Lee says one answer could be Koreans’ commitment to innovation. “The kind of innovation that AmorePacific pursues is innovating beauty for our customers, rather than simply pursuing the next best technology or speed,” she says.
In terms of the beauty trends to come, Lee says this year Hera will focus on the beauty associated with “Seoulistas” – the iconically poised, passionate and beautiful women of Seoul, Korea, who are characterized by glowing skin, made possible with light textured and hydrating cushion products and CC creams.
“The confident women who lead dynamic lives, often (trend-leading) Seoul women, not only go for perfecting beige, nude tones but are not afraid to use passionate colors such as pink, orange, and red for their lips,” Lee says. “Another trend in line with this is understated, yet distinct eye-makeup which emphasizes their eye shape.”
Marrying the right formula with the right packaging componentry is critical, according to Lee, who points to the effort AmorePacific put into its iconic cushion products.
“After developing the right type of sponge to soak in the liquid foundation, the next challenge was finding the right container,” she says. “Thinking from busy, modern women’s perspective, who need a simple, convenient way of reapplying makeup, AmorePacific developed an all-in-one, airtight compact which maintained the moistness of the sponge and the stamp form with the cap and body that didn’t separate.”
Packaging is at the forefront of AmorePacific’s long-term corporate goals. In addition to its aforementioned goals, AmorePacific also hopes to achieve greater sustainability by 2020, with a 25% reduction in package use per product.
“AmorePacific has consistently strived to minimize the negative impact on the environment through sustainable packaging,” comments Lee. “We believe these efforts will enable us to become a global beauty creator that provides high-quality products created from the best raw materials while contributing to the environment and local communities.”
Juxtaposed with Korea’s social conservativism is an emerging trend among male consumers that indicates appearance is more than just skin deep.
More than 10% of Korean beauty product sales (about $1.5 billion) are driven by a relatively new niche segment—men’s beauty—and it’s helping to diversify and drive sales in a market saturated with products positioned for women.
Kang Jae-joon, head of equity research in Korea at the investment manager Franklin Templeton, recently told The Washington Post that “the men’s market has been growing at about 9 percent each year for the past four years.”
Euromonitor data indicates that South Korean men are the top per-capita consumers of skin care products in the world, with four times the purchases of runner-up Denmark.
And demand isn’t just limited to traditional products such as aftershave; men increasingly want anti-aging skin care products like toners, essences and lotions.
The Post also affirmed that, like women, Korean men are embracing makeup as a way to perfect and enhance their natural attributes. From pencil kits to fill in and define their eyebrows to sunscreen-rich BB creams, Korean men are embracing their inner metrosexual because culturally speaking, appearance is everything.
Kim Jin-ho, who runs IOPE, a high-end skin care line owned by AmorePacific, recently told The Economist that its Air Cushion, a sponge soaked with sunscreen and tinted moisturizer and encased in a trendy metallized compact, has become an “essential” product for fashion- forward men. IOPE sells more than 100,000 of the compacts a year—almost three times as many as it sells of its regular sunscreen products for men.
Innisfree, another brand owned by AmorePacific, markets Extreme Power Military Masks, sheets soaked with treatment gels for the face.
Further, The Economist reported that one survey found South Korean men use 13 grooming products on average a month, almost half the number that their female peers use (South Korean women follow multi-step skin care routines, involving cleansers, essences and ampoules); and that almost all major South Korean brands have men’s lines.