Five reasons why Korean cosmetics win the world!
South Korea's exports of cosmetics in 2017 were 3.92 billion US dollars worth — 3.3 times the amount of its imports. How did K-Beauty succeed in capturing so many markets worldwide? Some causes include the economic climate in the country that enabled start-ups to spawn in large numbers and the nature of their plans that focus on global expansion right from the beginning.
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Korean trademarks are bought by global companies
L' Oréal purchased Nanda Co. Ltd., the Korean firm that manages brands including Stylenanda and 3CE, in May of this year. It was something that aroused our eyes in the business, since the largest cosmetic firm in the world had absorbed K-Beauty as a subsidiary.
But L'Oréal is not the first big foreign brand in beauty in Korea to devote such attention. Parfums Christian Dior has purchased Carver Korea of AHC for $2.6 billion, alongside Korea's leading cosmetic firm, Amore Pacific, and Unilever. It seems that many foreign companies are focused on the strongest brands of K-Beauty.
Korean cosmetics has a host of attractions: trendy, Instagram-friendly box design, inexpensive wallets for teens, and established representative goods such as BB cream and basic sponges. The intriguing world of K-Beauty has numerous dimensions; including being worn by Kate Moss when she promotes BB Creams.
In conclusion, the K-Beauty path to such importance on the world scene was shaped by the unique climate and culture of the country, which allowed start-ups to materialize quickly and growth via strong internal rivalry. In particular, we have condensed down the arguments to the following four points.
1. Enterprise facility
Many OEM producers and companies in South Korea are able to make cosmetics with small lots and give support till the licence is granted. It is an atmosphere in which ideas may be instantly shaped, even without huge money and expertise on how cosmetics are produced. In fact, so many companies came into being in this way, leading to heavy rivalry and an increase in quality across the sector.
Another element is how to make decisions and processes, resulting in concepts that eventually reach the manufacturing line, reasonably rapidly. This enables a strategy of developing new goods first fast, receiving real world feedback before implementing corrections in the event of problems that, in turn, stimulate the growth of technology and quality.
Many start-ups choose to start their companies with face masks, because they are the cheapest to produce — even if a student starts to produce his own face masks within several months, he may do it with only US$2,600.
One major aspect, of course, is how e-commerce has made it possible for businesses to expand without the enormous expenditures needed to start brick and mortar stores. The Korean Cosmetics industry is now worth a stagerring 43.8 billion (according to Bloomberg)
2. Competent digital marketing
Young entrepreneurs with a great deal of knowledge in digital marketing use social media for their companies. You have gotten competent to produce video commercials that will enable you to watch to the end and share them with micro-influencers to quadruple sales in one day or perhaps a million views in a week. In the Korean start-up world, such action is not uncommon.
When these tactics are used, they acquire more powerful impact on events to advertise their products, establish pop-up shops in department stores and maybe create a flagship store. They also become more recognized and retailers. These are typical instances of K-digital Beauty's and knowledgeable route.
3. A solid domestic platform
Like in many nations, South Korea's mainstream video-advertising platforms include, but also include YouTube, Facebook and Instagram. This is the largest gateway in South Korea where at least 30 million of the total 50 million inhabitants visit the amazing portal once a day.
Users publish blogs on the web and most Koreans receive their daily information from them. Many of these blogged cosmetics businesses and afterwards placed on NAVER's main page saw a significant increase in fame and distribution.
4. Government of Korea support
South Korean supports the worldwide plans of cosmetical firms by assisting them export to nations and areas where markets are tough to access, also to preserve their powerhouse status in the cosmetics industry. For instance, cosmetics supplied to Iran, as well known, that fulfill Korean domestic requirements can be marketed without re-inspection at once under a Memorandum of Understanding (MoU) with Iran during the former Park Geun-hye government.
The Korean Pop culture and fashion have received such worldwide support, pushed by the all-powerful surge in K-Pop throughout the world, is one of the further factors favoring the korean cosmetics business.
5. K pop!
BTS is a seven-member boy band in South Korea that started training in 2010 and debuted under Big Hit Entertainment in 2013. BTS is also known as the Bangtan Boys. The Sept – made up of Jin, Suga, J-Hope, RM, Jimin, V and Jungkook – has a lot of their own production in writing and co-produced. A hip hop ensemble originally grew into a wide range of genres in their musical styles. Their works, typically centered on personal and social commentaries, touch on the topics of mental health, school-age and juvenile disorders, loss, the path to love and individualism. The book combines literature and psychological references and an alternate history of the cosmos. The group recorded a number of albums and toured worldwide.
The relatively small population of South Korea, despite the aggressive international development of Korean start-ups, implies that the home market in cosmetics can only grow so much. Some firms have been planning to sell abroad since the outset. They ensure that they comply with the regulations of their target nations with the ingredients used in their products.
While the product could not do well at first on the local front, it can sell well abroad, and the new reputation reboots again in the domestic market. Because the reputation of Korean cosmetics for durability has become thus great, even dark cosmetics have a great potential for doing well outside. Tell Korean cosmetic firms to catch the winds of change quickly and manage their company accordingly.