Korean beauty brands continue to gain traction in the U.S.

2024.05.14 08:41:01 | 2024.05.14 08:43:37

[Courtesy of Kolmar Korea]이미지 확대

[Courtesy of Kolmar Korea]

South Korean beauty products, including skincare items, are continuing to gain popularity in the United States.

Previously targeting young American consumers in their teens and 20s who wanted to use the same cosmetics as K-pop singers or Korean actors, K-beauty is now captivating a broader spectrum of U.S. consumers thanks to its product quality.

It is not only major conglomerates that are the driving force behind the K-beauty trend, but small and medium-sized enterprises such as The Skin Factory as well. According to a report on SME export trends for 2023 released by the Ministry of SMEs and Startups in January 2024, the export value of cosmetics from SMEs last year totaled $5.4 billion, up 20.2 percent from the previous year, hit a new annual record, and was the top export item.

The export value of cosmetics from Korean SMEs to the U.S. market in particular increased by 47.2 percent to $930 million in 2023, as the market perceives K-beauty as offering differentiated products, according to industry insiders.

K-beauty’s popularity, which highlights its distinctiveness, was reaffirmed when the families of the Major League Baseball team who visited Seoul for the MLB World Tour Seoul Series in March 2024 visited Olive Young stores in Seoul.

Small and independent brands account for about 80 percent of the brands handled by Olive Young, a multi-beauty brand shop affiliated with CJ Group.

Original development manufacturers (ODMs) such as Kolmar Korea Co. and Cosmax Inc. are behind the success of Korea independent brands in overseas markets. Most small cosmetics brands, such as independent brands, do not have their own production facilities so they usually collaborate with ODM companies to launch products.

Kolmar Korea entered the U.S. market by acquiring U.S. cosmetics ODM company Process Technology & Packaging Co. (PTP) in October 2016. Kolmar Korea, the company that was originally behind Kolmar, acquired Kolmar’s global trademark rights and became the owner of the Kolmar brand in 2022, 32 years after its founding.

[Graphics by Song Ji-yoon and Lee Eun-joo]이미지 확대

[Graphics by Song Ji-yoon and Lee Eun-joo]

Kolmar USA, the parent company of Kolmar Group, was established in Milwaukee, Wisconsin, in 1921. By acquiring the trademark rights, Kolmar Korea can use the Kolmar brand, which is recognized locally, to accelerate its market expansion in the United States.

Thanks to the success of independent brands and active efforts to target the North American market, Kolmar Korea’s performance in North America is also soaring. Kolmar Korea’s sales in the North American market, which were 64.7 billion won ($47.4 million) in 2021, increased by 30 percent to 83.9 billion won in 2023.

Cosmax also entered the market by forming its U.S. subsidiary, Cosmax USA, in 2013. It plans to respond to the demand from the U.S. market via OTC Lab, its organization dedicated to functional over-the-counter general drugs with UV-blocking capabilities within its domestic research institute, which opened in 2023.

“We plan to expand our business in the United States’ West Coast and ramp up our operations by opening an office in California starting in July 2024 to expand indie brand sales,” Cosmax said.

By Lee Sae-bom and Lee Eun-joo

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