Cosmetics sales top W10tr on hallyu

China and Japan account for more than half of Korea’s cosmetics exports


Domestic sales of cosmetics jumped 9.6 percent to 10.82 trillion won ($9.6 billion) last year on greater demand from foreign tourists and local consumers’ diversifying tastes.

Last year marked the second sharpest year-on-year growth in cosmetics sales after 11.3 percent in 2009, according to Statistics Korea.

Market watchers attribute the steep increase to a growing number of tourists from abroad buying Korean beauty products and rising imports of high-end products.

(Yonhap News)

“The cosmetics companies do not keep count of the purchases by foreigners, but they have all opened brand stores in Myeong-dong and duty-free shops where a lot of tourists visit,” an industry official said.

The domestic sales of cosmetics has continued to surge from 7.22 trillion won in 2005 to 7.42 trillion won in 2006, 7.98 trillion won in 2007, 8.35 trillion won in 2008, 9.3 trillion won in 2009 and 9.8 trillion won in 2010.

According to the Korea Cosmetics Association, the country’s cosmetics exports have also shown an average annual growth of 28.4 percent between 2006 and 2010 thanks to hallyu, or the Korean Wave, and the companies’ aggressive marketing.

In 2010, beauty product exports soared 80 percent from the year before to $761 million.

China and Japan account for more than half of Korea’s cosmetics exports.

Korea’s leading cosmetics maker, AmorePacific Group, last week reported that its net profit jumped 14.3 percent last year on increased demand for its key products.

The group said its net income reached 376.1 billion won ($335.1 million) last year, compared with a profit of 329 billion won a year earlier.

In Japan, the epicenter of hallyu, imports of Korean cosmetics doubled to more than $100 million last year. The amount purchased by Japanese tourists in Korea is estimated to be hundreds of millions of dollars.

With the acute rise in sales at home and abroad, production by Korean cosmetics makers in value has climbed by an annual average of 10.9 percent since 2006. It surpassed 6 trillion won in 2010.

Due to the consumers’ diversifying taste, Korea’s cosmetics imports have also shown an annual average growth of 10 percent since 2006.

Imports of beauty products topped $1 billion for the first time in 2010.

By Kim So-hyun (sophie@heraldcorp.com)