More and more businessmen are rushing to cosmetics businesses, which are considered some of the very few cash cows in the stale domestic market.
Mostly targeting Chinese and other Southeast Asian consumers who reportedly embrace “Made in Korea” beauty products and beauty regimes, from entertainment agencies to online retail outlets, pharmaceutical firms and even ceramics and tech companies are turning their heads to what they believe is the new El Dorado.
According to the Ministry of Food and Drug Safety, the number of state-registered cosmetics maker is 1,938, a leap of about 34 percent from 1,438 in 2012.
The new entrants have different backgrounds, with some having no prior experience making facial cream or lipstick.
The 73-year-old high-end ceramics maker Haengnam Chinaware signed a memorandum of understanding with Hong Kong-based Emperor Entertainment Korea on Nov. 26 and announced its advancement into the cosmetics market. Haengnam, which saw 4.3 billion won ($3.68 million) in losses last year, stated that “the partnership will support the company’s business venture into the unknown territories.”
Retail giant E-Land launched beauty products to be sold at its “Ebline” lingerie shop, while e-commerce operator Interpark has introduced “Laplandia,” a skin care brand inspired by the Nordic environment that uses birch extracts as the main ingredient. “The launch of the cosmetics brand will help us expand our presence to a lifestyle brand from fashion,” an E-Land spokesman said.
Some of the most unlikely firms are set to join the cosmetics craze. Wireless Internet solutions company Point I and urban mining company Gumsung Tech in October announced their advancement into the cosmetics market by purchasing cosmetics companies, IOK and Skincare, respectively. Information technology company IDN has recently changed its name to BotaBio and is seeking to make inroads into the bio and skin care industries.
“This is part of our business diversification. In order to adopt professional touches we have decided to acquire beauty makers,” said a worker at one of the aforementioned companies, who declined to be named.
Their reason is simple: The market is hot.
The Korean cosmetics market is estimated at around 7.6 trillion won as of 2013 and has grown by 8.3 percent a year since 2008.
And there is more. Thanks to the Korean pop culture fever, Korea’s beauty regimes and products have been popular across Southeast Asia and, most of all, China.
According to a report by the Korea Trade-Investment Promotion Agency, Korean products have the second-largest share (22.4 percent) in China’s imported beauty product market with $489.2 million worth of items exported between January and September this year.