Why K-beauty is a must-know market 

It’s almost midnight, the blue light from my phone penetrates my epidermis as I shop for products to give me glass skin. (The irony of which is not lost on me.)

Meanwhile, my TikTok algorithm serves me a continuous loop of K-beauty products “that actually work”. And if you studied my bathroom vanity, you’d probably think I was conducting a science experiment, complete with an obsession with snail mucus and rice water. Except, in this instance, you’ve actually stumbled across an Australian-born marketer who has unapologetically been swallowed whole by the Korean beauty industry. The same industry is expected to reach US$19.1 billion globally by 2034. 

Korean beauty first gained popularity in the Western world during the mid-2010s with the arrival of the BB cream. Platforms such as Instagram and YouTube played a role in popularising what is often referred to as K-beauty. The focus on multi-step skincare routines, innovative ingredients, and unique formulations drew worldwide attention and Korean beauty quickly became a global obsession. A world that is constantly crying about being time-poor suddenly found time for a 10-step skincare routine. It was, quite frankly, bonkers. But therein lies the power of Korean beauty. 

I’ve been a huge fan of Korean beauty for years, and let me tell you why it’s so captivating. Korean beauty is all about constant innovation, introducing unique ingredients like snail mucin, centella asiatica (a herb), and fermented rice water, along with specialised product categories like essences, ampoules and sleeping masks. Words that once had no relevance to the beauty industry whatsoever are now trending topics globally. What’s even more impressive is that many Korean beauty products are reasonably priced without compromising on quality. For instance, the Cosrx Snail Mucin 96% Power Repairing Essence, a best-seller on Amazon, will set you back only A$16. This attractive pricing strategy makes Korean beauty highly accessible to the masses. Korean beauty also emphasises skincare and self-care over masking imperfections, making Korean products a perfect addition to the most dominant category, the skincare market. 

K-beauty is big business

There are several online retailers, such as Beauty Amora, Nudie Glow, and Stylevana that ship Korean beauty products to Australians, (consider this my collective thank you). Even the Australian online giant Adore Beauty has a dedicated Korean skincare category, with Australia’s Mecca and Sephora Australia offering a limited range of Korean products as well.

Over in the US, Ulta Beauty launched a dedicated Korean collection this March. Tara Simon, Ulta’s senior vice-president of Prestige Merchandising, told WWD, “Our special selection is a curation specific to Ulta Beauty that simplifies the Korean beauty routine, offering effective products known for the excellence of their ingredients.” While there are iconic and trending Korean must-haves, Ulta Beauty aims to provide a streamlined collection of basics from brands such as Cosrx, Cle, SkinRx Lab, Thank You Farmer, CLE, and Botanic Farm. It appears that everyone wants a piece of the K-Beauty market, which is showing no signs of slowing down. 

In more recent news, Warren Buffett, one of the world’s most renowned investors, shook up the market with some major beauty sector investments. His firm added new positions in Ulta Beauty and Heico, sparking a surge in K-Beauty stocks. 

A tough nut to crack

Whilst the Western world cannot wait to grab a hold of the K-beauty magic, the Korean market isn’t as enthusiastic about Western beauty. This is what fascinates me the most. A few iconic Western beauty retailers have attempted to inch into the Korean market, with an understanding that beauty is thriving and Korea is the place to be. Look, they’re not wrong, but they’re not entirely right either. 

In May of this year, LVMH’s Sephora faced a disappointing setback when it had to completely shut down its operations in Korea due to stiff competition from local competitor CJ Olive Young, the local beauty retailer that holds almost 90 percent of the beauty market in the country. UK-based Boots also struggled in the Korean market, having to close all 33 of its stores within a few years due to poor profitability. Lessons have been learnt. It’s clear that the Korean beauty market is a tough nut to crack for Western brands because of the dominance of well-established local brands and retailers like CJ Olive Young. These local retailers are deeply in tune with Korean consumer preferences and can quickly adapt to trends and demands, making it challenging for Western brands like Sephora to make their mark. 

It doesn’t help that the Korean beauty market is also a whirlwind of innovation, with new products and trends popping up faster than you can ask, ‘What’s next?’. Local Korean brands are quick to innovate, with trends like glass skin originating from South Korea. 

Movement on the Western front is generally slower, with brands frequently following trends instead of setting them. Then there are Korea’s local retail giants, such as CJ Olive Young and Aritaum, who have incredible distribution networks and well-established loyalty programs. Western beauty retailers like Sephora and Boots have found it challenging to build similar networks and consumer loyalty quickly, causing difficulty in establishing sustainable revenue. 

Korean beauty is an exciting market to follow and it isn’t showing any signs of slowing down. If you’re in the industry or you’re looking to invest, it’s a topic with which you should get acquainted. Staying updated on the latest K-beauty trends and innovations could be your key to tapping into one of the most dynamic segments of the global beauty market.

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