'Up to 5,000 Won' Cosmetics Rumor Draws 1020 Crowd... Beauty Product Sales Increase by 70%

Beauty Product Sales Up 40% This Year
High Purchases by Teens and 20s Due to Affordable Prices
Continuous Attraction of New Brands

Asung Daiso has strengthened its sales of cost-effective (price-performance) beauty products, challenging CJ Olive Young, the No. 1 player in the health and beauty (H&B) industry. Leveraging its offline stores nationwide, it is increasing the entry of low-priced beauty brands and launching a full-scale market attack.

According to Daiso on the 24th, beauty product sales from January 1 to March 20 this year grew by 40% compared to the previous year. Looking at age groups, purchases by customers in their teens and twenties are steadily increasing. Based on Daiso membership data for January and February, beauty product purchases by customers in their teens and twenties increased by 30% compared to the previous year, and this year, they rose by 70% compared to last year. It is analyzed that the recent prolonged high inflation has led young people with thinner wallets to buy more low-priced cosmetics at Daiso.

View of the beauty corner at Daiso Maebong Station branch. [Photo by Asung Daiso]

Currently, the domestic offline beauty market is virtually dominated by Olive Young. As of the end of last year, Olive Young had 1,298 stores. GS Retail’s Lalavla, originally a competitor, completely withdrew its business at the end of November last year, and Lotte Shopping’s LOHB’s also closed all road shops, with only some converted into shop-in-shop formats within Lotte Mart. Daiso sells beauty products in stores nationwide, and products can also be purchased through its store-based delivery service, Shop Daiso. The number of Daiso stores nationwide is about 1,390, slightly more than Olive Young. However, due to Daiso’s nature of handling only low-priced products, there are clear limitations in securing offline beauty market share.

Daiso cosmetics’ biggest competitive edge is the price, capped at 5,000 won. All Daiso products are uniform-priced, consisting of six price points: 500 won, 1,000 won, 1,500 won, 2,000 won, 3,000 won, and 5,000 won. To improve product quality at prices lower than market cosmetics, Daiso sources products from responsible sellers and cosmetics specialized companies engaged in ODM (Original Design Manufacturing) and OEM (Original Equipment Manufacturing). In fact, it collaborates with professional cosmetics brands, and some products are manufactured by Korea Kolmar, Cosmax, and Cosmecca Korea, which have verified cosmetics quality.

Since last year, Daiso has been continuously attracting new brand companies. The range and types of products vary from basic skincare to cleansing products, color cosmetics, and men’s cosmetics. In April last year, it introduced Nature Republic’s Botanical Garden; in May, JM Solution’s B5 Hia line and Chosungah Beauty’s Chochoslab; in August, Aekyung’s cleansing specialist brand Point; in October, Danahan’s Goyun Red Ginseng Vinegar line; in November, Clio’s Twinkle Pop; and in December, additional products from Nature Republic’s Botanical Garden.

This year, Daiso is focusing on strengthening the beauty category and significantly expanding its product lineup. It plans to continue enhancing the entry of various brands and actively discover and introduce products that have become trends on social networking services (SNS). This month, it planned five types of Bifruit basic cosmetics. Bifruit uses Jeju’s imperfect carrots with high organic content and has completed skin irritation tests, making it suitable for sensitive skin. The Real Carrot Ampoule, Cream, Water Essence, and Cleansing Gel are each priced at 5,000 won, while the Real Carrot Pads cost 1,000 won. Purchasing all five products as a set costs just over 20,000 won.

A Daiso official said, "With the advent of the no-mask era, more people are looking for cost-effective beauty products," adding, "We plan to continue strengthening the range of beauty products through collaborations with professional cosmetics brands and to release products that satisfy both price and quality."