CJ Olive Young Embarks on Win-Win Management with 300 Billion Investment... "Supporting the K-Beauty Ecosystem"

Creation of 'Sangsaeng Fund'... 100 Billion KRW Invested Annually Over 3 Years
Low-Interest Loans for Small and Medium Partners Implemented
Expansion of Shortened Payment Periods for Partners
50 Billion KRW Investment to Foster K-Beauty Industry Ecosystem
Social Contribution and Environmental Protection... Accelerating ESG Management

CJ Olive Young has prepared a win-win management plan and will support emerging and small beauty companies while strengthening its compliance management system.

Olive Young announced on the 11th that it will sequentially implement a win-win management plan and compliance enhancement measures starting this month, with a total investment of approximately 300 billion KRW over three years to build a sustainable and healthy K-beauty industry ecosystem.

CJ Olive Young operating in downtown Seoul. Photo by Jinhyung Kang aymsdream@

First, to promote win-win management, Olive Young has established a 100 billion KRW win-win fund in collaboration with the financial institution IBK Industrial Bank of Korea. This is to reduce the financial burden, which is considered the biggest difficulty in management for partner companies. Olive Young supports interest payments so that its small and medium-sized partner companies can secure funds with reduced interest rates.

The reduced interest rate applied through the Olive Young win-win fund is 2.39 percentage points annually, lowering the loan interest rate to up to half of the market rate. CJ Olive Young explained that if a company borrows the maximum limit of 1 billion KRW, it can save 24 million KRW in interest annually. Fifty companies that applied in the first round among the tenants will receive benefits starting in January, and the number of eligible companies will be expanded to 100 annually by 2024.

In addition, the shortened payment period, which has been applied since 2021 to direct purchase companies, will be expanded to all partner companies. Accordingly, the payment period for all partners will be reduced from the existing 60 days to 30 days. The compliance management system will also be advanced throughout the business to strengthen the ESG (environment, social, governance) management framework. To this end, Olive Young will establish an internal advisory body called the Compliance Management Committee, recruit external members, and pursue ISO certification for compliance management.

Investment in the overall K-beauty industry ecosystem will also be expanded to 50 billion KRW over three years. First, new brands and products will be continuously discovered and nurtured to enter the beauty market. Subsequently, support will be provided across all processes, including planning, research and development (R&D), sales, and marketing, to help them grow and expand overseas.

At the entry stage, initiatives such as the ▲K-beauty Startup Contest and ▲investment in emerging brands (initial operating funds and support for entry into Olive Young’s online mall) will help entrepreneurs with ideas take on challenges. At subsequent growth stages, support will be provided for ▲R&D investment, ▲participation in overseas beauty conventions, and ▲operation of export concierge services to foster the growth of small and medium beauty companies.

Olive Young expects that the growth of the K-beauty industry will accelerate based on this support. An Olive Young official said, "Having operated a distribution platform centered on small and medium cosmetic brands that did not previously exist for 25 years, we will play a bridging role in creating numerous 'small business success stories' on the global stage based on the know-how accumulated inside and outside the company."

Cosmetics export trends over the past 10 years.
[Image provided by CJ Olive Young]

In fact, as an ecosystem where various small brands can thrive has been established, the export of Korean cosmetics overseas has steadily increased. While Korean cosmetics exports remained at 2 to 3 trillion KRW annually in the early to mid-2010s, they surged to 8.47 billion USD (approximately 11 trillion KRW) last year.

The company explained that Olive Young serves as one of the global gateways for K-beauty brands. Many domestic brands gain word-of-mouth overseas through K-pop stars’ content or social media via Olive Young. Representative cases include iFamilySC, which achieved rapid growth after launching the color cosmetics brand 'Rom&nd' at Olive Young in 2018, and Manyo Factory, which succeeded in overseas expansion and stock market listing based on Olive Young’s popular cleansing oil product.

Olive Young will also engage in social contribution and environmental protection. Approximately 50 billion KRW will be supported over three years for ▲supporting hygiene and health for underprivileged groups, ▲revitalizing local economies, and ▲environmentally friendly activities. To this end, the 'Pink Box' campaign, which delivers basic hygiene products to underprivileged female adolescents, will be expanded nationwide from its current Seoul-centered scope in the first half of the year. Olive Young is also planning regional win-win programs linked to marketing of its private brand (PB) products. Efforts will be made to spread a culture of 'good consumption' through expanded use of paper packaging and cushioning materials and the launch of eco-friendly campaigns.

Lee Seon-jeong, CEO of Olive Young, said, "We will play a pioneering role in leading the global heyday of the K-beauty industry by spreading successful models that perform well in overseas markets together with Olive Young, a native beauty platform, and supporting cosmetics to become a representative export item of the Republic of Korea."