19 New Cosmetic Products Launched Last Year, 8 This Year
VT 'Riddle Shot', Son & Park 'Color Bomb' Produce Hit Products
150% Sales Growth in Cosmetics Sector in Q1 This Year
As Daiso, a cost-effective household goods specialty store, emerges as a cosmetics sales channel, beauty brands are continuously entering the market. Daiso cosmetics priced under '5000 won' have become a hot topic on social media platforms such as YouTube, Instagram, and blogs, selling out rapidly to the point of causing shortages.
According to Daiso on the 24th, a total of eight cosmetics brands launched new products in Daiso stores from the beginning of this year until this month. Considering that 19 new products were released at Daiso last year, new products are being introduced at a faster pace this year.
Daiso had only four cosmetics products in 2021 but has rapidly expanded its product lineup in just over three years. Currently, 34 cosmetics brands are stocked at Daiso, with about 310 products available.
The brands that launched new products this year include Able C&C's 'A'PIEU', Gounsesang Cosmetic's 'Lab It', Son & Park, Innel Cosmetics' 'Ipkn End', Twinklepop, and BTTC. A'PIEU expanded into color cosmetics this year. Until last year, it sold the 'Tea Tree Line', a basic skincare line specialized for sensitive and blemished skin, which sold 330,000 units within eight months of launch.
Gounsesang Cosmetic is well known as the company behind 'Dr.G'. Lab It is a new brand focusing on skincare products for younger customers and chose Daiso as its first distribution channel. Considering future overseas expansion, they judged that entering the Daiso channel was appropriate to quickly gauge young customers' reactions.
Following last year's VT 'Riddle Shot' craze, a new product has emerged. It is Son & Park's 'Arty Spread Color Balm'. After starting sales last month, the initial stock sold out within two weeks. Priced at 3000 won, this product shows similar pigmentation to luxury brand Chanel's 'Lip & Cheek Balm (63,000 won)' and is called the 'cheap Chanel'. It quickly sells out as it gains a reputation as a 'God-value item'. On various social media platforms such as Twitter, VT Riddle Shot and Son & Park's color balm products are cited as 'products you can't even see when you visit the store'.
With consecutive 'hit products', sales in the beauty sector are growing rapidly. In the first quarter (January to March) of this year, cosmetics sales increased by 150% compared to the same period last year. The most expensive cosmetics at Daiso are priced at 5000 won, gaining great popularity among the budget-conscious MZ generation (Millennials + Generation Z). Rational consumers seeking cost-effective products are also expanding their purchasing experience at Daiso.
Because of this, more companies in the cosmetics industry are positively considering entering Daiso. A beauty industry insider said, "In the past, there was a strong belief that entering Daiso could negatively affect brand image," adding, "It seems that VT's great success after entering Daiso was a stimulus." In fact, VT's Riddle Shot, which became a sold-out item at Daiso, also entered home shopping (CJ OnStyle). The company's stock price has risen by 23% in the past six months.
As cosmetics products gain popularity, Daiso's sales are also rapidly increasing. Based on 2021, Daiso's sales grew from 2.605 trillion won to 3.46 trillion won last year. The distribution industry expects Daiso to exceed 4 trillion won in annual sales this year by focusing on cosmetics and fashion sectors.
Daiso's operating profit last year was 260 billion won, which is somewhat reduced compared to 284 billion won two years ago. This is due to increased selling and administrative expenses caused by a sharp rise in labor costs from aggressive business expansion.
Daiso plans to accelerate the entry of new cosmetics brands. A Daiso representative explained, "We will prepare a variety of products to satisfy many customers," adding, "We will diversify the product lineup not only in beauty but also in the fashion sector."
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