MOTIE and MFDS Sign MOU
Announcing Plans to Strengthen Global Competitiveness of K-Beauty SMEs and Venture Companies
The Ministry of SMEs and Startups and the Ministry of Food and Drug Safety have joined forces with the private sector to strengthen the global competitiveness of the cosmetics industry.
On the 24th, the Ministry of SMEs and Startups and the Ministry of Food and Drug Safety jointly announced the 'K-Beauty SME and Venture Companies Global Competitiveness Enhancement Plan' and signed a memorandum of understanding at the CJ Olive Young headquarters in Yongsan-gu, Seoul.
Recently, cosmetics exports have surged. SMEs are responsible for about 63% of cosmetics exports, leading the export market. Last year, cosmetics exports by SMEs reached a record high of 5.3 billion USD, making cosmetics the top export item for SMEs. This growth trend continued this year, with cosmetics exports by SMEs reaching 3.3 billion USD in the first half, an increase of approximately 30.8% compared to the same period last year.
Global demand for domestic cosmetics is increasing. Global platforms such as Amazon are actively working to discover excellent domestic products. However, some companies feel burdened by the constant innovation and marketing required to respond to rapidly changing global trends, and SMEs are facing increased difficulties in coping with strengthened overseas export regulations aimed at protecting domestic industries and consumers.
In response, the government has devised measures to empower the private ecosystem so that more companies can utilize opportunities to expand cosmetics exports and grow. Specifically, the plan consists of three strategies: ▲ Discovering and nurturing promising K-Beauty companies through public-private collaboration ▲ Systematic response to overseas export regulations ▲ Leveling up the K-Beauty ecosystem.
First, the plan is to discover and nurture promising K-Beauty global companies by leveraging the excellent expertise and infrastructure of the private sector. In collaboration with CJ Olive Young, the 'K-Super Rookie With Young' program selects and nurtures indie brands, and the ‘K-Beauty Creator Challenge’ works with private platforms and manufacturers/distributors such as Amazon, Cosmax, and Kolmar to discover and nurture promising export companies. Additionally, a ‘Global K-Beauty Dedicated Fund’ will be established, jointly invested by Kolmar, Cosmax, and the Korea Venture Investment Corp., focusing on cosmetics manufacturers expanding overseas.
Support for responding to cosmetics export regulations will be strengthened. Export regulation response manuals for major countries will be updated. Additional manuals will be produced and distributed focusing on emerging countries. The burden on companies preparing for certification by aligning domestic cosmetics GMP (Good Manufacturing Practice for Cosmetics) standards with international standards (ISO) will be reduced.
Furthermore, support measures such as policy funds, smart factories, and research and development (R&D) will be enhanced to enable rapid development and production of innovative products. The ‘K-Beauty Network Loan’ will be newly established to provide policy funds based on purchase contracts between brand companies and manufacturers to produce innovative products. Through the Ministry of SMEs and Startups and Ministry of Food and Drug Safety’s collaborative smart factory support in the cosmetics sector, production facilities suitable for small-lot, multi-product manufacturing will be supported.
Minister Oh Young-joo of the Ministry of SMEs and Startups emphasized, “We will do our best to ensure that our SME cosmetics brands secure a global premium status that remains resilient amid global environmental changes.”
Director Oh Yu-kyung of the Ministry of Food and Drug Safety stated, “We will continue to support K-Cosmetics to establish a stronger foothold in the global market through active regulatory diplomacy and rational regulatory improvements.”
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