Rapid Growth of K-Beauty Leads to Exponential Increase in Brands
Expanding Offline Event Planning and Beauty Sector
As the market size of indie brands launched by small and medium-sized cosmetics companies grows, the number of brands listed on e-commerce platforms has surpassed 2,000. With 'K-Beauty' gaining popularity in the global market and 'mega brands' with annual sales exceeding 100 billion KRW emerging one after another, the number of brands has increased exponentially.
According to the distribution industry on the 6th, the number of beauty brands listed on the fashion e-commerce company Musinsa currently reaches 1,700. When the beauty specialty section was launched in November 2021, the number of brands listed was only 800, more than doubling in 2 years and 9 months. This means that about one brand has been created every day.
The fashion platform Zigzag currently has 2,200 beauty brands listed. As of the end of last year, the number of brands was 1,600, which increased by 600 (38%) in just 9 months. Abley has confirmed that the number of brands has surged by 45% compared to the end of last year. Olive Young does not disclose the number of brands listed. Since the revision of the Cosmetics Act in 2012, which divided cosmetics businesses into manufacturers and manufacturer-distributors, the number of cosmetics brands has increased every year, and recently the pace has accelerated.
As the number of brands has increased, transaction volume is also rapidly growing. Musinsa recorded a growth of over 90% from January to July this year compared to the previous year. Zigzag's transaction volume as of last month increased by 127% compared to the same period last year, and the number of buyers grew by 124%.
The explosive growth of the domestic small and medium cosmetics market is due to K-Beauty gaining attention not only domestically but also in overseas markets. According to the Korea Customs Service, cosmetics export performance from January to July this year reached 4.7 billion USD (6.37 trillion KRW), about 18% more than 4 billion USD during the same period last year. Small and medium cosmetics brands with a high proportion of overseas sales, such as TirTir and Skin1004, achieved sales of over 100 billion KRW in the first half of this year alone.
K-Beauty purchases by foreign visitors to Korea are also increasing. According to health and beauty (H&B) store Olive Young, foreign sales at offline stores in the first half of the year grew by about 190% compared to the same period last year.
For this reason, e-commerce platforms are also aggressively attempting offline expansion. They have created spaces where consumers can directly experience indie brands gathered in one place.
Fashion e-commerce company Musinsa is holding a beauty pop-up store in the Seongsu-dong area of Seongdong-gu, Seoul, from today until the 8th. This is the first time Musinsa has ventured offline with beauty companies rather than in the fashion sector. During the event, Musinsa will offer discount benefits in collaboration with 41 brands and local beauty brand shops in Seongsu-dong (such as Lush, Innisfree, Hince, etc.).
Offline events have become a core strategy for e-commerce platforms strengthening their beauty business. The idea is to introduce brands selected by the e-commerce platform offline and then attract them online. A cosmetics industry insider said, "The offline event likely aims to increase experience by showcasing brands curated directly by the platform," adding, "Since Musinsa is expanding its fashion business based in Seongsu-dong, it will likely try to capture the interest of MZ (Millennial + Gen Z) customers in connection with this."
Offline beauty events first started in 2019 with the Olive Young Awards & Festa. After going through the COVID-19 period, Coupang joined the offline parade by launching the Mega Beauty Show in August last year. This year, following Musinsa, the dawn delivery company Curly, which operates Beauty Curly, plans to hold a beauty show at Dongdaemun DDP in mid-October. Olive Young also plans to hold a Festa in December this year.
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