[The Editors' Verdict] The Power of Korea's 'Pilgrimage Route' K-Beauty

Let Us Create a Pilgrimage Route for K-Beauty
Foreigners Visit Korea for Olive Young Shopping
Korean Cosmetics Recognized for Excellent Quality and Value

The Santiago Pilgrim Passport is a record of consumption. Pilgrims walking at least 100 kilometers along the Camino de Santiago in Spain collect stamps called "Sello" in their Pilgrim Passport, known as "Credencial del Peregrino," to prove their journey whenever they eat, sleep, or buy souvenirs. They willingly open their wallets to receive Sello stamps not only at albergues and restaurants but also from guitarists encountered on remote stretches of the trail, and the fun of collecting stamps is a rewarding experience.

The Camino de Santiago leads to Santiago de Compostela, the city where the tomb of James, one of Jesus's twelve apostles, is located. Pilgrims present their Pilgrim Passport in this city to receive a certificate of completion. Although the pilgrimage route began for religious reasons, today it attracts people from all over the world seeking challenge and cultural experiences. Last year, nearly 500,000 pilgrims received certificates of completion.

What is encouraging is that Korea now has a pilgrimage route that can attract people from all over the world. That is "K-Beauty." Former UK Prime Minister Rishi Sunak drew attention last May when he said, "When I told my teenage daughters I was coming to Korea, they insisted I visit Olive Young and gave me a list of cosmetics to buy." A Hong Kong university student I met on the pilgrimage last month also said she had visited Korea two years ago specifically to shop for cosmetics at Olive Young.

According to Olive Young, last year foreigners from 189 countries visited Olive Young stores. During this period, Olive Young's sales to foreigners jumped by 140 percent. Olive Young recorded a 23 percent increase in total sales last year, reaching 4.8 trillion won, with foreigners driving this growth. The secret to its popularity is that customers can purchase a wide variety of cosmetics in one place. The process of testing products in person offers an experience akin to discovering hidden treasures, drawing foreign customers to Olive Young stores.

Above all, the excellent quality of Korean cosmetics has been the foundation. During the COVID-19 pandemic, foreigners who encountered K-pop and K-dramas through global platforms such as YouTube and Netflix became increasingly interested in the Korean cosmetics used by the stars of these contents. After actually trying the products, they found not only outstanding technology but also strong price competitiveness, fueling the global K-beauty boom.

The success of K-beauty is no coincidence. Adam Smith, regarded as the father of economics, identified in his book "The Wealth of Nations" that specialized division of labor is a key factor in increasing productivity and expanding wealth. In Korea's cosmetics industry, the separation of manufacturing and distribution began in the early 2000s as the road shop cosmetics market, led by brands like Missha, grew. Cosmetics ODM (Original Design Manufacturer) companies handle production, while a wide variety of brands are responsible for sales. As of last year, there were over 30,000 cosmetics retailers in Korea and about 4,500 manufacturers. With many companies competing, it has been possible to offer high-quality, cost-effective cosmetics.

It is a welcome development that Olive Young has become a must-visit destination for foreign tourists, leading to an increase in the number of foreigners visiting Korea. Foreign tourists not only shop but also contribute to consumption in accommodation, dining, and other sectors while traveling in Korea. This year, the number of foreign tourists visiting Korea is expected to surpass 18 million, breaking the all-time record set in 2019. To revitalize the shrinking domestic market due to population decline, more pilgrimage routes like Olive Young are needed.