Cosmetics Exports Reach $3.94 Billion, Up 19.7% Year-on-Year
Total SME Exports Hit $56.7 Billion, Marking Seven Consecutive Quarters of Growth
Surging Demand in New Markets Such as the UK and Poland, Alongside the US and Middle East
Driven by the strong performance of K-beauty, small and medium-sized enterprises (SMEs) recorded their highest-ever export figures for the first half of this year. Cosmetics exports showed double-digit growth, leading overall performance, while demand from major countries such as the United States, UAE, and Poland increased evenly, marking the beginning of full-scale diversification of export destinations.
According to the "2025 First Half SME Export Trends" announced by the Ministry of SMEs and Startups on August 4, SME exports in the first half of this year reached $56.7 billion, a 3.0% increase compared to the same period last year. This marks the seventh consecutive quarter of growth since the fourth quarter of 2023. The number of exporting SMEs also reached 78,655, up 2.2% year-on-year, setting a new record for the highest number of SME exporters in the first half of a year.
Cosmetics, the top export item among SMEs, recorded $3.94 billion, up 19.7% from the same period last year, breaking the previous first-half record of $3.29 billion set last year. As K-beauty awareness expanded, demand increased not only in traditional key markets such as the United States and China but also in emerging markets like the United Arab Emirates (UAE, up 63.6%) and Poland (up 160.5%).
Automobile exports reached $3.92 billion, a 73.7% increase from the same period last year. There was a sharp rise in demand for used cars, especially in the Middle East, due to high brand awareness and price competitiveness. The UAE (up 97.7%) also saw increased demand for tourist rental cars, solidifying its role as a hub for used car exports. However, due to factors such as the temporary slowdown in demand for electric vehicles (the so-called "EV chasm"), other machinery exports fell 31.2% year-on-year to $1.07 billion.
The United States, the top export destination for SMEs, recorded $9.33 billion in exports, with continued growth in key export items such as cosmetics (up 13.8%) and power equipment (up 27.4%), setting a new first-half record. However, the Ministry of SMEs and Startups analyzed that "the strong export performance to the US in the first half may also be due to companies stockpiling inventory in anticipation of higher tariffs such as reciprocal duties."
For items subject to US tariffs, export performance varied by product. Steel and aluminum exports decreased by 16.3% and 3.4%, respectively, compared to the same period last year, while auto parts exports increased by 10.3%.
Online exports in the first half increased, centered on cosmetics ($290 million, up 13.7%), and SMEs accounted for 77.1% of total online exports, indicating that SMEs are leading online exports. In addition, countries that were not previously among the top 10 export destinations, such as the United Kingdom ($26 million, up 180.0%↑) and the Netherlands ($16 million, up 104.6%↑), showed high growth rates, reflecting a diversification of countries favoring Korean products based on K-culture.
Lee Soonbae, Director General for Global Growth Policy at the Ministry of SMEs and Startups, stated, "K-beauty is driving the overall increase in SME exports," adding, "We will also identify and foster other promising items based on K-software, such as fashion and food." He continued, "Online exports are growing in scale and are cost-effective, so we plan to guide beginner exporters to start with online exports when preparing to enter overseas markets."
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