South Korea is aiming to become the third-largest cosmetics exporter in the world by 2022.
The move will be made through extensive investment in research and development and concerted marketing efforts, the government said Thursday.
“The goal is to ship out more than KRW9 trillion (US$7.6 billion) worth of cosmetic products annually and have at least seven of the world’s top 100 makeup companies, from four at present,” the ministry said.
It added that another goal is to have 276 local cosmetics companies with annual sales exceeding KRW5 billion ($4.2 million) in the target year, up from 150 now. Such growth will contribute to the creation of 73,000 new jobs in the sector.
On the research and development front, Seoul will provide small-and-medium enterprises with KRW7.7 billion ($6.5 million) in support next year, with KRW20-30 billion ($16.86–25.3 million) to be injected in this field from next year onward.
In regard to marketing, the ministry said more emphasis will be placed on the vast Southeast Asian market, where South Korean products are in high demand. The Southeast Asian market is attractive as it can generate overseas sales that have taken a hit after South Korean relations with China snagged since Seoul deployed the US Terminal High Altitude Area Defense (THAAD) on its soil in early 2017.
However, as more Chinese consumers are taking an interest in the components contained in cosmetic products, South Korean cosmetic brands are infiltrating the Chinese market using their reputation for using ‘good recipes’.
Venndata, a Chinese market research agency, reported that 45 per cent of Chinese consumers were found to purchase cosmetics after carefully looking into the components. This trend is leading more Chinese consumers to buy products from South Korean cosmetic brands, which are renowned for using natural components to make their products.
Trade data showed that in 2014, South Korea’s cosmetics exports stood at just $1.8 billion, but this has risen to $6.3 billion last year, placing it in fourth in the world overall.
Its main overseas markets are China, Hong Kong, the US, Japan, Vietnam and Thailand, with total numbers of makeup manufacturing companies and retailers standing at 12,000.
- Original reporting by H M Kang of Korea Bizwire and Yonhap, via Korea Bizwire.
