The cosmetics industry is rapidly rising as Korea’s new export engine. As recent as three years ago the cosmetics industry was in the red, but it has experienced a rapid growth since then to post an output of more than 8.5 billion U.S. dollars last year. Despite
Korea’s sluggish export performances all across the board and stunted economic growth, the local cosmetics manufacturers are enjoying explosive growth industry-wide. Let’s take a detailed look at the stunning growth of the Korean cosmetics industry with Professor Kim Kwang-seok김광석 of Hanyang University’s Graduate School of International Studies.

According to a report issued last Wednesday by the Ministry of Food and Drug Safety, local cosmetic manufacturers’ output increased 19.6%, from roughly 7.6 billion U.S. dollars in 2014 to almost 9.2 billion in 2015. Cosmetics production posted double-digit growth figures every year since 2010, resulting in an annual average of about 13%. The lion’s share of Korean cosmetics exports is to China, amounting to more than one billion dollars. It is followed by exports to Hong Kong with nearly 600 million dollars, the United States with over 171 million dollars, and Japan with nearly 120 million dollars. Korean cosmetics are also popular in European nations, such as France and several Southeast Asian countries like Myanmar.


Last year Korea’s cosmetics production rose almost 20% from the previous year. The export of cosmetics increased 44%, while import grew only 3.83%, posting a trade surplus of almost 1.5 billion dollars last year. Cosmetics export destinations have become more diversified as well. In addition to the major export nations such as the Chinese-speaking countries, the United States, and Japan, Korea’s cosmetics export to France grew a staggering 149% compared to the year before. At the same time, exports to Myanmar and Kazakhstan recorded respective growth rates of 84% and 52%. The soaring export performance of Korean cosmetics products can be attributed to improved product quality.

Such stellar performance of the local makeup product industry is attributed to the popularity of functional cosmetics, such as the beauty products that help remove wrinkles, block out ultraviolet rays, or have whitening properties. The emergence of such beauty products with specific functions have boosted the industry’s overall performance. Last year 3.25 billion dollars’ worth of functional cosmetics were produced, accounting for about 36% of the entire cosmetics sector. In addition, the popularity of color makeup products, hair care products, cleansers, and other items have played a pivotal role in driving Korea’s cosmetics exports.


An analysis of the industry growth of Korean cosmetics over the past three years shows great advances in functional beauty products. Europe is the leader in color makeup items such as eye shadows or lipsticks, but Korea is strong in beauty products that incorporate medicinal and pharmaceutical ingredients. Other innovative functional beauty items include “Cushion Foundation,” a mixture of sun block, makeup base and foundation absorbed into a special sponge. These cushion foundation types have gained recognition from world-leading cosmetics companies. In addition, the soaring popularity of Korean cultural content, such as TV shows and K-pop songs, factor in to drive the global demand for Korean-made beauty care products.

We cannot talk about the popularity of Korean cosmetics without talking about the influence of hallyu or the K-pop culture wave. Hallyu is no longer confined to dramas or K-pop songs. It is now expanding into the areas of fashion, cosmetics and other consumer goods. The significance of hallyu is so extensive that a new term of “K-beauty” was coined to represent the widening popularity of Korean beauty products. As Korean cultural content has become trendier around the world, overseas consumers have grown more preferential to Korean-made beauty products.


Increased interest in Korean TV shows and K-pop songs has led to curiosity about the beauty products used by hallyu stars and to rising consumer demands for K-beauty items. It is said that seven out of ten Chinese tourists in Korea purchase Korean cosmetics, illustrating how much trust the Chinese place on Korean-made makeup products. Foreign buyers also cite cosmetics as a high-demand item. As a result, Korean cosmetics exports amounted to over 2.5 billion dollars last year, which is equal to exporting 12.3 million Samsung mobile phones. The growth in popularity of Korean cosmetics is expected to continue.

Mature economies, particularly the United States, have shown clear signs of economic rebounds since 2015. This recovery trend has prompted Korea to change the export structure to focus on consumer goods. The Chinese economy is also shifting toward promoting its local spending over export. So Korea needs to encourage exports of consumer goods to China. Lastly, consumers worldwide are now converting to shopping online or directly purchasing from overseas sellers. So Korean makeup manufacturers do not necessarily have to load ships and pioneer new export markets. Instead they should sell their products at local online shopping malls so that foreign customers can visit Korean internet shopping malls to conveniently purchase Korean beauty products. Such a system will make exporting consumer goods more promising.

Korea’s flagship export industries are currently at a standstill. Korea’s export has recorded minus growth for 17 months in a row and 13 flagship export items, such as semiconductors, mobile phones, automobiles, steel, shipping and shipbuilding, which represent 79% of Korea’s total exports, have been back-pedaling. Amid the gloomy situation the local cosmetics industry is providing a ray of hope. But still improvements need to be made.

Since online shopping and direct overseas purchase have become rising shopping trends, domestic and overseas online shopping malls should allow Korean consumer goods manufacturers to do business at their sites. Also, key export targets should be assigned for each consumer product. For instance, Korean snacks are growing popular in the United Arab Emirates and Korean beverages in Afghanistan and Cambodia. So, investigating which consumer items are right for which export market is essential for the success of exports.

The Korean cosmetics industry is being cited as a breakthrough for the Korean economy. If the popularity of one product can spill over to other areas, the Korean export sector will enjoy more growth.