- Providing an overview of Korea's leading export-driven cosmetics industry and key support policies -
On Wednesday, July 24, the Ministry of Health and Welfare (Minister Cho KyooHong) held a press conference at the K-Beauty Experience Space and Promotion Center in Myeongdong. This event offered foreign media journalists the opportunity to experience and introduce makeup products from promising small and medium-sized Korean cosmetic companies.
Despite the challenges such as COVID-19 and stricter regulations in China, the Korean cosmetics industry, a leading export-driven sector, has shown an average annual growth* of 6.7% over the past five years (2019-2023). In the first half of 2024, exports reached USD 4.8 billion, marking the highest semi-annual record to date, marking an 18.1% increase compared to the same period last year (USD 4.1 billion). The industry has maintained a trade surplus since 2012.
* Cosmetic exports over the last five years (in USD billions): (2019) 6.5 → (2020) 7.6 → (2021) 9.2 → (2022) 8.0 → (2023) 8.5
The press conference was organized to further promote the excellence of Korean cosmetics worldwide, especially as the global recognition of Korean beauty products rises*. Foreign media journalists were invited to the K-Beauty Experience Space and Promotion Center for a briefing on the current state of the Korean cosmetics industry and its key support initiatives by the government, followed by hands-on experiences with Korean beauty products.
* According to a survey of 26 countries on 11 types of Korean cultural content, Korean beauty products ranked second in four out of seven categories (popularity, consumption, favorability, and purchase intent). <2024 Overseas Hallyu Survey (Korean Foundation for International Cultural Exchange)>
* Recently, K-beauty products have topped sales during major promotional events on key overseas online distribution channels (Ranked 1-5 on Amazon US, July 16-17, 2024, and 1-3 on Qoo10 Japan, November 22-December 3, 2023).
Opened in October 2021, the K-Beauty Experience Space and Promotion Center in Myeongdong aims to support the exhibition and promotion of products from promising small and medium-sized cosmetics companies, as well as the operation of brand pop-up stores, targeting foreign visitors. To date, the center has displayed 558 products from SMEs, attracted 110,631 visitors, and provided experience services to 20,000 people, including 13,018 foreigners (65%). It has also gained popularity online, with 100,000 views on Instagram and 590,000 views on YouTube. Due to the success of this first center, a second center was opened in Hongdae in February this year, establishing itself as a key attraction for Korean cultural tourism.
As the Korean cosmetics industry has advanced alongside the "Korean Wave" (Hallyu) and established global competitiveness, the Ministry of Health and Welfare will continuously implement policies to expand to overseas markets, support responding to export regulations, establish industry infrastructure like the K-Beauty Academy, and conduct R&D for essential and high-value-added cosmetic materials, while continuously promoting the excellence of Korean cosmetics worldwide.
* As of 2023, Korea ranked fourth in global cosmetics exports (1st France, 2nd US, 3rd Germany, 4th Korea).
Jung Eunyoung, Director General of the Bureau of Health Industry Policy at the Ministry of Health and Welfare, stated, "We are grateful for the efforts* of cosmetics companies, especially small and medium-sized enterprises and small business owners, who strive to export with creative and innovative ideas despite challenging conditions. The government will continue to provide unwavering support to ensure that our cosmetics industry continues to grow as a leading export-driven sector."
* Export by SMEs: Of the USD 8.5 billion total cosmetics exports in 2023, SME products accounted for USD 5.4 billion (63%). In 2022, 60.8% (4,889 companies) of cosmetics exporters were small businesses. ///