K-Beauty's Export Landscape Shifts as Indie Brands Surge

K-Beauty continues to achieve record export figures, with small and indie brands emerging as key players in the export market. The landscape of K-Beauty exports, once dominated by large brands, is rapidly changing, leading to significant growth for contract manufacturers (ODM) as well.

According to data from the Korea Customs Service released on August 30, the total export value of cosmetics in the first half of this year (January to June) reached $5.728 billion (approximately 8.502 trillion won), marking a 25.1% increase compared to the same period last year. This figure represents the highest first-half performance since the Customs Service began tracking related statistics in 2000.

The remarkable growth has been driven by small and indie brands. The Ministry of SMEs and Startups analyzed customs clearance data and reported that the export value of cosmetics from small and medium-sized enterprises (SMEs) reached $5.07 billion in the first half of this year, a 30.7% increase from the same period last year. This makes cosmetics the top export item among all SMEs. Compared to the $2.26 billion in cosmetics exports recorded in the first half of 2022, this represents a 2.2-fold increase.

When comparing the total cosmetics export figures, the share of small and medium-sized enterprises in cosmetics exports surged from 55% in the first half of 2022 to 88.5% in the first half of this year. Established indie brands like Mediheal, Anua, Dalba, and Chosun Beauty have expanded their presence, while new brands are also gaining recognition in overseas markets, including Europe, North America, and emerging markets in Latin America.

The growth of small and indie brands is also benefiting the ODM sector. The trend of focusing on product planning, branding, and marketing while outsourcing production to specialized ODM companies is becoming more widespread. Cosmax reported an operating profit of 73.7 billion won in the second quarter of this year, a 21.2% increase from the same period last year, achieving its highest quarterly performance ever. Kolmar Korea also recorded an operating profit of 110.3 billion won during the same period, marking its highest quarterly earnings to date. As small brands thrive in the global market, ODM companies are also experiencing positive growth, creating a virtuous cycle.

Park Jong-dae, a researcher at Hana Securities, noted, "Established brands like Mediheal, Anua, Dalba, and Chosun Beauty are significantly increasing their scale, and new brands such as Ingredient Editor, Sally Max, On Ingredients, and Dr. Juol are also making impressive strides." He emphasized that the scaling up of small and indie brands is driving the growth of K-Beauty.

Park also predicted that the growth of K-Beauty led by indie brands will continue, as Korean cosmetics began to be prominently featured on retail shelves in the U.S. and Europe starting late last year.