How K-Beauty Took Over Global Skin Care

By | April 13, 2021

The global cosmetics industry makesa ton of money. That includes shampoo, makeup,perfume, cologne, deodorant, soap. The list goes on. Analysts expect the industry’s revenue togrow within the next four years to more than t$379 billion. But when you break down that number,it’s skin care that’s driving much of the growth. And it’s not slowing down. I’ve used moisturizers upwards inlike 250 dollar range. The most expensive single itemwould be around 50 dollars. I try not to spend more than50 for in essence or moisturizer. Probably like this really expensive moisturizerthat I kind of got conned into buying for about 150 dollars. Skin care is an increasinglylucrative business for cosmetic companies. That’s why big names like Amazon andthe Kardashians are trying to cash in. And there’s one country that’s beenplaying an outsized role on skin care. South Korea. Here’s why. Skin care is a bigmoneymaker for big beauty brands. Over the last five years, skin care hasgrown so much that it’s become the largest piece of the pie when youbreak apart the beauty industry by product category. It makes up about 24.9 percent of a total $52.4 billion in annual revenue. And the global skin care products marketsize is expected to reach more than $196 billion by 2024. But what is makingskin care so popular? And, why are these bottles of face washand tubs of lotion bringing in so much money? This is Larissa Jensen. She’s a skin care and beautyindustry analyst with the NPD Group. Skin care has been growing very fast. It’s actually growing the fastest ofall the beauty categories that we track, including makeupand fragrance. So, it’s been the strongest performerfor the past couple of years.
What’s really driving a lot ofthat performance is actually wellness and health, and you know,really natural brands. That’s what’s really drivingthe performance of skincare. Wellness doesn’t meanjust being healthy. In 2019, it means clean eating, thelatest fitness fads and the no-makeup look, which actually doesinvolve some makeup. At any rate, the wellness trend isdriving consumers to take better care of their skin. This skin-first philosophy did notoriginate in the U.S. Instead, it was born on the other sideof the world, where skin care is a part of the culture. It’s where the latest skin careinnovations are concocted and where a large chunk of manufacturing happensin the first place. South Korea. Hi guys. It’s Charlotte. This is Charlotte Cho. She’s an entrepreneur, Korean beauty guruand the author of “The Little Book of Skin Care.” She started Soko Glam, an onlinemarketplace full of curated K-beauty products for U.S. consumers. I was born and raised in California. I didn’t know anything about skin care untilI started to live and work in Seoul, South Korea, and I wascompletely amazed at the product selection there was in Korea. And also the real focuson a skin-first philosophy. So, every woman and man in Korea itseemed really knew how to take care of their skin and at an early age. They had categories that just simplydid not exist in the U.S., so it was really intriguing to me andI saw results on my own skin. I firmly believe that K-beautycreated a skin care wave. They opened the door to innovations. They’ve allowed indie brands to come tothe forefront of a lot of the skin care trends. They’ve also widened the appetitefor new products, new categories. They’ve also been a big partof the education around skin care. South Korea’s cosmetics exports haveexploded in recent years. In 2014, exports were over 1.7 billion, and then in 2017, theyhad grown nearly 5 billion. Not only is South Korea a large exporterof beauty products, but is also a huge manufacturing hub, evenfor American brands. Local cosmetic production therewent from 8.5 billion dollars worth of goods in 2014 andgrew to more than 13 billion in 2017. I think the impact of K-beauty goesfar beyond just brands that are now introduced into thisglobal marketplace. It’s actually allowing Korean manufacturingcompanies to grow rapidly as well. For example, a lotof European brands and U.S.-based brands are formulating their productswith Korean R&D chemists and manufacturing plants. So, a lot of your favorite brands thatare not based in Korea, they are sourcing their innovations fromKorea as well. Now, when there’s an innovative product comingout of Europe, you have to check the back of the product andsee if it’s actually made in Korea. So while South Korea is continuing togrow as this hub of beauty innovation and creation, consumers are taking moretime to educate themselves about the ingredients in theproducts they are purchasing.The same way you mightcheck ingredients on food packaging. I think it was very important forAmerican consumers to be educated about skin care. It brought empowerment to the consumers andthey now know how to take care of their skin. The skin care boom owesa lot to social media. Think of all the selfies people take. People want to look good in theirphotos, wherever and whenever they take them. What’s more is skin care gurus andmakeup artists have become huge stars on platforms like YouTube and Instagram. Influencers and social media were key forKorean beauty to take off and for skin care to becomeat the forefront of beauty. It really took influencers explainingto their followers and their community why certain products wereincorporated into their routine and what impact it had on their skin. They loved showing what their skincare routines looked like on social. They loved sharing their shelfies, so theyhad rows and rows of their products displayed. At the same time that consumersare discovering more about different ingredients and learning about how totake care of their skin, more and more productsare flooding the market. Companies are strategically acquiring brands tostay on top of beauty market trends, like Unilever’s purchaseof Japanese skincare brand Tatcha for a possible $500 million. And, some companies are even spinningoff their existing cosmetic lines to include skin care.
Sephora has started theirown skin care line. Kylie Jenner launched Kylie Skin, andeven Amazon is offering its own line. Part of the reason? Skin care is a highermargin business than cosmetics. That means companies keep more ofthe profits when selling skin care products than makeup. For a very long time, makeup,traditional makeup brands were purely focused on color, but now they seethat American consumers are far more educated about skin care, and sothey’re here to capitalize on that market. Do I foresee that the category isgoing to go into decline anytime soon? I don’t believe so. It’s doing really, really well andit’s continuing to be the strongest performing category in2019 year-to-date. We believe there is going to continue tobe a lot of excitement around the skin care category at leastfor the next two years. Though the shift to thisskin-first, makeup-second philosophy is still expected to grow skin care industryrevenue for the next few years. The question remains — how does skincare continue to evolve in this market? I think there’s a lot of noise inthe space right now because there’s so many people rushing to market withtheir brands and their products. So, it really takes a lot ofeducation, continuous education about how they formulated the product, why it’s a trustedformula, what it’s going to do for their skin. At the end of the day,people want to see results.

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