South Korean beauty giant LG Household & Health Care will launch an exclusive cosmetics line for Daiso, the popular Korean “1,000-won shop” akin to dollar store chains in the U.S. This marks the first collaboration between Daiso, which primarily sells products from small and medium-sized brands, and one of Korea’s two largest cosmetics companies.
Daiso announced on July 4 that the retailer partnered with LG H&H to launch the Daiso-exclusive Pure Derma body lotion products in April and the Care Zone pore-minimizing products last month. Both products are priced at 5,000 won ($3.7).
Industry experts say Daiso opened a new chapter in the domestic beauty industry by joining forces with LG H&H. Daiso had previously partnered with small and medium-sized brands, often leading to frequent stockouts of popular products due to insufficient production. By collaborating with a major company with guaranteed product quality and production capacity, these problems are expected to decrease.
Daiso has been offering a wide range of ultra-cheap cosmetics since 2022. The retailer sells beauty products in six price ranges, from 500 won to 5,000 won. Daiso’s beauty section is popular among teens and Gen Z as it offers affordable products from brands such as Nature Republic, Danahan, Clio, and VT Comestics. Daiso’s skincare and color cosmetics sales rose by 85% last year.
The product that established Daiso’s presence in the beauty market is VT Comestics’ Reedle Shot. Reedle Shot is a skincare booster that hydrates the skin using microneedling technology. It gained popularity word-of-mouth because it provides effects similar to those received by dermatological procedures.
Daiso sold this exclusive product for 3,000 won, less than half the price of the Reedle Shot product sold at CJ Olive Young, Korea’s largest beauty retailer, leading to the product selling out. VT Cosmetics recorded sales of 101.8 billion won, and an operating profit of 24 billion won in the first quarter of this year, up 112.6% and 3779.5%, respectively, from the same period last year.
Recently, Son&Park’s three “Arti Spread Color Balm” lip and cheek products, which went viral on social media for being a cheaper duplicate of Chanel’s lip balm products, also sold out.
Daiso’s sales are expected to surpass the 4 trillion won mark, boosted by growth in the beauty sector. Last year, Daiso posted 3.4605 trillion won in sales, up 17.5% from the previous year, just four years after surpassing the 2 trillion won threshold. Operating profit increased by 9.4% during the same period, reaching 261.7 billion won.
Many industry insiders believe that Daiso could become Olive Young’s sole competitor in the beauty retail sector. “Daiso is rapidly expanding its range of cosmetic products, and consumers perceive the product quality to be excellent given low prices,” said a beauty industry insider. “In an era of soaring living costs, Daiso is an attractive channel for both consumers and brands.”
