The number of cosmetics brands in South Korea has surpassed 30,000. The number of registered cosmetics distributors reached 31,524 last year, more than double the 15,707 in 2019. By November this year alone, over 4,600 new companies were established, and the number of brands they manage is estimated to exceed 30,000.
The rapid rise in cosmetics brands can be attributed to a highly competitive startup ecosystem. OEM (Original Equipment Manufacturing) and ODM (Original Development Manufacturing) systems have made it easier to produce cosmetics without owning factories. New businesses bring their ideas to advanced manufacturers to develop products that are then sold on platforms like Olive Young and Musinsa. The global K-beauty trend has further fueled growth, and South Korea’s cosmetics exports are expected to reach a record high this year.
Starting a cosmetics business can take as little as six months. Approval from the Ministry of Food and Drug Safety is required but can be completed in under ten days if the applicant meets certain qualifications, such as having a science degree, a cosmetics formulation manager certificate, or two years of experience in the industry.
The actual production is outsourced to specialized OEM and ODM firms. By providing the desired product details to cosmetics OEM and ODM companies, multiple samples are created based on specifications like functionality, formulation, and cost. Leading ODM firms like Cosmax and Kolmar Korea are experiencing record-breaking growth. Cosmax, ranked first globally in cosmetics ODM, achieved 1 trillion won in sales during the first half of this year and is on track to reach 2 trillion won by year-end. Its market share increased from 0.6% in 2022 to 0.8% last year. Another ODM company, Kolmar Korea, is also expected to reach 2 trillion won in sales this year, including its pharmaceutical and packaging businesses.
With the ease of launching a brand, small and medium-sized companies are leveraging unique ideas to expand internationally. Goodai Global’s brand Beauty of Joseon combines hanbang, traditional Korean herbal ingredients, with modern technology under the concept of “modern herbal beauty.” It exports to over 100 countries, including the U.S., Europe, and India, with products developed using the expertise of domestic ODM companies.
As small and medium-sized brands grow, K-beauty’s global influence is rising. Last year, South Korea’s cosmetics exports increased by 6.4%, reaching $8.5 billion, the second-highest record after $9.2 billion in 2021. Exports from January to September this year reached $7.4 billion, up 19.3% from the same period last year. The industry expects this year to set a new all-time high.
