Exports from January to September amounted to $11.1 billion, an increase of 31.1%... Basic cosmetics surged 45.1% to $8.7 billion, solidifying the U.S. as the largest market and spreading to Europe... ODM, brand, and distribution companies also grow overseas
This year's K-beauty exports set a new record, approaching last year's annual performance in just 9 months. With the United States becoming the largest export market and sales areas expanding to Europe and North America, basic cosmetics were found to be leading the overall growth by product.
According to the Ministry of Food and Drug Safety, domestic cosmetics exports from January to September this year amounted to $11.1 billion, an increase of 31.1% compared to the same period last year. It is the largest in history based on the cumulative third quarter, and is close to last year's annual export amount of $11.4 billion in just 9 months.
Basic cosmetics worth $8.7 billion... Driving export growth
The growth trends for each item were clearly mixed.
Basic cosmetics exports amounted to $8.72 billion, an increase of $2.71 billion compared to the same period last year. The increase rate reaches 45.1%.
On the other hand, color cosmetics exports decreased by 3.6% compared to the same period last year to $1.11 billion. Products for body cleansing increased by 30.1% to $560 million.
While overall cosmetics exports increased by 31.1%, basic cosmetics recorded a growth rate that far exceeded this, while color cosmetics decreased. This shows that K-beauty's overseas growth is focused on basic cosmetics, including skin care, rather than being the same across all products.
Solidified as the largest market in the U.S. and spread to Europe and North America
By country, the United States remained the largest market.
Cosmetics exports to the United States from January to September this year amounted to $2.349 billion, an increase of 40.6% compared to the same period last year. This corresponds to 21.1% of total cosmetics exports.
It was basic cosmetics that led to the growth of the U.S. market. Basic cosmetics exports to the United States increased by 48.8% from $1.21 billion in the same period last year to $1.8 billion this year. The increase is $590 million.
The total export amount by country was the United States, followed by China with $1.581 billion and Japan with $889 million. Total exports to China increased by 0.4% and to Japan by 8.6% compared to the same period last year.
Growth in regions outside of existing major markets was even steeper. Exports to the UK increased by 179.3% to $443 million compared to the same period last year, to the Netherlands by 292.6% to $369 million, to Poland by 58.6% to $322 million, and to Canada by 124.4% to $285 million.
Export growth, spread to ODM, brand, and distribution
The expansion of K-beauty exports is also visible in the performance and business strategies of related companies.
Cosmax (192820), a cosmetics ODM, recorded consolidated sales of KRW 1.4769 trillion in the first half of this year, an increase of approximately 22% compared to the same period last year, and operating profit increased by 13% to KRW 126.8 billion. In the second quarter, the U.S. subsidiary turned a profit.
Kolmar Korea (161890) is expanding its local production base in the United States. The second U.S. factory has an annual production capacity of 120 million units, focusing on skin care and sun care products, and the entire U.S. production capacity, including the existing first factory, is approximately 300 million units per year.
Unlike the existing first factory, which focuses on color tone, the second factory focuses on producing basic skin care and sun care products. As demand for basic cosmetics is rapidly increasing in the United States, the locally produced product line has also expanded to focus on skin care and sun care.
The overseas growth of brand companies is also continuing.
APR (278470) recorded consolidated sales of 1.36 trillion won in the first half of this year. Overseas sales have expanded, centering on Medicube, and sales channels are expanding in the European market following the United States.
Dalva Global (483650) recorded consolidated sales of 358.1 billion won in the first half of this year, up 47.9% from the same period last year, and operating profit increased 55.8% to 92.3 billion won. Export sales increased by 79% compared to the same period last year, and the share of exports in total sales also increased to 72%.
The expansion of K-beauty brands into overseas markets is also reflected in the performance of distribution companies.
Silicon Two (257720)'s consolidated sales in the first half of this year were 749.1 billion won, an increase of 46.6% compared to the same period last year, and operating profit was 147.5 billion won, an increase of 47.6%. By region, sales in the EU increased by 68.7% and in the US by 67.6%.
Different K-beauty growth axes for each company
The growth drivers of each company differ depending on the business structure. The main growth axes for Cosmax and Kolmar Korea are ODM and local production, APR and Dalba Global are selling overseas brands, and Silicon Two is expanding its global distribution network.
#### As export markets and items are diversifying at the same time, cosmetics companies are also expected to see performance differentiation based on their main products and regional sales structure rather than the simple 'K-beauty' theme.
