Asia Personal Care & Cosmetics Market Guide 2016

Personal Care & Cosmetics Products
Country Guide: South Korea
Executive Summary
South Korea is one of the world’s most exciting beauty markets. New beauty trends and innovations,
featuring sophisticated ingredients and aesthetically appealing packaging are constantly on display.
South Korean-branded cosmetics labels (K-beauty) have earned popularity, particularly within Asia, with
the rise of the country’s cultural presence, otherwise known as “hallyu,” and continue to attract imageconscious
local consumers and foreign tourists.
Korea is the 10 th largest cosmetics market in the world, representing nearly 2.9% of the global market.
In 2015, the size of the Korean cosmetics market was estimated to be approximately USD 7.6 billion; the
total local production and total exports increased 11.4% and 43.8% each from the previous year. The
market has been growing by an average rate of 6.7% for the past five years and is expected to grow
approximately 4-5% annually over the next three years.
Sales of premium end cosmetics in department stores and door-to-door channels were stagnant in 2015,
while duty free and on-line shopping grew considerably. Diversifying retail channels creates
opportunities for innovative brands to introduce trend-setting products.
Korean consumer buying habits are changing; focusing on purpose and functionality rather than brand
awareness. According to a survey in 2014, South Korean women, who follow multi-step skincare
routines involving cleansers, essences, and ampoules, use 27 cosmetics products per month on average
while Korean men use almost half of the number.
Cosmetics in Korea are regulated by the Ministry of Food and Drug Safety (MFDS) and fall under two
categories: functional cosmetics and regular cosmetics. Functional cosmetics, which currently comprise
whitening, anti-wrinkle, and sunscreen & tanning products, are expected to be extended to 11
categories including hair dye products and hair loss prevention cosmetics. MFDS reviews only functional
cosmetics for pre-market approval. For all other regular cosmetics, the Korea Pharmaceutical Traders
Association (KPTA) has been authorized by MFDS to review and certify import permission requests
submitted by the Korean importer.
According to industry sources, the growth of parallel imports and reduced tariff rates will contribute to
increasing demand for high-quality foreign cosmetics. U.S. exporters should note that remaining Korean
tariffs on imported U.S. cosmetics will be eliminated by 2022 under the KORUS FTA. These market
trends signal good opportunities for U.S. companies in the years ahead.
Overview of the Domestic Market
Size and Growth Trends in the Domestic Industry (Millions, $USD)