South Korean cosmetics companies such as LG Household & Health Care and AmorePacific are reducing their reliance on the Chinese market and aggressively increasing their market share in the United States.
According to statistics from the Korea Customs Service on April 15, the export amount of Korean cosmetics to the United States from April 1 to 10 was estimated to be 62.1 billion won (US$44.74 million). This represents an increase of 125.2 percent compared to the same period last year and 86.7 percent compared to the previous month.
Among the total export amount of cosmetics, the proportion exported to the United States reached a record high of 21.4 percent. This is comparable to China, which is the main export destination for domestic cosmetics companies, accounting for 22.0 percent of the total.
On the other hand, exports to the Chinese market are declining. The daily average export value of cosmetics overall in April increased by about 12 percent compared to the same period last year. However, the daily average export value to the Chinese market decreased by 35 percent during the same period.
Last year, the domestic cosmetics industry faced challenges due to poor performance resulting from the economic slowdown in China. LG Household & Health Care’s sales and operating profit last year were 6.8 trillion won and 487 billion won, respectively, marking a decrease of 5.3 percent and 31.5 percent compared to the previous year. Similarly, AmorePacific’s sales and operating profit last year stood at 4.02 trillion won and 152 billion won, respectively, showing a decrease of 10.5 percent and 44.1 percent during the same period. LG Household & Health Care’s performance showing negative growth is the first time in 18 years.
In addition, the growth of e-commerce platforms like Amazon has also been reported to have a positive impact. Kim Myung-joo, a researcher at Korea Investment & Securities, stated “During the COVID-19 period, American consumers began to encounter cost-effective Korean cosmetics through social media and are currently purchasing them through platforms like Amazon. The U.S. online market will continue to grow steadily, which is positive for the sale of Korean cosmetics, known for their cost-effectiveness.”
A cosmetics industry official explained, “With the spread of Hallyu culture, the popularity of K-pop is increasing, leading to a natural rise in interest in Korean cosmetics.”
