"Inspried by Korean beauty (Inspired by K-Beauty)."
This is a phrase found on L'Oreal product packaging recently seen in London, UK. The world's largest cosmetics company, L'Oreal, has positioned K-Beauty as an inspiration for its product development. L'Oreal's Chief Executive Officer (CEO) has also acknowledged the growth of K-Beauty brands and is accelerating efforts to expand overseas operations.
According to industry sources on the 31st, L'Oreal CEO Nicolas Hieronimus stated during a Q3 earnings conference call on the 22nd (local time) that "the K-Beauty boom is a phenomenon actually taking place." He estimated that Korean skincare brands are showing an average growth rate of approximately 30%. He assessed that there is significant room for growth, as the market share of Korean brands in the global skincare market remains at around 3 to 4 percent.
CEO Hieronimus evaluated Korean skincare brands as "innovative, offering reasonable price ranges, and growing rapidly." Given that while growth rates are high, their share of the global market is still low, he determined that there is substantial potential for further growth. He emphasized that leveraging the growth of K-Beauty to expand business in Western markets is a critical task.
A representative way L'Oreal is responding to the growth of K-Beauty is by directly acquiring Korean brands to grow its overseas business. The color cosmetics brand 3CE and the skincare brand 'Dr.G' are prime examples. L'Oreal entered the Korean cosmetics market in earnest in 2018 by acquiring StyleNanda, which operates 3CE. Subsequently, it signed a contract in 2024 to acquire Gowoonsesang Cosmetics, which operates Dr.G, and completed the acquisition last year. This expanded its portfolio of Korean brands, which had been centered on color cosmetics, to include skincare.
Dr.G is a case where L'Oreal aims to reflect the growth speed of K-Beauty in its overseas business. CEO Hieronimus revealed that he has instructed to accelerate Dr.G's overseas expansion. He stated, "K-Beauty is a race against time, so I asked all stakeholders to increase the pace," adding, "Whether we can leverage this K-Beauty boom in Western markets as well is an important task, and this is one of Dr.G's goals."
Dr.G has re-entered the Chinese market and also entered the Southeast Asian market. In the United States, it began sales through TikTok Shop and plans to gradually expand its offline distribution network in the future. This is a strategy to broaden touchpoints with local consumers through online channels before expanding its sales base into offline channels.
3CE, which joined L'Oreal in 2018, is also contributing to the expansion of overseas business. In this earnings release, L'Oreal stated that 3CE's local business expansion has contributed to the growth of color cosmetics in emerging markets, including Southeast Asia. This means Korean brands are not only broadening their reach to overseas consumers by leveraging L'Oreal's global distribution network but also supporting the growth of local markets.
The trend of global cosmetics companies going beyond acquiring Korean brands to leverage the competitiveness of K-Beauty in product development and overseas business strategies is becoming increasingly distinct. This is because rapid product development and reasonable pricing, cited as strengths of Korean cosmetics, are acting as competitive factors in the global market.
A beauty industry official said, "As K-Beauty gains popularity overseas, global companies are closely watching the growth potential and product competitiveness of Korean brands," adding, "Movements to broaden business opportunities in the global market by directly nurturing Korean brands or utilizing local distribution networks will continue."
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