Bifurcation in cosmetic consumption has become increasingly pronounced as inflation continues to squeeze household budgets. (Image courtesy of Yonhap)
SEOUL, Nov. 26 (Korea Bizwire) – “All cosmetic samples for just 10,000 won.” Such listings have become increasingly common on Danggeun Market, South Korea’s popular secondhand trading platform, reflecting a growing divide in the nation’s beauty market amid persistent inflation.
While some consumers hunt for bargain cosmetics and sample-size products, others flock to luxury brands like Prada Beauty, which opened its first South Korean store in August despite economic headwinds. The contrast illustrates the stark polarization of consumption patterns in one of the world’s most beauty-obsessed markets.
According to industry experts, this bifurcation in cosmetic consumption has become increasingly pronounced as inflation continues to squeeze household budgets.
At one end of the spectrum, teenagers and budget-conscious consumers are driving demand for affordable alternatives. Daiso, a discount retailer, has seen dramatic growth in its beauty segment, with sales of basic skincare products surging 240% and makeup products increasing 130% through October compared to the same period last year.
“Teenagers are currently driving cosmetic trends,” said an industry insider, who spoke on condition of anonymity.
“They’re particularly price-sensitive given their reliance on allowances, with even 1,000 to 2,000 won differences affecting their purchasing decisions. Unlike older consumers, they show little brand loyalty and will flock to products that gain a reputation for good quality at low prices.”
Major Korean cosmetics companies have taken notice. Industry giants like Amore Pacific, LG Household & Health Care, and Aekyung Industrial are now supplying products priced under 5,000 won to Daiso. Even convenience stores have joined the trend, with GS25 offering 700-won face masks and CU launching 3,000-won basic skincare items.
However, the luxury segment tells a different story. Lotte Department Store, Shinsegae Department Store and Hyundai Department store have all seen double-digit increases in sales of luxury cosmetics this year.
Capitalizing on this robust demand for luxury beauty products, Prada Beauty’s August launch drew 1,200 visitors daily to its pop-up store, despite pricing its products above established premium brands like Lancôme and Estée Lauder.
“Economic downturns and high inflation typically intensify consumption polarization, and we’re seeing this clearly in cosmetics,” said Lee Eun-hee, a consumer economics professor at Inha University.
“While teenagers and the working class gravitate toward extremely affordable products, premium consumers continue to seek high-end items. This polarization is likely to persist as long as consumers continue to feel economic pressure.”
The trend has prompted traditional retailers to adapt. Coupang, South Korea’s largest e-commerce platform, recently launched R.LUX, a specialized delivery service for luxury beauty brands like Estée Lauder and René Furterer, betting on the continued growth of the premium segment despite economic uncertainties.
Even mid-range brands are pursuing dual strategies. Shinsegae International’s house brand Yunjac introduced Alphanax, a premium skincare line exclusively for department stores, priced at twice its regular products and featuring patented anti-aging ingredients.
Lina Jang (linajang@koreabizwire.com)
