SEOUL, Nov. 24 (Korea Bizwire) — A variety of businesses from various sectors are making forays into the cosmetics market with entry barriers dropping, amid expectations that they could create a synergy effect through combination with their existing businesses.
According to the Ministry of Food and Drug Safety, the number of cosmetics sellers that acquired the approval for distribution of cosmetics stood at 19,769 last year, about a threefold increase from 6,422 in 2015.
During the same period, the number of cosmetics makers also doubled from 2,017 to 4,071.
Game developer Netmarble Corp. released its own cosmetics brand V&A Beauty last month.
More than 120,000 units of a lip tint released by BrandX Corp, which is famous for its leggings brand XEXYMIX, have already been sold.
The booming release of cosmetics brands is spreading even in the pharmaceutical and fashion industries.
Dongwha Pharmaceutical released a functional cosmetics product Fusid Cream last month, while Hyundai Department Store Group’s Handsome launched high-end cosmetics brand OERA in August.
The primary factor behind the surge in the number of cosmetics brands is the low entry barriers.
In particular, since there are world-class original design manufacturers (ODM) such as Kolmar Korea and Cosmax present in the local market, cosmetics companies can produce their own products even without having their own R&D organizations or manufacturing facilities.
Another factor is lower distribution burdens thanks to the expansion of the online market.
Unlike in the past when it was difficult to secure offline sales outlets, cosmetics brands can build up their brand awareness by selling their products online first and then expanding into offline retailers such as Olive Young.
In particular, color cosmetics brands are now actively relying on YouTube and live commerce for PR activities, since it has become difficult to provide in-store product testing due to the COVID-19 pandemic.
The influence of famous cosmetics brands has weakened due to the emergence of a string of cosmetics review apps that make it easier for users to compare cosmetics brands.
J. S. Shin (firstname.lastname@example.org)