Currently the market is estimated to be worth approximately $6.3bn, with market growth forecast to increase at a rate of 10 percent each year for the next three years, according to the Korea Pharmaceutical Traders Association (KTPA) and the Korea Cosmetics Association.
And with the retail landscape dominated by domestic cosmetic and personal care players, suggesting that there is room for lager international players to increase their footprint in the market.
According to the two trading associations, approximately 15 percent of the total market value is attributed to international players, with the majority of sales accounted for by European companies, followed by US companies.
Young affluent consumers are the primary target
In recent years the Korean economy has experienced robust growth and off the back of this, a younger generation of very affluent consumers has emerged, a group that is known to have very high level spending patterns, coupled with high product expectations.
All of this suggests plenty of potential for both entry and expansion into the market, but what are the specific categories or trends that companies should be looking out for?
The South Korean cosmetics and personal care market is extremely sophisticated and off the back of this, Sarah Chung, partner and co-founder of Luxe Brand Advisors, believes that what consumers want is highly functional and effective products.
“Products which help whiten the skin tone, minimize the appearance of wrinkles, protect the skin from UVA and UVB rays, stop hair loss are all seeing increased sales recently,” said Chung.
The Korean consumers are also said to be particularly receptive to skin care products with a differentiation, together with make-up and color cosmetic products with added benefits and functionality
“Korean men are also becoming significant consumers of cosmetics providing opportunities for cosmetics companies that feature men focused product lines,” Chung added.
Indeed, some of the boldest launches for the men’s care category worldwide have been seen in the Korean market, including dedicated make-up and cosmetic ranges, which is reflected by the fact that Euromonitor currently estimates the country’s male cosmetics market to be the largest in the world, with a value of $696m.
Although most of the largest international luxury brands – including Estee Lauder, Clinique, Lancome and La Prairie - there is still room for further expansion into new and emerging retail channels that is likely to open up the market to a wider array of brands.
"The big news is that with the growth of home shopping and online channels as viable sales avenues - smaller brands are able to get market traction,” said Chung.
"For example, Mario Badescu launched earlier this year and had very good results in home shopping and that's made it possible to grow in other areas,” she said, while adding her belief that more brands like this look set to take the stage in the coming months.
The Luxe Brand Advisor market report is entitled, Your Next Customer: Opportunities for Brands in Today’s Korea.