With average growth of 9% year-on-year since 2008, the Korean skin care and the cosmetics industry remains a beacon in the Asian market.
Within this, domestic players are reported to be outmaneuvering their global rivals with product and packaging innovation and creative use of Korean celebrities to drive awareness and relevance.
Since launching its Air Cushion line in 2008, AmorePacific owned lope registered 100 billion KRW ($100 million) in sales in 2013.
This local advantage extends online with the brand averaging the highest digital IQ of all conglomerates, and local brands captured seven of the top 10 spots in L2's Index.
Connected
According to the report, South Korea is a formidable e-commerce market, around 80% of the population is online, and the region boasts some of the world’s fastest Internet speeds.
With a per capita GDP of $34,777, Korean consumers spend an average of $1,050 online per year and online beauty sales in South Korea account for 9% of the total market, on par with the U.S. but just half that of China.
E-tailers also play a critical role in Korea, as more brands link to third party etailers (42%) than sell direct (36%) in the country.
KakaoTalk boasts nearly three times as much as Facebook’s users
Local social mobile platform KakaoTalk boasts 35 million Korean users, nearly three times Facebook’s 13 million.
Beauty brands average 413,559 fans on KakaoTalk, nearly four times that of their Korean Facebook pages. The Korean search engine market is also dominated by homegrown players, Naver 83%, and Daum 13% rendering Google irrelevant 1%.
However, Facebook still remains the most popular social platform among beauty brands in South Korea with 72% active on the platform, followed by YouTube with 63% and less than one third of brands are active on local social media platforms.
On average the monthly search volume on Naver for local beauty brands is three times that of their global counterparts.
Smart phone is king
Finally the index reveals South Korea to be leading smart phone penetration with 70% of mobile phone owners using a smartphone as of June 2014. 48% of online Korean shoppers prefer to make purchases on mobile devices, four percentage points greater than the global average.
Mobile searches account for 61% of brand term searches and 78% of beauty brand sites are mobile optimized, besting optimization in Japan and the US.
However, L2 says brands have not taken full advantage of m-commerce in Korea with fewer than half providing e-commerce through their mobile sites, compared to 78% on desktop sites.