The Beijing-based Economic Observer has reported that the Korean lifestyle has been popularized in China by TV shows, leading to a knock-on effect: the uptake of Korean beauty brands by Chinese consumers.
A source speaking to the paper reportedly stated; "While most European and US cosmetics brands performed badly last year, Korean cosmetics reversed the market trend to grow sharply."
Pop culture effect
Exports of South Korean cosmetics grew to $1.87 bn during 2014, which represented an increase of 52% compared to the previous year, according to government statistics, with China singled out as the major destination.
Coupled with the upcoming Korea-China free trade agreement which is set to come into effect soon, this TV-fuelled popularity means that China is set to become a very lucrative market space for Korean brands.
One particularly high profile Korean show taking China by storm, translated title ‘My Love from the Star’, has reportedly pulled in more than 2.5 million views online, rushing to the top of the country’s most-viewed charts.
Shows like this are having a major influence on the buying habits of Chinese consumers, with The Washington Post recently reporting that the show’s female lead mentioning the words “beer and fried chicken” in one episode resulted in it becoming one of the most used phrases online. Restaurants were quick to capitalise and offer the items as a menu option.
Acquisition ahead
On the back of this booming demand, negotiations are underway between beauty companies looking to cash in.
The Carlyle Group, a major private equity fund, has reportedly set its eyes on It’s Skin, a budget Korean cosmetic brand tipped for growth. The global equity fund is offering around 2 trillion won ($1.97 billion) for the deal, according to media reports.
“Carlyle has been interested in the Korean cosmetics market due to the soaring demand among Chinese customers,” a source was quoted as saying to Money Today newspaper.