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   [U.S. Commercial Service] Leading Sectors for US Exports & Investments- Korea

게시판 뷰페이지
Writer : Admin Date : 2018-02-21 Hit : 241

Korea - Cosmetics

This is a best prospect industry sector for this country. Includes a market overview and trade data.


Last Published: 6/19/2017

ITA CODE: COS

Overview


Market Size - Cosmetics
                                                                                           2013 2014   2015 2016 (E)
Total Market Size 6,963 7,759  7,981   7,160
Total Local Production 7,280 8,511 9,481 10,258
Total Exports 1,290 1,799 2,586   4,178
Total Imports 972 1,047 1,089   1,080
Imports from the U.S. 285 323    316      293
 
Exchange Rate:  USD1=KW 1,126 (2012); 1,095 (2013); 1,054 (2014); 1,132 (2015); 1,161 (2016)
Sources: Korea Pharmaceutical Traders Association (KPTA), Korea Cosmetic Association (KCA)
Unit:USD million

Total market size:Total local production – total exports + total imports 


South Korea is the 8th largest cosmetics market in the world, representing nearly 3.0% of the global market.  In 2016, the market size was estimated to be approximately USD 7.1 billion; the total local production and total exports increased approximately 8.2% and 61.6%, respectively, from the previous year.  The market has grown at an annual growth rate of 8.2% for the last five years.

Meanwhile, total imports of cosmetics in 2016 maintained last year’s level, valued at USD 1.08 billion.  U.S. imports accounted for 27.1% of total market share, valued at USD 293 million.  On a country basis, France (USD 293.8 million) and the U.S. (USD 293.4 million) are the leading exporters to Korea, followed by Japan (USD 170.5 million) and Italy (USD 47.5 million).
According to Korea Customs Service statistics, skincare cosmetics continue to be the largest import category, at 49.1% (USD 704 million) of total cosmetics imports in 2016.  Haircare products, makeup cosmetics, and perfumes/scents accounted for 14.4%, 12.5%, and 11.2%, respectively, of the total import market.

There is a large variety of products in the marketplace.  Competitive imports differentiate themselves from existing offerings through brand identity, packaging, unique formulations, and quality ingredients.  U.S. brands generally have a good reputation for their technologically-advanced product formulations and product safety.  A cosmetics survey (2015) conducted by local cosmetics newspaper CMN and research institute Kantar World Panel revealed that American cosmetics brands, such as MAC, Bobby Brown, Estee Lauder, Maybelline, Neutrogena, Aveeno, and Cetaphil, were ranked as the top brands.  Products included in these brands include foundation, eyeshadow, lipstick, mascara, and body care products.

Imported cosmetics are primarily sold through department stores (24.3%), brand shops (23.0%), online shopping malls (18.9%), multi-level marketing (8.9%), hypermarkets (7.2%), specialty stores (6.9%), home shopping channels (3.4%), and duty free shops (3.2%).

Strong potential subsectors for U.S. exporters to South Korea include cosmeceuticals, derma-cosmetics, and natural/organic cosmetics.  Industry insiders expect that the market for cosmetics products which feature dermatological benefits will continue to grow, especially the concept of preventative care.  In addition, ceramide cosmetics and anti-pollution cosmetics are expected to experience solid growth.  When it comes to natural/organic cosmetics, Korean consumers tend to check not only natural/organic ingredients, but also ‘fair trade’ and ‘country of origin’ labelling on product labels. 

In South Korea, cosmetics are regulated by the Ministry of Food and Drug Safety (MFDS). Cosmetics fall under two categories: functional cosmetics and regular cosmetics.  Functional cosmetics, which currently comprise whitening, anti-wrinkle, and sunscreen & tanning products, are expected to be extended to 11 categories by the MFDA, including hair colorants, hair nutrients, and cosmetics which help protect damaged skin.  

MFDS reviews only functional cosmetics for pre-market approval.  For all other regular cosmetics, the Korea Pharmaceutical Traders Association (KPTA) has been authorized by MFDS to review and certify import permission requests submitted by the Korean importer.  As of 2015, 1,024 firms were registered as cosmetics importers.  Among them, 715 were agents/distributors and 134 were branch offices.  A qualified Korean representative is critical to successfully penetrating the market, for two reasons.  First, Korean distributors know their customers and competitors well and can monitor market changes. Second, the importer/distributor of the foreign supplier must submit the required documents to MFDS or KPTA to obtain pre-market licenses.

Under the U.S.–Korea Free Trade Agreement (KORUS FTA), implemented in March 2012, tariffs on imported cosmetics have been reduced.  Remaining Korean tariffs on imported U.S. cosmetics will be completely eliminated over a ten-year period.  This development signals good opportunities for U.S. companies in the years ahead.


Best Prospects                                                                     

  • Convergence of cosmetics and pharmaceutical/cosmeceutical products
  • Crossover/multi-functional products
  • Functional cosmetics – especially anti-aging and anti-oxidation
  • Natural/organic skincare products


Opportunities                                                                              

E-commerce channels, drug stores, and television home-shopping channels are becoming increasingly popular for consumers to purchase cosmetics products.  Duty-free shops and select shops are challenging traditional retail channels, like direct selling, multi-level marketing, "mom and pop" stores, department stores, and discount stores.

Due to an increase of internet and mobile users, on-line shopping malls and social media have been making rapid inroads as key marketing channels.  South Korea stands out as the country with the highest smartphone ownership rate/broadband penetration rate and the fastest average internet speed.  Sales via mobile shopping have increased dramatically in recent years.  Of total online shopping, the percentage of mobile shopping has jumped from 17.0% in 2013 to 45.4% in 2015.  This trend reflects the new shopping trend which involves consumers who “window shop” offline and then purchase online.
 


Resources                                                                                          

Trade Shows
Seoul Cosmetics & Beauty Expo 2018

Key Contacts
Ministry of Food and Drug Safety (MFDS)
Korea Pharmaceutical Traders Association (KPTA)
Korea Cosmetic Association (KCA)



Source: https://www.export.gov/article?id=Korea-Cosmetics