The Korean beauty care industry is turning its eyes to the Japanese market. It is a strategy to try to rebound by targeting Japan as an alternative market as its performance weakened due to a decline in the market share of Korean cosmetics in China.
LG Household and Health Care’s cumulative sales through the third quarter of 2023 were 5.2376 trillion won (US$3.9874 billion), down 2.6% year on year, and its operating profit was 423.3 billion won, down 25.8% year on year, according to the Financial Supervisory Service’s electronic disclosure system on Jan. 14. Amorepacific’s cumulative sales through the third quarter fell 9.3% year on year to 3.0033 trillion won and its operating profit plunged 36.8% to 193.3 billion won. This is due to the fact that its sales in China, its biggest foreign markets and its sales at duty-free shops did not recover from the pandemic.
As the Chinese cosmetics market continues to slump, the Korean cosmetics industry is turning its eyes to Japan, one of the world’s three largest cosmetics markets.
Currently, Japan is experiencing a boom in the popularity of Korean beauty care products due to the Korean Culture Wave. According to the Korea Customs Service’s import and export trade statistics, during the January-November period of 2023, Korean exports of beauty care, makeup, and basic cosmetics to Japan totaled 79.7 billion won, a whopping 219% increase from 2017. Last year, Japan’s imports of Korean cosmetics amounted to 77.5 billion yen (US$534 million), surpassing those from France for the first time.
As Japan has emerged as a new market, the Korean beauty care industry is stepping up its efforts to target the Japanese market by increasing the number of customized brands and offline pop-up stores for Japanese consumers.
LG Household and Health Care has recently been targeting the Japanese market by building brand awareness through online channels such as Qoo10 and Amazon. Currently, nine cosmetics brands and nine home care and daily beauty (HDB) brands are being sold in online channels in Japan. VDL, Glint by VDB, and Freshian have been well received by consumers in Japan. VDL, a Japan-only product in collaboration with beauty care YouTuber Company Employee J, saw its online sales in Japan surge 282% year on year within three months of its launch.
VDL’s online popularity is also expanding its offline presence. VDL has been inundated with requests from Japanese brick-and-mortar stores and is in talks with over 2,000 Japanese drugstores, including Matsumoto Kiyoshi, to supply its product to the Japanese market in the first half of this year. Freshian plans to expand its sales channels to offline stores by entering LOFT stores in Japan in February.
Following Etude, Innisfree, and Laneige, Amorepacific introduced Estra and Hera to the Japanese market. Aestura is currently available in more than 300 stores in Japan through major channels such as LOFT, Tokyu Hands, and @cosme.
Able C&C’s cosmetics brand A’pieu is also making big waves in Japan. Waterlock Finisher, a cushion fact product launched in Japan in May last year, has sold more than 110,000 units within six months of its launch. Able C&C plans to continue its popularity of Korean beauty care products by selecting Dahyun, a member of the popular idol group Twice, as its ad model.
CJ Olive Young is also focusing on expanding the Japanese market. The company entered Japan in 2019 with the launch of its private label brand at shopping mall Lumine, and its sales in Japan have been on the uptick, doubling on average over the past three years.