South Korean cosmetics are making significant inroads into the US, the world’s largest beauty market, leading to a sharp rise in dealmaking activity among the country’s personal care startups.
Seoul, long regarded as a global hub for beauty and skincare, became the top exporter of cosmetics to the US last year, surpassing France, according to the US International Trade Commission, reported Bloomberg. South Korea’s total cosmetics exports hit a record $10.2 billion in 2024, up from $7.5 billion in 2020, according to the Korean Food Ministry.
This rapid growth drew interest from major players, including L’Oréal SA and Archimed SAS, as the sector witnessed a record 18 deals worth 2.3 trillion won ($1.6 billion) in 2024. While the total value of deals remained lower than previous years, the pace of activity led some advisory firms to predict continued momentum.
“Private equity funds are paying more attention to Korean cosmetics,” said Manhwi Han, a deal partner at advisory MMP. “Given the strong growth of exports in the US, we expect the M&A boom will definitely continue this year.”
K-Culture’s Influence on Cosmetics Expansion
The surge in investment is widely attributed to the global influence of Korean pop culture, which has propelled the cosmetics industry alongside the booming K-food and K-drama sectors. Product placements in hit shows played a key role in marketing everything from $22.99 stick balms to $2,350 LED face masks, with the US emerging as the primary target market, the report noted.
French investment firm Archimed acquired aesthetic skincare technology company Jeisys Medical Inc. in 2023, a brand promoted by Korean actress Lee Young Ae. Meanwhile, local private equity firm KL & Partners is reportedly eyeing a stake in Manyo Factory, known for its serum featured in the popular drama Crash Landing on You.
South Korean brands now account for approximately 22 per cent of imported cosmetics in the US and hold a 40 per cent share in Japan, the report said citing Eun-jung Park, an analyst at Seoul-based Hana Securities Co.
One standout success is COSRX Inc., which was acquired by Amorepacific Corp. in October 2023. The company generates nearly 60 per cent of its revenue from the US and Europe, with its snail essence facial serum ranking as Amazon.com’s No. 1 bestseller in its category.
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US Market Becomes Prime Focus
The shifting focus of South Korean beauty brands toward the US comes as demand in China weakens. Brands have capitalised on digital marketing strategies via TikTok and Reddit, while also forging partnerships with major retailers such as Costco Wholesale Corp. and Amazon.com Inc.
A TikTok and Kantar study from last year projected that global spending on Korean cultural products will nearly double to $143 billion by 2030, further boosting the outlook for South Korea’s cosmetics industry.
This optimism contrasts with challenges faced by global beauty giants like Estée Lauder Co., which forecasted a decline in net sales for the current quarter, and Japan’s Shiseido Co., which is struggling with sluggish demand from China.
In response to rising North American demand, South Korean personal care manufacturer Kolmar Korea Co. is gearing up to open its second US plant, the news agency reported.
Meanwhile, CJ Olive Young, often dubbed South Korea’s equivalent of Sephora with 1,400 domestic stores, is actively advising local startups on marketing strategies to enhance their retail presence. The company is also planning to open its first US store following a 140 per cent surge in sales to foreign travelers in 2024.
