"Foreigners Rushed to Buy What Koreans Use"... K-Beauty ODM No. 1 Decided by Overseas Performance

ODM Big 3 Ride K-Beauty Wave to Record-High Results

Cosmax Leads in Pure Cosmetics ODM Revenue

Gap with Kolmar Korea Widens as U.S. and China Results Make the Difference

Cosmax and Cosmecca Korea Expand Production Bases in Europe and

Riding the global K-beauty wave, South Korea’s top three original design manufacturers (ODMs) in the cosmetics industry have all reported record-breaking results. The global expansion of K-beauty and the strong performance of indie brands have served as common drivers. However, a closer look at the numbers reveals distinct differences in growth momentum and overall strength, with many attributing the widening gap to overseas performance.

According to the cosmetics industry on March 4, Cosmax posted consolidated sales of KRW 2.3988 trillion and operating profit of KRW 195.8 billion last year. These represent increases of 10.7% and 11.6% from the previous year, respectively, both marking all-time highs for the company.

In terms of scale, Kolmar Korea surpassed Cosmax with sales of KRW 2.7224 trillion and operating profit of KRW 239.6 billion. However, after excluding sales from HK Inno.N, its biohealth subsidiary (KRW 1.0632 trillion), and Yonwoo, its cosmetics packaging manufacturer (KRW 250.9 billion), the pure cosmetics ODM business recorded sales of only KRW 1.4399 trillion. Cosmax leads Kolmar Korea by approximately KRW 1 trillion. This is why Cosmax is regarded as having a competitive edge in the core cosmetics ODM business.

The gap between Cosmax and Kolmar Korea, the first and second largest players, widened further this year after growing last year. Last year, Kolmar Korea’s pure cosmetics ODM sales reached KRW 1.2795 trillion, while Cosmax’s amounted to KRW 2.1661 trillion, a difference of KRW 886.6 billion. This year, the gap expanded to KRW 958.9 billion, cementing Cosmax’s position as the leading K-beauty ODM.

The difference between Cosmax and Kolmar Korea was most evident in their overseas subsidiaries. Cosmax performed well in both its largest markets, the United States and China, whereas Kolmar Korea’s performance was relatively lackluster. Cosmax’s China subsidiary posted annual sales of KRW 632.7 billion last year, a 10.2% increase from the previous year, while Kolmar Korea’s China sales rose only 1.7% to KRW 156.3 billion during the same period.

The same trend appeared in North America. Although Cosmax’s U.S. subsidiary saw a slight year-on-year decline to KRW 132.6 billion last year, its fourth-quarter sales surged 24.2% compared to the previous year, marking a turnaround. In contrast, Kolmar Korea’s U.S. and Canadian subsidiaries recorded KRW 54.9 billion and KRW 35.9 billion, respectively, down 5.3% and 8.9% year-on-year. For the fourth quarter alone, U.S. sales dropped by 66.4% and 7.7% compared to the previous year. Additionally, Cosmax is pursuing a strategy of expanding its influence into emerging markets such as the Middle East, South America, and Africa.

Seungeun Lee, a researcher at Yuanta Securities, commented, "Kolmar Korea has set a first-quarter sales guidance of 20% year-on-year growth, most of which is expected to come from domestic growth. Its U.S. subsidiary is guiding for annual sales of KRW 60 billion and an operating loss of KRW 15 billion." She added, "While solid domestic growth is expected to offset losses at overseas subsidiaries, a turnaround in the U.S. market should be approached from a mid- to long-term perspective."

Cosmecca Korea, while ranked third in scale, stood out for its robust growth. Last year, the company posted sales of KRW 640.6 billion and operating profit of KRW 83.4 billion, up 22.2% and 38.1%, respectively, both record highs. Although its scale lags behind the top two, its operating profit growth rate of 13% was the highest among ODM companies. The company’s performance was driven by global expansion of K-beauty indie clients, growth in its North American business, and improved cost structure through production efficiency. Notably, all three production bases—in Korea, the United States, and China—achieved both sales growth and profitability, contributing to this record performance.

The next steps following these record results are drawing attention. Both Cosmax and Cosmecca Korea are accelerating their overseas strategies by expanding production bases in Europe and the United States, respectively. Cosmax recently announced plans to acquire a 51% stake in Italian cosmetics ODM company Cheminova, aiming to strengthen its global market influence by securing a European production base. Cosmecca Korea is increasing its stake in its U.S. subsidiary Englewood Lab from 50% to 66.7%, accelerating its push into the North American market.

Researcher Lee noted, "Cheminova, which Cosmax has acquired, posted sales of approximately KRW 18 billion last year, and its sales are expected to be recognized in the second or third quarter this year." She added, "The mid- to long-term growth strategy, including entry into the European premium skincare market through the acquisition of Cheminova, is also a positive development."

This content was produced with the assistance of AI translation services.