'Godseongbi' K-Beauty Craze... Retail Industry Boosted by Makeup Effects

Domestic distribution companies are strengthening their cosmetics business. As K-beauty gains significant attention in domestic and international markets, convenience stores, e-commerce, and fashion companies are partnering with indie beauty brands to target consumers.

According to the distribution industry on the 6th, GS25, a convenience store operated by GS Retail, has introduced basic skincare products made by the specialized skincare brand Dewytree and Mediheal at all stores since the beginning of this month.

All products are priced under 10,000 KRW. Dewytree's multi-cream is priced at 5,000 KRW, serum at 7,000 KRW, and mask packs at 700 KRW, while Mediheal's pads are set at 1,000 KRW. Since the core customer base of convenience stores, the 10s and 20s age groups, are enthusiastic about Daiso cosmetics priced under 5,000 KRW, the strategy is to establish convenience stores as a new beauty purchasing channel by combining cost-effectiveness with accessibility. A GS25 representative explained, "Along with the urgent demand for cosmetics, we are offering reasonably priced products that will grow into a new cosmetics purchasing channel for teenagers and people in their twenties."

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The model is introducing basic skincare products sold at GS25.
[Photo by GS25]

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In fact, GS25's basic skincare product sales growth rate has reached 65% this year. After a 35.5% increase in 2022, the growth rate was 54.1% last year, showing double-digit growth every year. The growth rate in the first half of this year is expected to be even higher. Until now, convenience stores only sold lip balms or travel cleansing products, but recently, with the addition of mask packs, skin, and lotion products, sales volume has significantly increased.

Fashion company Shinsegae International also announced on the 2nd that it will acquire the vegan beauty brand 'Amuse,' known for the 'Jang Wonyoung Tint.' This is the first time a fashion company operates a popular brand with high recognition among the MZ generation (Millennials + Generation Z). Amuse is popular in North America, Japan, and Southeast Asia, the world's largest cosmetics markets. Its representative products are tint and cushion, which are color cosmetics. Last year, its annual sales were 36.8 billion KRW, and it earned 25.4 billion KRW in the first half of this year alone, already achieving 70% of last year's sales. Shinsegae International plans to increase Amuse's sales to 200 billion KRW within the next four years.

Previously, Shinsegae International targeted the beauty market by launching luxury cosmetics brands such as Yeonjak, Swiss Perfection, and Poiret to overcome the limitations of the overseas fashion brand business, which is subject to economic fluctuations. As a result, the beauty sales ratio, which was around 23% in 2022, expanded to 33% in the first quarter of this year. The acquisition of Amuse is interpreted as a determination to further boost cosmetics sales amid the explosive growth of K-beauty in the global market.

In particular, as indie brands (small and medium-sized enterprises) like Amuse have shown remarkable progress among K-beauty companies in the global cosmetics market, the strategy is to capture both luxury cosmetics and cost-effective demand. According to the export trends of small and medium-sized enterprises in the first half of this year, cosmetics are the top export item for SMEs. The export amount reached 3.3 billion USD (4.5 trillion KRW), a 30.8% increase from the previous year, marking a record high.

Lotte Shopping's e-commerce platform Lotte ON launched an exclusive beauty brand, 'Quarter Note,' in April. The products were planned together with BVM T, a cosmetics manufacturer famous for the 'Go Hyun-jung Mist.' Until now, Lotte ON focused on luxury beauty products composed of premium cosmetics and mobilized related personnel such as beauty merchandisers (MDs), but as indie brands have shown rapid growth, they expanded their product lineup with beauty products that fit the trend. Early last month, they also newly established a Trend Beauty Team to source beauty products with high popularity.

Quarter Note's products consist of 'Shading Tattoo,' which gives a contouring effect to the face, and 'Highlighter,' which provides a bright glow. Reviews stating that the products do not deteriorate even after water activities have increased sales significantly. Last month, Quarter Note's sales grew by 65% compared to the previous month. Beauty MD Jung Yeoul explained, "We will launch Season 2 products of the Quarter Note brand in the second half of this year."

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