‘Ingredient-led beauty’ is leading the way

Euromonitor announces key highlights of the beauty & personal care market in 2023

‘Ingredient-led beauty’ has been noted as one of the positioning strategies that help K-Beauty secure the choice of global consumers in the beauty market. In addition, a survey showed that in 2023, the proportion of online beauty and personal care purchases in Korea accounted for 59%, the highest among global countries.

?

‘Ingredient-centered beauty’ continues to be a key factor of K-beauty popularity

According to the 2023 beauty & personal care market analysis published on August 8 by global market research company Euromonitor International (Korea Branch Manager Choi Seung-yong), K-beauty is becoming popular again due to the product power of providing various functions and the revival of K content. And ‘ingredient-led beauty' is attracting attention as one of the positionings that can solidify the choice of global consumers in the beauty market.

The beauty industry has continued to make efforts to persuade consumers who want to check not only the characteristics of raw materials but also the entire process of product creation, including product manufacturing and distribution. The journey started with clean beauty, which emphasizes clean and safe ingredients, and continued with ‘conscious beauty,’ which refers to conscious beauty consumption that requires brands and products to fulfill their ethical responsibilities and obligations. It has developed into ingredient-centered beauty, which is the biggest stem leading the global beauty market today.

The ingredient-centered beauty trend is gaining prominence in China and the United States, where bold investments and rapid consumer education are taking place. In particular, the ingredient-centered beauty trend is emerging in the United States, the world's largest beauty market, and the derma cosmetics market, which is an extension of it, is growing rapidly.

According to Euromonitor, the global derma cosmetics market has grown at an average annual rate of 12% over the past five years, and major beauty countries such as China (20%), the United States (11%), and Korea (14%) also recorded double-digit growth. As of 2023, Korea's derma cosmetics market ranks 6th in the world.

The essence of K-beauty, which is based on ingredients and science, is intertwined with the ingredient-centered beauty trend. K-beauty products are expected to appeal to the global market, especially the U.S. market, as ingredient-centered beauty has many products that aim for skin health through functional aspects and proven efficacy rather than simply requiring unique raw materials or organic products. Considering the characteristics of the American market, which has already reached a certain level of maturity in the beauty market, K-beauty products with proven ingredients and scientific efficacy have a good chance of winning.

Senior Researcher Hong said, “It is desirable to take the lead in the market by focusing on ‘ingredients’ rather than putting Korean manufacturing and branding at the forefront. Companies should focus on creating a strong brand identity that emphasizes excellent ingredients and appeal to all generations and regions.”

Euromonitor also announced that the proportion of online beauty and personal care purchases in Korea is high in 2023. In fact, based on the Korean market, the beauty & personal care e-commerce channel is the only ?beauty distribution channel that has grown since COVID-19. After entering a period of market stabilization, it has continued to grow steadily until 2023, consolidating its global No. 1 position. Even before 2020, Korea ranked first globally in terms of beauty e-commerce share, but considering that it remained in the 40% range five years ago, this is a meaningful growth trend.

?

Korea's beauty e-commerce market ranks 3rd in the world

?Euromonitor reports that H&B stores, which have emerged as one of the major beauty distribution channels in Asia, including Korea, as well as grocery stores, which are key beauty distribution channel in small cities, are still doing well as major distribution. However, the proportion and market influence of e-commerce will grow in the future.

Korea ranks 11th globally in terms of overall beauty & personal care market size, including online and offline, but ranks 3rd in terms of beauty e-commerce, after the United States and China.

The Korean beauty e-commerce market has seen notable changes since 2020. Offline channels are now focusing their efforts on online channels, where the proportion of sales exceeded half of the total in 2021. In terms of sales proportion by channel, Korea recorded the highest proportion of e-commerce in the world in 2023. The proportion should even be bigger when including overseas direct access to specialized global Korean e-commerce (the so-called ‘reverse direct online sales’) channels.

Hong Hee-jung, senior researcher at Euromonitor Beauty & Fashion, said, “The growth of e-commerce, especially the revival of social commerce, is expected to have a positive impact not only on beauty dinosaur brands but also on emerging brands newly entering the market.”

She continued, “Social media marketing, which can increase brand awareness through direct communication with customers, can relieve some of the burden of offline channels, so it is creating a space where emerging brands can actively try various initiatives, and sales is increasing. ?This is true for other Asian and North American markets.” The implication is that e-commerce is an important route for K-beauty to go global.

According to Euromonitor, the global beauty & personal care market in 2023 recorded $570 billion, a 3% increase compared to the previous year, excluding inflation, and the Korean market recorded $13.3 billion (approximately KRW 17.39 trillion), a 1% increase compared to the previous year. The beauty & personal care e-commerce market in the U.S. and China was $34.5 billion and $33.7 billion, respectively, and the Korean market was $7.8 billion (approximately KRW 10.19 trillion).

For more information, please visit THE K BEAUTY SCIENCE website.

??? ‘?? ?? ??(Ingredient-led beauty)'? < NEWS < ???? - THE K BEAUTY SCIENCE (thekbs.co.kr)