Survival strategy in the era of cosmetics oversupply: “Go back to the basics”
The K Beauty Science Inc.
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Advice from Doyeon Lee, senior researcher at the Korea Institute of Science and Technology Information (KISTI) at the ‘Excellent Beauty Technology Briefing and Technology Seminar’ by Gyeonggi Province Economic and Science Promotion Agency
“The only way to survive is to increase R&D investment and product planning capabilities with the spirit of going Back to the Basics,” said Do-yeon Lee, senior researcher for the metropolitan area support of the Data Analysis Division of the Korea Institute of Science and Technology Information (KISTI), at the '2024 Excellent Beauty Technology Briefing and Technology Seminar held by the Gyeonggi-do Economic and Scientific Promotion Agency' held at the Gyeonggi Bio Center in Suwon-si, Gyeonggi-do, Korea on May 8.
He mentioned this while presenting 'the latest research and development trends and strategies in the functional cosmetics industry' and emphasized the importance of research and development in the cosmetics industry. Senior researcher Lee Do-yeon said, “The survival strategy in the era of cosmetics oversupply can be summarized as the following: △concept differentiation △value appeal △ESG △consumer trust (one-time marketing campaign no longer work). Product differentiation based on research, i.e. concept differentiation is a clear must. ?In order to do this, R&D needs to come in during the product planning stage.”
He said, “The cosmetics industry is greatly influenced by consumer needs and preferences, and because it is structured to develop products and establish marketing strategies that meet these consumer needs, continuous research and development (R&D) is necessary to survive in a fiercely competitive environment. It is a core competitiveness.”
Methods for small and medium-sized cosmetics companies to carry out R&D were also presented. “It would be good for small and medium-sized cosmetics companies to balance their own R&D funding against the loan amount, but it is very difficult in the ongoing economic situation of the high prices, high interest rates, and high exchange rates. Sluggish consumption due to long-term low growth also dampen the situation. Therefore, it is important to actively utilize available government (national, public, local government) R&D funds as much as possible for new product planning and technology development. “This requires a two-track strategy of R&D for planning and developing new products.”
Directions for receiving R&D funding from the government were also presented. As a result of analyzing 754 projects based on keywords in government-invested national R&D project data over the past five years (2019-2023), it was found that small and medium-sized enterprises accounted for 57.4% of the total number of projects and 59.5% of research funds. Among the 17 cities and provinces, there was a large distribution of research conducted by companies located in Gyeonggi, North Chungcheong, and Seoul regions. Government tasks include 319 from the Ministry of SMEs and Startups, 135 from the Ministry of Science and ICT, 79 from the Ministry of Education, 52 from the Ministry of Trade, Industry and Energy, 43 from the Korea Forest Service, 34 from the Rural Development Administration, 30 each from the Ministry of Health and Welfare and the Ministry of Agriculture, Food and Rural Affairs, and 22 from the Ministry of Oceans and Fisheries. , followed by the Ministry of Environment (10).
Senior Researcher Doyeon Lee suggested that companies strategically establish consumer-centered research and development, develope products targeting niche markets, harness ?fermentation technology, develop natural ingredient based functional cosmetics, develop sustainable and eco-friendly customized products. ?For small and medium-sized businesses, he suggested the development of cooperative network that integrates from product planning to commercialization, and conduct continuous market research.
Senior Researcher Lee Do-yeon emphasized that “Small and medium-sized businesses must strengthen their competitiveness through research and development strategies and focus on technological innovation. They can further enhance their strategies by developing customized products with sustainable approaches backed by effective commercialization strategies. This will lay the foundation for strengthening competitiveness in the global market.”
Meanwhile, Nam Gaewon, a professor at Seowon University, presented ‘the latest global cosmetics market trends and K-Beauty issue trends’ in which he said, “Biotechnology will increasingly be combined with AI (artificial intelligence) in the future. In particular, the best industry to apply the most cutting-edge concepts in the bio field is cosmetics.”
Clean and sustainable beauty and digitalization in the beauty industry were presented as keywords for the cosmetics industry. Clean and sustainable beauty includes △Sustainability △Safety for skin and skin microbiome △Product Safety (EWG) △Transparency for product and efficacy △Biotechnologies in Cosmetics △Eco-friendly packages and waterless formulations △Upcycled Ingredients for Cosmetic Application. ?
He also emphasized the importance of understanding regulations, saying, “Although China is strengthening regulations, Korea has created non-tariff trade barriers to other countries by implementing functional cosmetics,” and added, “We must be able to enter by understanding the characteristics of each country.”
Gyeong-gu Lee, head of the skin-based technology development business group, introduced the ‘Innovative Growth Skin Health-Based Technology Development Project (Ministry of Health and Welfare)’. He also introduced the R&D megatrends that can be summarized into; requiring sufficient scientific evidence of basic skin research, development of eco-friendly and sustainable materials, emphasizing skin protection and skin health, and activating technology convergence.
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He emphasized that “for future cosmetics technology, neuro-/sensorial, based on the convergence of dermatology, neuroscience, and human emotional science, is emerging as a new paradigm,” and that “as the market focuses on experimentation and evaluation of emotions, formulation and emotional analysis will take priority over ‘biological activity in the future.’”
He mentioned, “If Gyeonggi-do makes cosmetics using plants from the DMZ, I think it will be a sentiment unique to Korea but one that can ?resonate globally.”
?Gu Jin-mo, senior researcher at Gyeonggi Province Economic and Science Promotion Agency Biosetter, said that among the 15 beauty patent technologies held by the Gyeonggi Province Economic and Science Promotion Agency, the core patented technologies with high potential for commercialization are △ a composition for skin whitening and wrinkle improvement using chickadee extract △ hair growth promotion using chickweed extract and a composition for skin moisturizing using Agba tree extract.
Previously, Lee Jong-seok, head of the bio industry division, said, “We expect to be able to support 400 companies by 2026, including the initiation of a project to train 500 bio experts and foster bio startups starting this year.”
In his greeting, Kang Seong-cheon, director of the Gyeonggi Province Economic and Science Promotion Agency, said, “Gyeonggi-do is promoting a biocluster with Gwanggyo as an innovation base,” and added, “I am confident that this information session will be an important event for the future of the Korean beauty industry where technologies plays a key role.”
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