Korean cosmetics makers are struggling to maintain their status in the Chinese market, in which they have enjoyed a great bonanza for the past several years. Some experts even concern that they have already missed a golden opportunity to attract major Chinese consumers. Currently, the Chinese market is led by Gen-Z consumers including those born in the 1990s; between 1995 and 1999; and in 2000 and beyond. Particularly, more than 90 percent out of around 250 million young people of Generation 95 and beyond purchase cosmetic products online, which clearly shows the main trends of consumption channels.
Despite the fast-changing market trends in China, Korean cosmetic businesses have played it safe and failed to build up local sales networks to attract major Chinese consumers. After many of them made a reckless rush to the cosmetics production field, Korean cosmetic businesses sold instant hit items among Chinese visitors to wholesale merchants through domestic duty free stores. Around the time K-Beauty products became the goose that laid the golden egg, the number of Korean cosmetic businesses rose to 10,080 in 2017 from 3,884 in 2013. The figure is larger than that of bakeries across Korea (8,344). With anti-Korean sentiment worsening in China, many Korean cosmetic makers have gone belly-up or grappled with decreasing sales. Meanwhile, Chinese beauty products called C-Beauty have grown significantly to rival K-Beauty products in terms of manufacturing technology.
Early this year, a business leader who has sold K-Beauty products in Thailand for 20 years was concerned that the global beauty market is a highly saturated market with fewer chances but harsher competition in it. There are a group of rising competitors such as Thailand’s “T-Beauty” renowned for its quality manufacturing technology, Japan’s “J-Beauty” successful in focusing on high-end products and Australia’s “A-Beauty” characterized by eco-friendly and organic products.
K-Beauty has enjoyed 10 years’ meaningful success across the globe, centered around BB creams, snail creams, facial masks. Many effective but affordable products have also been well-received by global consumers. However, those only hunting for instant popularity have failed to sustain their overnight success, which will always turn out to be true. Before it is too late, it is time to take the advice that K-Beauty should identify what makes it intrinsically differentiate from other competitors.