Choi Min, daughter of Choi Kook, the leader of the Justice Party, and Park Mak-rye, a 70-year-old grandmother with 1 million YouTube subscribers, are among the famous influencers who are increasingly entering the beauty business. As the cosmetics ODM (Original Design Manufacturing) industry has developed, influencers are launching their brands by leveraging their fame.
Previously, top stars such as Lee Young-ae and Ko Hyun-jung also introduced cosmetics brands early on, but research showed that recognition and brand success do not necessarily correlate. To avoid becoming a brand that appears briefly and then disappears, it is pointed out that product quality must be supported, and influencers themselves must manage their brands well.
According to the Ministry of Food and Drug Safety on Nov. 11, the scale of cosmetics exports from South Korea reached a record high of $9.3 billion (13.97 trillion won) from January to last month.
The background for the increase in cosmetics exports from South Korea is the growth of small brands known as 'indie brands.' According to the Ministry of Food and Drug Safety, the number of registered cosmetics responsible sales companies in South Korea last year was 31,524, up from 15,707 in 2019, achieving a twofold growth in four years. Thanks to this, not only celebrities but also influencers who have established their fame through YouTube and Instagram are each launching their own brands and expanding their cosmetics businesses.
Recently, Choi Min launched the cosmetics brand CEROLABS. Within two weeks of its release, some products have become so popular that they are sold out. Park Mak-rye also introduced the beauty brand RYE RYE. It is said that the products were developed using rice water and acorn flour as the main ingredients, based on Park's skin care secrets.
The reason many influencers can consecutively launch cosmetics brands is due to cosmetics ODM corporations. Even if individuals do not have their own production infrastructure, they can develop and launch products through ODM companies. The largest ODM corporations in South Korea include Kolmar Korea and Cosmax, along with about five other representative companies like Cosmecca Korea, C&C International, and Korean Cosmetics Manufacturing.
With the growth of indie brands expanding the overall market, corporations looking to expand their new businesses are also entering the cosmetics industry. In October, a subsidiary of HiteJinro, Seoyoung ENT, completely acquired the equity of the domestic cosmetics ODM company BNB Korea, which was previously owned by the private equity fund SKS Private Equity.
Monami, known for its writing instruments, completed a color cosmetics production plant in Yongin, Gyeonggi Province, in 2022 and established Monami Cosmetic as a subsidiary in January last year.
Some are expressing concern over the influx of influencers and corporations entering the beauty industry like bamboo shoots after a rain. The ODM market has become nearly a red ocean, making it difficult for latecomers to build brand value. It is also pointed out that relying solely on fame makes it hard to operate a brand consistently.
Actress Ko Hyun-jung launched a brand called Koi in 2015, but she ceased operations in 2018 due to poor sales. Currently, the cosmetics manufacturing and sales company Brandholder is selling Koi since 2020. Despite being a top star, she encountered ups and downs in the cosmetics business. Actress Ha Ji-won also introduced a brand called J.ONE in 2015. However, a dispute arose with the manufacturer Goldmark regarding portrait rights and compensation just a year later, and Goldmark relaunched under the name J.ONE Cosmetics after parting ways with Ha.
It is also pointed out that the proliferation of indie brands has made the differentiation between brands ambiguous. Inha University consumer studies professor Lee Eun-hee said, “The emergence of too many beauty brands may make it difficult for consumers to discern which products are outstanding.” She added, “There are cases where celebrities directly participate in the planning or development of products, as well as cases where only the celebrity's name is lent to launch a product,” and emphasized that product quality is fundamental and that true longevity as a brand comes from how much of one's expertise is integrated into the product.