K-beauty and fashion are causing a stir worldwide. Korean cosmetics have secured the top spot in exports, surpassing traditional powerhouses like French cosmetics in the United States and Japan, establishing themselves as central players in the global market. The fashion sector is also experiencing significant growth. CHOSUNBIZ conducted relay interviews with success stories and differentiated product philosophies of beauty and fashion brands recognized overseas. [Editor's Note]
The K-beauty boom sweeping the globe would not have been possible without distribution agencies known as ‘vendor’ companies. Indie brands without a distribution network are able to enter major overseas channels like Amazon and Rakuten thanks to these companies.
The term vendor translates to something akin to merchant in English, but in the distribution industry, it refers to companies that connect manufacturers with sellers. Because these vendors operate without their own brands, they have not been significant players until now. However, as they achieve remarkable results in expanding overseas, they are beginning to gain attention in the market.
During a meeting with CHOSUNBIZ at the headquarters in Seongdong-gu, Seoul, on the 12th, Kim Myung-kyu, representative of SL Corporation, explained the role of vendor companies. SL Corporation focuses on facilitating the entry of cosmetics and health supplement brands into online and offline distribution companies such as Costco, Emart, duty-free stores, Kakao Gifts, and Coupang.
SL Corporation was founded in 2003 by Kim's mother. Initially, the main business was bringing in overseas beauty brands and selling them domestically. In 2014, the company sold the exclusive rights to this brand to LG H&H, effectively exiting the cosmetics business. After Kim took over the company in 2017, it transformed into a full-fledged cosmetics vendor. The company currently distributes over 120 domestic and international brands. It was practically a 'second startup,' as he describes it.
Kim's focus on the vendor business was due to his early recognition of the potential in the K-beauty industry. Small and emerging brands, which began to pop up like mushrooms based on the CJ Olive Young channel, captured consumers' attention with reasonable pricing and good quality, thereby increasing the role of vendor companies in distribution and sales. This was also when interest in Korean cosmetics began to grow overseas, influenced by the Korean wave.
His choice paid off. SL Corporation surpassed 8 billion won in annual sales in 2020, 11 billion won in 2021, and 26.3 billion won in 2022. In 2023, sales exceeded 30 billion won, and last year, they recorded 46.4 billion won. They also entered the Japanese market last year, becoming not just a domestic vendor but also a global vendor.
Recently, the company recognized for its growth potential received an investment of 5 billion won from K-beauty company Gudai Global, known as 'the beauty of Joseon,' and Solid One Partners.
With this funding, SL Corporation acquired Page Warner, a Japanese specialized vendor that distributes brands such as Aekyung Kerasis and Dong-A Pharmaceutical Party On in the Japanese market. This acquisition secured over 5,000 offline distribution channels in major Japanese retail.
Kim noted, “About four years ago, when I visited Japanese offline channels, I found that over 30% of the products were Korean. Seeing this sparked my desire to engage in outbound business, taking domestic brands overseas.”
Kim views the role of vendor companies as 'ecosystem builders.' This signifies that they are laying the groundwork for the Korean cosmetics industry to continue growing and expanding. He stated, “Vendors serve as the connection that allows Korean cosmetics brands to enter the market and meet consumers.”
He continued, “Not only do we listen and mediate between the market and consumers, but we also harmonize the positions of brands and distribution channels.” He added, “Vendors are not simply profit-seeking entities; rather, they are partners that help brands and grow together.”
He aims for SL Corporation to be listed on the KOSDAQ by 2028. Following their entry into Japan, plans are in place to establish entities in Southeast Asia, the United States, and Europe, targeting niche markets.
Kim observed, “Currently in Korea, we have established ourselves as a top four vendor by scale, but we are now seeking to be a player that serves as a bridge between domestic and overseas markets, marking our first external investment. While the market has domestic and overseas specialized vendors, there is no company that excels at both,” he said. “With the upcoming listing, our goal is to be in the top five in Japan within the next five years.”