"If you look at the factors behind K-beauty's success, there is a lot that other industries stuck in a growth slowdown can learn. K-beauty is not an industry that succeeded simply by riding the Korean Wave."
Kim Nando, the author who became known for the bestseller Trend Korea and a former professor of consumer studies at Seoul National University, recently released K-beauty Trend, a book analyzing the factors behind K-beauty's success. It is Kim's first book since retiring from the university and switching careers to author and YouTuber. Over six months, he met with 35 people working in the beauty industry and distilled the key points.
Regarding why he focused on K-beauty, Kim said, "While semiconductors, automobiles, and petrochemicals that have driven Korea's economy have been losing ground to China and the mood is not good, K-beauty is doing well, centered on indie brands," adding, "I thought that studying K-beauty closely could offer good lessons for Korea's recently stagnant export industries."
Kim said it is complacent to say K-beauty succeeded thanks to the Korean Wave alone. Cultural diffusion and success in the beauty industry do not always go hand in hand. The conclusion he drew about K-beauty's success factors is that K-beauty succeeded not because of the Korean Wave, but because of its ability to respond to trends. ChosunBiz met him on the 1st at a hotel in Yongsan, Seoul, to hear about K-beauty's success factors, ecosystem, and outlook. The following is a Q&A.
― Many industries are thriving thanks to the Korean Wave these days. Why study the cosmetics industry in particular?
"Korea is struggling in many industries. In many areas we used to excel in—semiconductors, automobiles, petrochemicals—China is surging in our place. But, surprisingly, that was not the case in beauty. Not only large companies but also small indie brands were producing results in the heartlands of cosmetics like the United States, Japan, and China. Cosmetics are not sold on cost-effectiveness alone; cultural appeal, symbolism, and ingredients all matter. I found it striking that small companies could come together to post strong results in such a category, and I thought other industries could learn from this."
― Many books already cover how K-beauty succeeded. What sets yours apart?
"I wanted to look at how things work on the ground rather than in a macro context. For example, how does COSMAX launch products so fast, and what kind of meetings do indie brands have to make business decisions? Beauty is an industry where trends change exceptionally quickly, and in fact, even traditionally heavy industries like automobiles are increasingly becoming 'trend industries.' That's why I thought it could offer good lessons for Korea's stagnant export industries."
― What environmental shift most turbocharged K-beauty's success?
"Consumer behavior changed. In the past, people shopped by brand at the first-floor department store counters—'Chanel or Lancôme,' for instance. Then, through select shops and online, it shifted to product-centered purchasing. Now, centered on CJ Olive Young, it has expanded to theme-centered purchasing. People look only at cleansers, or only at color cosmetics. Growth in online also played a big role. Online, product strength matters far more than brand. This shift opened opportunities for indie brands."
― How did indie brands seize the opportunities that opened up?
"They were good at responding to trends. Young MDs quickly figured out what consumers wanted and pitched ideas. COSMAX and Kolmar Korea, strong in research and development (R&D), took those ideas and turned them into products right away, and they were adept at online marketing on platforms like TikTok. Everything happened at speed. On the other side were prepared consumers—the so-called 'K-beauty geeks (cosmetics maniacs).'"
― Why do you think large companies like Amorepacific or LG H&H lost competitiveness?
"This is an era when market domination through capital strength is impossible. If capital could guarantee success, L'Oréal should rule the global market, but it doesn't. The ability to respond to trends and speed are what matter, and those don't move in lockstep with capital or corporate scale. What Amorepacific and LG H&H need now is 'unlearn.' It means they must discard the ways they have succeeded so far.
Compared with LG H&H, Amorepacific is relatively better positioned. Amorepacific has strong ownership and is a company that can attempt 'unlearn.' The key to a rebound is how boldly a large company can shed its past success formulas."
― You cited "K-beauty geeks" as one of the success factors. What are the characteristics of Korean consumers?
"Korea is a country that takes beauty seriously. Many consumers have morning and evening routines of five steps or more, and men's spending on cosmetics is among the highest in the world. Consumers scrutinize ingredients. As these consumers grew, services like the app Hwahae, which interprets cosmetic ingredients, emerged. Because many consumers look beyond the brand to the manufacturer and the ingredients, it's only natural to say that if it works in Korea, it will work globally. Institutions also played a role."
― Which systems put wind under the wings of the K-beauty industry?
"In 2012, the Cosmetics Act was fully revised. The existing positive regulation approach (explicitly listing what is allowed by law or policy and banning everything not listed) changed to a negative regulation approach (allowing everything except what is prohibited by law). Until then, only approved ingredients could be used. From the revision of the Cosmetics Act, cosmetic ingredients diversified. If you look at cosmetics now, the materials are extremely varied. Rice bran and houttuynia cordata are representative examples. Regulations changed to make such uses possible.
With the introduction of the responsible cosmetic seller system (separating manufacturing and sales so the seller is responsible for quality and safety) and the full ingredient labeling system (requiring containers to list not only main ingredients but also the quantities of active ingredients and the content of preservatives), corporate autonomy increased and innovation became possible. Since the legal revision, the number of brands and new product launches has risen conspicuously. A path opened for small brands to challenge the market with clear concepts and ingredients."
― Your book mentions Olive Young often. What role did Olive Young play in K-beauty's success?
"Even though the hegemony of distribution has shifted online, Olive Young has instead absorbed the strengths of online. Just as online shows a different screen each time, Olive Young regularly changes event themes and shelf layouts. Consumers constantly make new discoveries and have new experiences. In other words, it maximizes the joy of shopping. The role of young MDs is essential. MDs in their 20s decide on and handle product buying and, in turn, propose consumer trends to corporations.
As this process repeats countless times, Olive Young has created its own "seal of approval" effect rather than being a simple distribution channel. If you become a bestseller at Olive Young, you earn recognition overseas. On Amazon, they even check "which-number shelf at Olive Young" a product is on. It provides a halo effect that allows unknown indie brands to expand globally. This structure is a unique phenomenon found only in K-beauty. It is an academically interesting case as well."
― What is the greatest potential risk K-beauty faces?
"Of the success factors mentioned so far, the one that can collapse fastest is speed. If an indie brand grows and is acquired by a global company, or its major shareholder changes, speed can slow. Large companies inherently find it hard to move quickly because of quality control. To repeat, the outcome will ultimately hinge on how appropriately they can 'discard (unlearn)' their current success formulas."