Korean cosmetics corporations are taking direct aim at the Latin American market. After reducing their dependence on China and sparking a K-beauty boom in North America and Europe, these corporations are now turning their eyes to the other side of the globe, including Brazil and Chile. The fact that top cosmetics corporations' executives joined the economic delegation en masse during President Lee Jae-myung's state visit to Brazil is one sign of this trend.
According to related industries on the 29th, the Korea-Brazil business roundtable held in São Paulo, Brazil, that day was attended by President Lee Sang-mok Amorepacific Holdings(002790), CEO Kim Byung-hoon APR(278470), Goodai Global CEO Cheon Joo-hyeok, and CEO Kim Sung-woon SILICON2(257720), among others. It is unusual that, alongside major groups such as Samsung, SK, and Hyundai Motor(005380), cosmetics industry executives prominently joined the president's economic delegation. The president said that day, "We can achieve major results in three areas: joint development of the next-generation civil aircraft, supply chain cooperation in critical minerals, and K-beauty."
This also reflects the cosmetics industry's optimism about Latin America. K-beauty exports had long focused on China, Japan, and the United States, but recently distribution networks have been expanding rapidly to Mexico, Brazil, Chile, and Colombia. As interest in Korean culture grows thanks to K-pop and K-dramas, demand for Korean-made cosmetics is rising in tandem.
Amorepacific(090430) is expanding its sales territory to Brazil and Peru after entering Mexico, Chile, and Colombia with Laneige at the forefront. In Brazil, it is also accelerating its push into hair care, led by Mise-en-scène and Ryeo. It distributes products through local drugstores similar to Korea's Olive Young, and in May this year completed entry into all Sephora stores in Brazil, widening offline touchpoints.
LG H&H(051900) is also eyeing Latin America. Earlier this year, during Brazilian President Luiz Inácio Lula da Silva's state visit to Korea, LG H&H's O HUI and Amorepacific's Sulwhasoo were presented as state gifts. Lula has previously shown interest in K-beauty, even citing Korean cosmetics as one of his grooming secrets. At last year's Asia-Pacific Economic Cooperation (APEC) leaders' meeting in Gyeongju, LG H&H's The History of Whoo products drew attention when they were provided to leaders of each country.
◇ From conglomerates to indie brands, a stronger push into Latin America
Mid-sized and indie brands are also moving quickly into Latin America. Goodai Global is expanding its distribution by placing Beauty of Joseon, SKIN1004, and TirTir in Sephora Brazil. SKIN1004's South American sales last year rose 187% from a year earlier. APR is expanding distribution in Brazil and Argentina centered on Medicube, and SILICON2 plans to establish a Brazil subsidiary within the year, using its Mexico subsidiary as a bridgehead, to build a distribution hub linking North and South America.
Latin America is cited as a region where K-beauty corporations can seek new growth opportunities. With many young consumers and active cosmetics spending, and with diverse skin tones and hair types, companies can offer a wide range of products from skincare and color cosmetics to hair care. The fact that K-beauty's recognition has risen in the United States and is spreading to geographically close Latin America is also considered a positive factor.
At the center is Brazil. Brazil is Latin America's largest consumer market and the world's No. 3 cosmetics market after the United States and China. Euromonitor projected the Brazilian cosmetics market this year at about $34 billion (about 50 trillion won). Actual exports are also rising quickly. Korea's cosmetics exports to Brazil increased more than tenfold in five years, from $5.18 million (about 7.6 billion won) in 2020 to $54.3 million (about 79.4 billion won) last year. According to the Ministry of SMEs and Startups, in the first half of this year, cosmetics exports to Latin America by domestic small and midsize companies rose 131.9% from a year earlier, four times the overall regional average growth rate of 30.7%.
According to tallies by the Ministery of Food and Drug Safety, total cosmetics exports in the first half of this year reached $7 billion (about 10.241 trillion won), a record high. Attention is on whether Latin America, beyond North America and Europe, can establish itself as a new growth axis for K-beauty.