Korean cosmetics corporations are taking dead aim at the Latin American market. After reducing their reliance on China and fueling a K-beauty boom in North America and Europe, the corporations are now turning their eyes to the other side of the globe, including Brazil and Chile. The fact that top cosmetics corporate executives joined the economic delegation en masse during President Lee Jae-myung's state visit to Brazil shows a slice of this trend.
According to the industry on the 29th, the Korea-Brazil Business Roundtable held that day in São Paulo, Brazil, was attended by President Lee Sang-mok Amorepacific Holdings(002790), CEO Kim Byung-hoon APR(278470), Goodai Global CEO Cheon Ju-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), executives from the cosmetics industry appeared in large numbers on the presidential economic delegation. President Lee said that day, "We can achieve major results in three areas: joint development of next-generation commercial aircraft, supply chain cooperation in critical minerals, and even K-beauty."
This also reflects the cosmetics industry's optimism about Latin America. While K-beauty exports had focused on China, the United States, and Europe, sales networks have recently been expanding rapidly into Mexico, Brazil, Chile, and Colombia. As interest in Korean culture has grown thanks to K-pop and K-dramas, demand for domestically made cosmetics has been rising in tandem.
Amorepacific(090430) is pushing into Mexico, Chile, and Colombia with Laneige and is expanding its sales footprint to Brazil and Peru. In Brazil, it is also speeding up its hair care push with Mise-en-scène and Ryo. 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, broadening offline touchpoints.
LG H&H(051900) is also eyeing Latin America. During the Brazilian state visit to Korea early this year by President Luiz Inácio Lula da Silva, LG H&H's O Hui and Amorepacific's Sulwhasoo were presented as state gifts. Lula had previously shown interest in K-beauty, even mentioning Korean cosmetics as his grooming secret. At last year's Asia-Pacific Economic Cooperation (APEC) summit 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, push into Latin America intensifies
Mid-sized and indie brands are also moving quickly to target Latin America. Goodai Global is expanding its distribution network by placing Beauty of Joseon, SKIN1004, and TirTir in Brazil's Sephora. SKIN1004's sales in South America last year rose 187% from a year earlier. APR is expanding distribution in Brazil and Argentina centered on Medicube, and SILICON2 is using its Mexico subsidiary as a bridgehead to establish a Brazil subsidiary within the year, aiming 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. It has many young consumers and active cosmetics spending, and the diversity of skin tones and hair types allows a wide range of products from skincare to color cosmetics to hair care. Another positive factor is that K-beauty's heightened recognition in the United States is spreading to geographically close Latin America.
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 that Brazil's cosmetics market this year will reach about $34 billion (about 50 trillion won). Actual exports are also rising quickly. Korea's cosmetics exports to Brazil jumped 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 by domestic small and mid-sized companies to Latin America increased 131.9% from the same period last year, outpacing the overall regional average growth rate of 30.7% by fourfold.
According to totals by the Ministery of Food and Drug Safety, 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.