K-beauty brands that have grown around online platforms such as Amazon and TikTok in the United States are quickly expanding their reach from local beauty-specialty distributors to shelves at major mass retailers.
After Sephora introduced a dedicated K-beauty section recently, Target also placed a large number of K-beauty brands front and center in its new beauty-specialty space, showing K-beauty expanding into increasingly mainstream consumer channels. With offline accounting for about 70% of U.S. cosmetics distribution, observers say K-beauty, which proved its awareness and sales power online, has now entered a phase of aggressively targeting a bigger market.
According to the retail industry on the 28th, U.S. mass retailer Target plans to operate a new beauty-specialty space, Target Beauty Studio, at more than 600 stores nationwide starting on the 10th of next month. It will sell more than 1,600 products from 90 brands, and more than two-thirds of the lineup will be brands entering Target for the first time.
Introducing the new beauty studio, Target classified K-beauty as a separate category. It directly cited AMUSE from Shinsegae International(031430) and rom&nd from 아이패밀리에스, as well as Kaja, Dr. Melaxin, Purito Seoul, and Ingredients Editor as representative K-beauty brands.
U.S. offline retailers are increasingly moving to actively bring in K-beauty brands. Brands that secured sales volume and buzz on platforms like Amazon and TikTok are being viewed as "proven up-and-coming brands" with relatively low entry risk.
A prime example is Medicube from APR(278470). After growing rapidly in the United States centered on Amazon, Medicube entered Ulta Beauty last year and expanded to about 1,500 Target stores in April this year. It then expanded its sales network to about 3,000 Walmart stores and is planning to enter Costco in the second half. APR's North American sales in the second quarter of this year were 376.3 billion won, up 264.6% from a year earlier.
Anua from The Founders likewise raised its profile on Amazon with basics such as cleansers and toners before entering 1,400 Ulta Beauty stores in the United States. d'Alba Global also expanded its North American business around Amazon and TikTok Shop, then broadened offline sales to Ulta Beauty and Costco.
CNP from LG H&H(051900) is selling its popular Lipcerin, which gained traction on Amazon, at more than 1,400 Ulta Beauty stores. Centellian24 from Dongkook Pharmaceutical(086450) also expanded its sales network to Costco, Ulta Beauty, and Nordstrom based on awareness built on Amazon and TikTok Shop.
As K-beauty awareness rises in the United States, local retailers are creating dedicated sections and showcasing multiple brands together. CJ Olive Young on the 20th opened Olive Young K-Beauty Edit sections at more than 580 Sephora stores in the United States.
About 150 products from 19 brands, including Rejuran, Manyo Factory, Dr. Groot, BANILA CO, Ingredients Editor, and Torriden, opened there at once. This means about 87% of Sephora's 670 stores in the United States now have dedicated K-beauty sections.
According to the cosmetics industry, 76% of K-beauty sales in North America currently come from e-commerce. But in the U.S. cosmetics distribution structure, online and offline channels are split roughly 3 to 7, with a larger share offline. As a result, offline channels such as hypermarkets, warehouse clubs, and drugstores are seen as markets with relatively ample room to cultivate.
Kwon U-jeong, an analyst at Kyobo Securities, said, "Expanding offline penetration can capture consumers different from the existing customer base, and because it gathers shoppers with strong purchase intent, conversion rates are high."
Park Hyeon-jin, an analyst at Shinhan Investment & Securities, said, "K-beauty's growth axis is expanding into offline," adding, "It could underpin higher earnings expectations for major corporations in the second half of this year."