As the K-beauty boom prompts domestic cosmetics original design manufacturers (ODM) to race to expand production facilities, skincare plant expansions are following one after another. In cosmetics exports, the share of basic skincare products such as lotions, creams, and serums has been steadily growing, and research and development (R&D) of ingredients and formulas makes it easier to differentiate products and improve revenue.
According to the industry on the 14th, Kolmar Korea(161890) is expanding basic skincare production facilities near its existing plant in Jeonui-myeon, Sejong. The move is aimed at withdrawing from its Beijing plant in China and transferring local production volume to Korea. After signing an investment agreement with Sejong in Mar., it secured a site for a new plant and has been proceeding with the expansion. The Ministry of Trade, Industry and Resources last month designated Kolmar Korea as the first reshoring corporations of the year.
COSMAX(192820) has been expanding its Pyeongtaek Plant 1 in Pyeongtaek, Gyeonggi Province, since June with an investment of 60.5 billion won. Pyeongtaek Plant 1 mainly produces basic skincare and customized cosmetics. Until now, the company had focused on color products such as lip and cushion items, but it is expanding basic skincare capacity in response to rising global skincare demand.
In fact, the share of basic skincare is growing in COSMAX's product mix. Sales of basic skincare at COSMAX's Korea unit in the first quarter of this year rose 41% from a year earlier on strong exports of hydrogel masks, suncare, and mists. The share of basic skincare in total products also increased from 53% to 64%.
Cosmecca Korea(241710) will build a new skincare plant. The company will invest a total of 200 billion won from 2026 to 2030 to establish production facilities with a total floor area of about 59,000 square meters at the Ochang Science Industrial Complex in Cheongju, North Chungcheong. Ground will be broken this month, with the first phase coming online next year, followed by a phased expansion of production equipment.
The biggest reason ODM companies are increasing skincare production facilities is overseas demand. According to the Ministery of Food and Drug Safety, Korea's cosmetics exports in the first half of this year totaled $7.0 billion, up 27.3% from a year earlier, marking the highest first-half figure on record. Of that, basic skincare exports were $5.48 billion, accounting for about 78% of the total, up 25% from a year earlier. Roughly eight out of 10 Korean cosmetics sold overseas are basic skincare.
From a manufacturer's perspective, skincare has the advantage of enabling diverse product development depending on ingredients and formulas. As more consumers scrutinize specific ingredients and benefits, products highlighting natural-origin ingredients such as centella and houttuynia, as well as functional ingredients such as retinol, niacinamide, and PDRN, are trending one after another. There is also a growing number of products that use ingredients or formulas developed in-house by ODM companies.
Compared with color cosmetics, the price range also differs. Even for the same cream or serum, skincare prices range from around 10,000 won to premium products costing several hundred thousand won or more, depending on ingredients, functions, and brand. In contrast, color cosmetics have a relatively clear upper price limit that consumers accept, and there are also limits to improving production efficiency, the industry said.
A representative at a cosmetics ODM company said, "Even for luxury brands, items such as lipsticks, eye shadows, and blushers rarely exceed 200,000–300,000 won per item, whereas skincare has ample room to develop premium products depending on ingredients and functions," adding, "For color products, a single item must be produced in multiple shades, and order volumes often change with trends, which can reduce production efficiency."
Some say the growing share of skincare could weigh on profitability in the short term, but as basic skincare continues to drive K-beauty exports, related investment is expected to continue. With prices of sub-materials such as cosmetic ingredients and containers rising, manufacturing costs are increasing, and expense is also required for research and development to create new ingredients and formulas.
Domestic ODM companies have steadily built research and development capabilities centered on skincare. According to Samil PwC Management Research Institute, R&D investment as a share of sales at COSMAX and Kolmar Korea stands at 5–6%, higher than the 2–3% at global cosmetics ODM company Intercos. The time from product planning to launch averages three to six months, shorter than the global average of nine to 12 months.
A representative at Samil PwC Management Research Institute said, "The center of K-beauty exports remains basic products, with trust in functionality and ingredients—such as derma, soothing, skin barrier strengthening, and brightening—driving growth," adding, "Domestic ODM companies are securing a competitive edge based on ingredient and formula innovation, fast delivery, and expense efficiency."