According to Ahn, K-beauty’s exponential growth is due to its core values and principles that are well aligned with consumers’ priorities in the post-pandemic space.
“There’s a growing interest in clean beauty and safe, natural products as health-focused consumers look to products that will help maintain their overall health and wellbeing.”
She also stated that there is also a renewed interest and value placed on science post-covid which K-beauty’s laboratory-led formula and dermatologically-backed products embody.
“The growth will also be driven by K-beauty brands’ ability to introduce new products in sync with consumer trends and respond to early demand very quickly.”
It is worth noting that some major K-beauty brands are struggling, including Etude House, which closed nearly half its stores in China and Southeast Asia. Revenue dipped 20 per cent to US$3.9 billion, with cosmetics, which makes up almost half of the revenue, tanking 26 per cent year on year.
Innisfree, another AmorePacific subsidiary, had its sales plunge by 37 per cent, year-on-year, to US$307 million in 2020 and also pulled the plug on all of its stores in China at the start of last year. Other K-beauty titans that have exited China since the pandemic began include The Face Shop and 3CE.
The future of clean beauty
Like elsewhere in the world, in South Korea, vegan and cruelty-free cosmetics have risen in popularity. Concerns about the impact of large-scale farming on the environment have increased demands for products that are non-toxic and safe for human consumption.
“We are moving into the era of a more conscious beauty that looks beyond clean beauty’s ‘safe and non-toxic’ attributes, it’s all encompassing, where beauty brands are now expected to implement sustainability initiatives across product development – from sourcing, formulation, and packaging to delivery,” Ahn said.
WGSN has highlighted the biotech beauty space as a prime example that answers both sustainability and efficacy concerns.
“Biotech beauty melds science and nature through its lab-grown, or lab-engineered ingredients that serve as sustainable alternatives to natural ingredients,” explained Ahn.
K-Beauty fuses natural ingredients with synthetic chemicals to increase potency – or creates synthetic alternatives altogether to replicate or mimic the benefits found in natural raw materials or animal-derived ingredients – without harming the planet, she added.
The digital evolution
Moving on to the digital space, from augmented reality (AR) try-ons that allow users to preview products to immersive third spaces and avatar makeovers, the metaverse has unlocked a new world of fluid states and digital brand experiences.
According to a WGSN report, the merging of realities will place digital and physical experiences on an equal footing, and brands will need to take beauty experiences and products into the meta-space.
Interestingly, The South Korean Ministry of Science and ICT (MIST) has allocated $7.5 billion to the Digital New Deal 2.0 to build its own metaverse and AI research, with the aim of becoming the fifth largest metaverse market by 2026.
“While beauty in the metaverse is still a relatively new concept, brands are understanding the need to experiment and explore this space – especially to appeal to the next wave of consumers: digital natives Gen Z and Alpha,” Ahn noted.
Some K-beauty brands have been opening up virtual pop-up stores on Zepeto, a Korean-based avatar ecosystem on the metaverse, and users can explore the space or try on products on their avatars.
There are also digital showrooms where customers can navigate an immersive 3D space via a computer screen or smartphone, all from the comfort of one’s home.
“VR try-ons are allowing customers to try on lipstick colours through their phone’s camera feature, offering skin consultations and product recommendations, possibilities at the moment are endless.”
Going forward, Ahn thinks that the metaverse will evolve and allow brands to offer a new layer of ‘deep service’ in products and create new points of connection with consumers.
“Physical products with digital elements that unlock tutorials, or exclusive content and the day’s UV / pollution index will all enhance beauty routines,” she explained.
The Korean wave
Dubbed the Korean wave, South Korean culture and content, from movies and dramas to music and beauty, has captivated people across cultures. According to WGSN, K-beauty has been leading the way with creativity, innovation and its connection to cultural heritage.
“Collaborations with K-pop artists will continue to be a powerful strategy to target overseas fans and consumers, this is due in part to K-pop artists and groups being inextricably tied to shaping beauty trends and standards,” said Ahn.
According to a survey by the Korea Foundation, the estimated number of Korean Wave fans exceeded 156.6 million as of December 2021.
Ahn stated that Laneige recently leveraged this cohort with the launch of a limited Lip Sleeping Mask Purple Edition to support South Korean boy band BTS and their Los Angeles concert.
“K-pop and beauty crossover girl group Blackpink members have also become global muses for global and luxury brands, including Dior Beauty, YSL Beauty and MAC Cosmetics.”
The APAC marketplace
According to Ahn, K-beauty is still viewed as the ‘OG’ of country-specific beauty and sets a benchmark that other countries in the region follow.
She feels that K-beauty has shown the importance of understanding specific beauty concerns and nuances of a country and offering innovative solutions and products that speak to culture, values and needs.
“At WGSN, we’re tracking a lot of newer emerging indie brands that are targeting specific niche markets, such as Gen Z-targeted gender-neutral and vegan beauty brand Chasin’ Rabbits, as well as brands like Tocobo and Plodica.”
These brands are shedding the stereotypical minimalist ‘clean beauty image and aesthetic’ by bringing in factors of fun and play through eye-catching and colourful packaging designs to draw in the younger crowd, without compromising efficacy or quality.
“A lot of these indie brands are also leveraging and promoting locally exclusive ingredients, which gives it a unique point of difference from a global context.”
Ahn stated that younger Millennial and Gen Z beauty consumers are more open to exploring new brands and trying out products, so as long as brands provide proof of efficacy through the likes of certifications, as the name-value of a beauty brand no longer holds the supremacy as it once did.
In Ahn’s opinion, the impact of the climate crisis and geo-political uncertainty are being widely felt across the industry and beauty businesses need to re-assess and rethink their supply chain sourcing.
“K-beauty brands are in a good position to deal with this turbulence, having already seen a shift to locally sourced products and ingredients during the pandemic,” she said.
This will gain further momentum, with brands leveraging local and seasonal ingredients to shorten supply chains and reduce transport costs. Alternative ‘farm tech’ methods such as vertical farming, which use less natural resources, are also expected to become increasingly popular.
K-beauty’s use of science and innovation will also be a plus here, bio-synthetics and lab-grown ingredients offer a smart and cost effective solution, being unaffected by unpredictable weather or world events, and reducing impact on the environment,” she concluded.