"Bought This in Korea": As Chinese Tourists Flock In, Is the Door Reopening for K-Beauty in China? [Weekend Money]

Will the Industry Overcome the Prolonged Slump After the THAAD Incident?

The 'Inbound Butterfly Effect' of Chinese Tourists Visiting Korea

Benefits Expand to Include Color Cosmetics Brands

Exports of Korean cosmetics to China have shown strong signs of recovery after two years, fueling optimism over the reopening of the Chinese market.

Recently, Woojeong Kwon, a researcher at Kyobo Securities, analyzed, "Between September 1 and 20, cosmetics exports to China totaled 190 million dollars, a 76% increase compared to the same period last year, and a 193% rise from the previous month. If the current trend continues, it is expected that exports to China will exceed 200 million dollars in September, which would be the first time in about two years."

A Major Comeback in Two Years... The World's Second-Largest Cosmetics Market Reopens

Previously, cosmetics exports to China began losing momentum after the 2017 THAAD (Terminal High Altitude Area Defense) crisis. Starting in 2022, exports declined by an annual average of 21%, marking a severe drought for the industry. This was due to waning interest in K-beauty, the rise of local Chinese brands, and overall sluggish domestic demand in China. In response, major players such as Amorepacific and LG Household & Health Care, which once led the market, have significantly restructured their local operations in recent years.

The turnaround began in the middle of this year. After growth rates turned positive in May compared to the previous year, September has brought clear signs of a full-fledged comeback. Researcher Kwon evaluated, "Considering the prolonged slump and business downsizing in China, the recent rebound in exports is a significant change. It means the world's second-largest cosmetics market is opening up again."

This trend is also confirmed in Chinese media reports. Recently, local articles highlighting K-beauty's reentry into the Chinese market have steadily increased. Notably, the brands gaining attention are not the ones that previously led the Chinese market, but rather K-beauty brands that have already proven successful globally.

A Different Equation for Reentry... Globally Proven Brands Take Center Stage

Image generated by AI to assist in understanding the article.

In 2023, Anua, which had completely withdrawn from Chinese platforms such as Xiaohongshu, Douyin, and Tmall Global, reentered the local market last month through Sephora China. Similarly, Dalba Global recently completed the establishment of its Chinese subsidiary and began targeting offline demand, while APR, the company behind Medicube, entered into a strategic distribution partnership to strengthen its presence in the Chinese offline market.

Researcher Kwon pointed out, "What's especially different this time is that brands already proven on the global stage, not those that used to dominate the Chinese market, are now at the center of attention."

The increase of Chinese tourists visiting Korea has also played a crucial role. Korean travel experiences shared by acquaintances and exposure to Korea-related content on social media have fueled interest in Korean culture, creating a virtuous cycle that leads to increased purchases of Korean consumer goods.

If the cycle is established where tourists purchase products at Olive Young in Korea, then make repeat purchases after returning home, top Olive Young brands stand to benefit directly. For example, Japan's Shiseido positively assessed not only a rise in inbound revenue from Chinese tourists during peak tourism periods but also the subsequent boost in local demand as returning tourists repurchased products in China.

The growth of color cosmetics brands is also particularly noteworthy. Chinese consumers find it easy to use Korean color cosmetics because of similar skin tones and makeup trends. Researcher Kwon commented, "In Korean Olive Young shopping lists posted on Xiaohongshu, prominent products include Lilybyred's 'Love Beam,' Fwee's 'Pudding Pot,' and WAKEMAKE's 'Shadow Palette.' While skincare was the main driver for K-beauty expansion in Western markets, it is possible that the benefits will extend to color cosmetics in China."

This content was produced with the assistance of AI translation services.