"Chinese Counterfeits Give SME Brands a Headache"... Minister Lee Soyoung Hears K-Beauty Industry's Concerns

Lee Soyoung Visits Kolmar Korea's Sejong Plant on the 16th
Discusses Strengthening K-Beauty Competitiveness and Nurturing SMEs

As counterfeit products from China and other countries imitating Korean cosmetics proliferate, voices from the K-beauty industry have raised concerns that domestic small and medium-sized indie cosmetics brands are struggling. Rising prices for raw and subsidiary materials and export regulations that vary by country were also cited as burdens.

On the afternoon of October 16, Minister of SMEs and Startups Lee Soyoung visited Kolmar Korea's Sejong plant, toured its production facilities, and then held a tea meeting with executives, including Kolmar Korea CEO Choi Hyun-kyu, to discuss ways to strengthen K-beauty's competitiveness and support the industry.

The visit was part of Minister Lee's two-day, one-night field trip to the Chungcheong region. Its purpose was to assess the competitiveness and challenges of the K-beauty industry and explore ways to strengthen cooperation with small and medium-sized indie brands.

Founded in 1990, Kolmar Korea was the first cosmetics original design manufacturer (ODM) in Korea. According to the company, its Sejong plant, a key production hub, produces 890 million cosmetics products annually. During the visit, Minister Lee toured the production process, from blending cosmetic ingredients to filling and packaging, and reviewed the facility's automation, including the use of robotic arms and a real-time process management system.

Minister of SMEs and Startups Lee Soyoung discusses ways to promote K-beauty globally and other topics at a meeting held at Kolmar's Sejong plant in Sejong Special Self-Governing City on the afternoon of the 16th. Ministry of SMEs and Startups

At the tea meeting that followed, CEO Choi cited the proliferation of imitation products overseas as a major challenge. He conveyed the concerns of the company's small and medium-sized indie brand clients, saying, "I hear that they're working hard to export to North America and Europe, but many similar products are coming onto the market, making marketing difficult." He added that imitation products are spreading in China and other parts of Asia, and that the company has been bringing the issue to the government's attention since last year.

The burden of rising prices for raw and subsidiary materials was also raised. CEO Choi said prices for cosmetic packaging materials had increased following a rise in oil prices amid instability in the Middle East, and that the burden was being passed on to small and medium-sized brand companies as well. Lee Young-joo, vice president of Kolmar Korea, said that brand companies, worried about supply disruptions, had at one point placed orders for far more products than they needed, causing a sharp rise in precautionary demand, but that the situation had recently eased.

Cosmetics regulations that differ by country were also cited as a hurdle for small and medium-sized exporters. Vice President Lee cited the example of sunscreen being classified as an over-the-counter drug (OTC), rather than a general cosmetic, in the United States, and explained, "There are many ingredients subject to regulation in each country. If there is no prior consultation, small and medium-sized brand companies face considerable difficulties."

In the first half of this year, cosmetics exports by small and medium-sized enterprises totaled $5.07 billion (approximately 6.8 trillion won), up 30.7% from the same period a year earlier, making cosmetics the top export category among small and medium-sized enterprises. CEO Choi highlighted the competitive strengths of domestic small and medium-sized indie brands, including their ability to develop product concepts, make decisions quickly and bring products to market fast, and market through social networking services (SNS).

However, he said that only 20 to 30 out of every 10,000 brands stand out in the global market. In this regard, he suggested that the Ministry of SMEs and Startups and Kolmar Korea work together to explore ways to nurture small and medium-sized brands.

"Kolmar Korea is not a small or medium-sized enterprise, but it plays a role like a cradle for small and medium-sized cosmetics companies," Minister Lee said. "I wanted to hear what efforts the government needs to make to further increase K-beauty exports and help small and medium-sized enterprises grow."

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