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원본보기 아이콘

원본보기 아이콘

원본보기 아이콘

원본보기 아이콘

원본보기 아이콘

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Lee, a teenager who is usually interested in cosmetics, went on a shopping spree at Daiso with the New Year's cash gifts received from relatives during the Lunar New Year holiday. She bought cosmetics that went viral on social media for 30,000 won. Lee said, "The advantage is that I can buy things at less than 10,000 won that would cost 20,000 to 30,000 won at Olive Young," adding, "In the past, I didn't buy Daiso cosmetics because of distrust, but now there are good quality products at affordable prices, so I think I'll buy them more often."

As the cosmetics consumption trend shifts from 'premium' to 'value for money,' the biggest beneficiary has been Asung Daiso. Daiso's cosmetics, once shunned by consumers, are now gaining popularity as word spreads about their excellent quality for the price.

A receipt from a Daiso store in Gyeonggi-do for purchasing cosmetics. The total price for all 10 products is under 30,000 won, making it very affordable. Some products from certain brands that gained popularity on social media were sold out.

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According to industry sources on the 3rd, Asung Daiso's sales increased by 54.7%, from 2.2362 trillion won in 2019 to 3.4604 trillion won last year. Among these, sales in the cosmetics category (basic and color cosmetics) grew by 150% year-on-year from January to November last year. Compared to the 85% growth from 2022 to 2023 and about 50% from 2021 to 2022, the recent sales growth is particularly steep. A Daiso representative said, "We do not disclose the proportion of cosmetics sales out of total sales, but it is true that the share of cosmetics in our sales has recently increased."

Last month, the vegan beauty brand Dinto collaborated with Daiso to launch the color cosmetics line 'Prelude Dinto,' which sold out immediately upon release. This was due to the buzz on social media and online communities even before its launch. In September last year, Amorepacific's 'Mimo by Mamonde' product surpassed cumulative sales of 1 million units within just four months of being stocked at Daiso. Currently, a total of 59 brands are available at Daiso, including cosmetics from LG Household & Health Care, Amorepacific, and Aekyung Industrial.

The strength of Daiso cosmetics lies in their 'low prices.' Daiso maintains a fixed price policy, offering all products at six price points: 500 won, 1,000 won, 1,500 won, 2,000 won, 3,000 won, and 5,000 won. Even the most expensive cosmetic item does not exceed 5,000 won. Kim (30) said, "Daiso cosmetics are so well made and affordable that buying them elsewhere feels like a loss," adding, "Using Daiso cosmetics finally makes me feel that prices are reasonable."

The reason Daiso can offer ultra-low-priced cosmetics is the 'minimization of marketing and distribution costs.' While large cosmetics brands spend a lot on advertising and hiring models, Daiso does not engage in large-scale marketing, which allows it to reduce distribution costs. A Daiso representative explained, "To provide products at fixed prices, we minimize distribution margins from advertising and marketing."

The branded cosmetics sold at Daiso are mostly produced by Original Design Manufacturing (ODM) companies. Domestic ODM companies such as Kolmar Korea and Cosmax handle planning, development, and production when they receive product development requests from brand companies. The finished products are delivered to the brand companies, who then sell them. Even if products are made by the same manufacturer, prices can vary depending on advertising and marketing costs. Cosmetic brands sold at Daiso minimize costs incurred in the distribution process, allowing them to be sold at lower prices.

In fact, according to Cosmax's quarterly report from last September, the main raw materials for cosmetics, ethanol and glycerin, were priced at 1,700 won and 1,230 won per quarter last year, with raw material costs not exceeding 2,000 won. Also, as of last year, the average price of basic products was 2,236 won, and color products averaged 2,723 won per quarter at Cosmax. Most of the high price of cosmetics is generated in the intermediate distribution process.

Lee Eunhee, professor of consumer studies at Inha University, said, "Most of the high price of cosmetics is due to advertising and marketing costs," adding, "However, today's consumers often make decisions based on YouTubers or social media reactions rather than advertisements, so the influence of advertising and promotion has dropped significantly compared to the past."

The bulk sales strategy is another reason Daiso can maintain low cosmetic prices. As of 2023, there are 1,519 Daiso stores nationwide, creating an environment where bulk purchasing can lower prices. A Daiso representative said, "In this era of high prices, maintaining fixed prices is not easy, so in addition to the bulk sales strategy, we minimize unnecessary design and packaging to focus solely on the product itself."

It is expected that more people will turn to affordable Daiso cosmetics in this era of high prices. In fact, Daiso is also seeing a sharp increase in sales growth for clothing items. Among clothing items, the 'easywear' category, including fleece, padded vests, sweatshirts, and hoodies, saw sales grow by 267% year-on-year as of October last year. From October to November, the growth rate was an impressive 557% year-on-year.

Professor Lee said, "The credibility of cosmetics displayed at Daiso has increased, and it has been proven that sales can rise through social media or online even without advertising or promotion," adding, "In this era of high prices, the number of people purchasing affordable Daiso cosmetics will continue to grow."