Can rivals keep up as K-beauty speeds ahead?

Independent brands are driving much of the sector's export growth.

South Korean beauty brands are gaining global market share by launching products faster and expanding overseas, raising questions about whether global rivals can keep pace as consumers increasingly prioritise performance over price.

“The structural shift driving this growth is the rise of indie brands,” Shikhara Investment Management LP said in a July white paper. “These smaller, digitally native labels have built global followings by delivering comparable quality to legacy multinationals at a fraction of the price.”

The investment firm said Korean cosmetics exports rose 19% year on year in the first quarter before accelerating to 24% in May, citing Morgan Stanley Research data.

Europe posted the strongest growth, with exports up 71% in the first quarter and 83% in May, whilst shipments to the US increased 40% and 32%, respectively.

Shikhara attributed the gains to independent beauty brands supported by South Korea's original design manufacturing industry, which lets companies develop and launch products more quickly.

It cited Cosmecca Korea Co. Ltd. as an example of a manufacturer producing products for multiple brands, helping shorten development times and respond faster to changing consumer demand.

LF Beauty Holding Ltd., better known as Meiyume, also identified rapid innovation as a defining feature of K-beauty in a May report.

It said Korean brands continue to introduce products across skincare, colour cosmetics, and haircare, with barrier-repair skincare, vegan formulations, advanced textures, precision makeup applicators, and clinically positioned haircare driving innovation.

Consumer preferences vary by market. Meiyume said UK shoppers favour efficacy-focused skincare, US consumers prefer convenient, multifunctional products, and Indonesian consumers are increasingly seeking biotechnology-inspired skincare and high-performance haircare.

Global demand is expected to remain supportive. McKinsey & Company, Inc. said in a June report that the beauty market is forecast to grow 5% annually through 2030, with Southeast and Central Asia amongst the fastest-growing regions.

The consultancy said consumers are placing greater emphasis on product performance than price.

“In skin care, the long-standing rule that ‘premium equals performance’ no longer holds true,” McKinsey said..“Consumers are embracing lower-priced brands—especially those from dermatologist-backed and K-beauty players—that deliver visible results and clinical credibility without luxury price tags.”

Questions to ponder:

1. Can established beauty brands match K-beauty's speed of innovation without sacrificing quality or profitability?
2. If consumers increasingly buy based on product performance rather than price, how should beauty brands differentiate themselves?