Highlights
- K-beauty exports have hit historic highs, positioning cosmetics as one of the country's fastest-growing consumer exports.
- Only a handful of K-beauty ODM giants currently dominate a disproportionate share of industry revenue, thus broadening the gap with smaller rivals.
- Despite a rush of new Korean cosmetics manufacturers, company closures are surpassing entries in an increasingly competitive market.
South Korea's cosmetics original design manufacturer (ODM) industry is experiencing record global demand, drawing more firms into the market. As per the Korea Health Industry Development Institute, total revenue for Korean cosmetics manufacturers rose 15.8% year over year to ₩27.48 trillion (~ $18 billion USD) in 2025, significantly outpacing the broader biohealth industry's sales growth.
K-Beauty Export Boom Favors Industry Giants?
The expansion has been supported by strong overseas demand. Notably, Korean cosmetics exports reached a record $11.4B last year, making beauty products the country's largest export among major consumer goods categories like agricultural and fisheries products, fashion apparel, household items, and pharmaceuticals.
But the boom is not converting into broad-based gains, as revenue seems to remain heavily concentrated amongst the industry's largest players like Kolmar Korea, Cosmax, Cosmecca Korea, and C&C International. These companies generated ₩6.05T (~ $4B) together in consolidated sales last year, accounting for nearly one-quarter of the industry's total revenue despite over 4,100 cosmetics manufacturers operating nationwide.
KOLMAR KOREA POP UP STORE SEOUL
And that concentration is broadening as more entities try to enter the market. Although the number of companies obtaining new ODM licenses has surged over the past three years, the total number of cosmetics manufacturers has nevertheless declined for two consecutive years. These figures released by the Ministry of Food and Drug Safety kind of suggest that company closures are outpacing successful new businesses even as more firms attempt to capitalize on the global K-beauty boom.
New ODM Entrants Face Tough Survival Test
Strong export demand is what attracts new manufacturers despite the tough competitive landscape. Analysts say established ODM companies have been the key beneficiaries as beauty brands constantly rely on suppliers with proven production capacity, global client networks, and the ability to handle bigger and more diversified product portfolios.
“Growth is being driven not by rising orders from a handful of customers but by broader export expansion across clients and an increase in stock-keeping units,” Han Yoo-jung, an analyst at Hanwha Investment & Securities, told the Korea JoongAng Daily. Han further added that stronger exports from domestic customers are projected to continue supporting earnings growth.
For newer participants, however, rendering sustainable profits from market demand has proved to be a far more difficult task to conduct. Monami Cosmetics, the beauty subsidiary launched by stationery maker Monami in 2023, stayed in a loss-making position for a third consecutive year, reporting revenue of about ₩3.9B (~ $2.6 million) while posting a net loss of roughly ₩4.8B (~ $3M). Meanwhile, Sunjin Beauty Science, which entered the ODM business last year, also accounted for an operating profit decline of about 42%.
All these instances showcase that manufacturing capabilities alone are no longer sufficient enough to compete in South Korea's increasingly mature ODM market. Kim Joo-deok, chair professor of the beauty industry department at Seoul Cyber University, told the Korea JoongAng Daily that unless companies use specialized marketing strategies or have a clear understanding of the industry's high-value-added business model, they will find it very difficult to compete with the industry leaders.
