By Kim Tong-hyung
The cosmetics industry is currently packed tighter than a case of face powder. A wave of companies rooted in boundaries like retail, food, drugs and even cigarettes are jumping into the business of selling make-up and lotions, enticed by the lavish profit reports of existing cosmetics firms that continue to exploit a fast-growing domestic market.
It bears further watching whether the weight of the new players will push the market forward or drag it down as some observers say the sector is already overcrowded.
Korea Otsuka Pharmaceutical, the local unit of the Japanese company known for health drinks and consumable products like Pocari Sweat, declared its entry into Korea’s male cosmetics market Monday by releasing skincare products under its ULOS brand. Otsuka has been selling ULOS lotion and skin moisturizers in Japan since 2008 and hopes Korea will prove to be an export market.
``Korea is the first country outside of Japan where ULOS products will be sold. The Korean market for men’s cosmetics is already becoming much larger than Japan’s, so there is definitely growth potential here,’’ said Moon Sung-ho, president of Korea Otsuka.
``The company believes that ULOS cannot be a successful global product unless proven in Korea first.’’
Korea Otsuka is not the only health industry firm attempting to dabble in cosmetics. Dongsung Pharmaceuticals, a Korean company known mostly for digestive pills and hair dye, is aggressively promoting its skincare line, A.C. Care. RNL Bio, a Seoul-based biotech company famous for stem cell treatments and dog-cloning operations, has its own cosmetics brand in Dr. Jucre.
The interest is coming from all sectors in regardless of background business. Woongjin Coway, the country’s biggest water purifier maker, sold more than 68 billion won (about $60 million) worth of cosmetic products in the past two years since launching its Re:NK brand. KT&G, the country’s biggest maker of cigarettes and ginseng-based food supplements, acquired Somang Cosmetics last year and recently launched a cosmetics line, Donginbi.
Food companies Ottogi and Samyang and retail giant Shinsegae International recently established divisions for cosmetics manufacturing and distribution.
Cosmetics have been a fast-growing business in Korea, unaffected by the recent economic downturn as consumers still find enough money in their credit-crunched wallets to spend on beauty products. According to Statistics Korea, Korean consumers spent 10.8 trillion worth of cosmetics products last year, representing nearly 10 percent growth from 2010.
Major cosmetics players like Amore Pacific and LG Life Science have been hitting new profit highs, in turn luring more firms to vie for a slice of the pie. According to government officials, there are more than 800 firms here involved in the cosmetics business.