South Korea’s cosmetic industry is in deep trouble. Market experts say that this industry, which has become a center of attraction for investors all over the world, has been hit hard by the Corona epidemic. Due to the change in lifestyle of people due to the epidemic, there has been a tremendous decline in the sales of cosmetics.
Between 2010 and 2014, foreign companies were vying to buy South Korean cosmetic companies, according to a report by Samjong KPMG, an agency that studies Korean industries. During this time these companies invested 21.5 million dollars in this area. In that period cosmetics made in Korea were taken to markets around the world.
According to Samsong KPMG, South Korea remained the fourth largest exporter of cosmetic products in the world from 2014 to 2019. Exports of these products brought in $ 5 billion of foreign exchange over the years. During this period, multinationals such as Estee Lauder Companies Innes and Goldman Sachs invested in South Korea’s cosmetic industry.
Goldman Sachs invested in the GP Club company, which led its owner Kim Jung Woong to become one of South Korea’s wealthiest. Uniliver PCL, L’Oréal SA, and other well-known multinationals also invested in South Korean cosmetic companies during this period.
But the Corona epidemic has hit South Korea’s beauty business tremendously. Demand for cosmetics has declined due to social distancing and work from home. Due to this, many stores which have survived these products have been closed. In the US, retail sales of beauty products have fallen seven percent this year. The US was the third largest market for South Korean products before the epidemic.
The number of tourists coming to South Korea due to the Covid-19 epidemic also registered a steep decline. Especially tourists from China used to come here, who used to buy huge amount of tax free goods here. Many of them used to take goods from here and sell them in their country. But after the epidemic, the emphasis has been on indigenous production in China. Hence the demand for cosmetic products to be imported from outside has also decreased there. Leena Oh, an analyst with Seoul-based Abest Investment and Securities Company, told a newspaper: “It is naïve to think that South Korean brands will once again become popular with Chinese customers.”
Cape Investment and Securities Company analyst Hee-mi Kim has said that the Kovid epidemic has led to a drop in people’s spending on cosmetic items. He said that people are spending money only on skin care (skin care) or essential products for treating facial problems. In fact, other reports have pointed out that people are currently focused on other things. Sales of products claiming to develop anti-bodies in South Korea have grown rapidly in recent months. Due to this, there has been a huge jump in the earnings of pharma companies like Salatreon.
Apart from this, a new trend is that of online beauty industry. Cosmetic industry major L’Oréal has launched a beauty training digital service. It has launched a total of 300 such services. Sales of the company fell by 12 per cent in the first half of this year. But now she hopes that with digital services she will compensate to a large extent her losses.