Custom Cosmetics in South Korea: Market Overview and Future Direction

On Mar 14, 2020, South Korea MFDS released the list of qualified custom cosmetics compounding managers. Regulations related to custom cosmetics also became effective ^[1]. Custom cosmetics are products that are blended or dispensed at the sales place by a qualified compounding manager. These products are developed to match consumer skin conditions and preferences for color and fragrance.

According to Mintel' s survey of 2000 cosmetic consumers over 16 years old, 61% are interested in custom cosmetics. BeautyNury reported that as of Mar 2019, a total of 52 stores, including specialty shops and duty-free shops in South Korea, conducted custom cosmetics pilot operations to gauge consumer interest and assess the feasibility of more significant investment ^[2].

Source: Tiger Kim' s Webinar

1. Prediction of South Korean Future Custom Cosmetic Regulation

According to Mr. Tiger Kim' s webinar, MFDS will introduce additional guidelines on custom cosmetics soon. The guideline will clarify the standard for sales, facilities, hygiene management of workers, facility and equipment, storage management of content and ingredient, safety management after sales, etc.

Smaller companies will have difficulty meeting the administrative requirements of custom cosmetics. One of the major stumbling blocks is that all customs cosmetic sellers shall sign a supply contract with Market Authorization Holder (MAH) and hire a licensed compounding manager at each store. Therefore it is expected that the sales of custom cosmetics will be limited to industry giants at the beginning. However, if consumers’ demand for custom cosmetics increases in the future, the regulatory compliance requirements for custom cosmetics sellers could be reduced.

2. South Korean Cosmetic Industry Giants' Movement

• Amore Pacific – 3D Printing Facial Mask

Amore Pacific plans to launch "IOPE Custom 3D Facial Mask" technology at the end of April, 2020. In November 2017, IOPE introduced its 3D printed facial masks and tailored essences at the IOPE Lab. The Tailored Facial Mask Pack 3D Printing System also won the Innovation Award in "CES2020" (Consumer Electronics Show 2020) ^[3].

Source: BeautyNury

The standard type of sheet masks are unable to meet the demands of all consumers or fit every face size, facial features, skin tone, etc. of all consumers. The Tailored Facial Mask Pack 3D Printing System uses a 2D mask drawing based on images of the user’s face, measuring the positions of the eyes, nose, mouth, forehead, cheeks, chin, etc., and then selects ingredients that are suitable for the users skin. Finally, the high-speed 3D printer is used to print the hydrogel to make a custom facial mask. Customers who visit the store can get the custom facial mask made on-site within 5 minutes and use it immediately ^[4].

• Kolmar Korea – Genetic Testing

According to BeautyNury ^[5], consumers are willing to pay an average price of about US$ 62 for custom cosmetics, which is US$ 18 above the normal price of conventional cosmetics. Consumers looking to get the ultimate in custom cosmetics are now also considering genetic testing.

Kolmar Korea is working with EDGC to develop custom cosmetics based on genetic analysis. One analysis involves looking at vitamin C metabolism. Researcher Yang Jihye believes that accurate skin testing and genetic analysis of individuals is the next frontier in the cosmetics sector ^[6].

Yang Jihye also said, "With the development of skin diagnosis and analysis technology, it is expected that the custom cosmetics industry will expand. Liquid products such as toners and essences that are easy to mix are more suitable for custom cosmetics. Production methods for small packaging and small capacity cosmetics will increase."

3. Customs Cosmetics in China

At China International Import Expo 2019, custom cosmetics were well represented, including lipsticks, liquid foundations, fragrances, facial masks, essences, and other commonly used skincare and makeups. Intelligent skin diagnosis systems, precision skincare systems, smart phototherapy beauty instruments also featured strongly. Gao Xiangqin, president of Amore Pacific China, believes that customization is the future of the cosmetics industry ^[7].

"Many companies have seen the huge potential of customization, and the awakening of consumer awareness will also catalyze the popularity of the customization model. In the Chinese market, there are 500 million young people. They don’t necessarily want expensive products, but want products that show their personalities. And they are willing to pay a higher price for customization."

However, before entering Chinese market, each cosmetic product needs to be tested and filed with competent authorities. Currently this is an insurmountable obstacle for custom cosmetics in China ^[8].