South Korea 2017 Cosmetics Trade Surplus Exceeds 4 Trillion Won

Takehome:

South Korea's export diversification strategy in Southeast Asia and Europe has spurred cosmetics trade surplus in 2017 to exceed 4 trillion won for the first time. 

According to Korean MFDS, Korean cosmetics trade surplus in 2017 was 4.26 trillion won, an increase of 18.5% compared to 2016 (3.59 trillion won). The value of Korean cosmetics industry in 2017 was 13.52 trillion won, up around 3.6% from the value in the preceding year (13.51 trillion won). Products that contributed the most to this growth are skin care products (7.62 trillion won), make-up (2.14 trillion won), hair care (1.53 trillion won) and body cleaning products (1.26 trillion won).

Reasons for Trade Surplus Record:

1. Export diversification strategy. The main export destinations of cosmetics is expanded from China to Southeast Asia and Europe;
2. Hosting of Cosmetics and Beauty Forums in Vietnam and Indonesia;
3. Good use of information provided from small and medium-sized cosmetics export service centers;
4. Export support policies. Korean government improves regulations to assist cosmetics export.

Characteristics of 2017 Korean Cosmetics Production：

• Export market diversification；
• Robust growth of trade surplus and export volumes. Among them, the largest export volume is to China；
• Continuous growth in cosmetics production. Functional cosmetics production grows steadily.

Detailed Data

Korean cosmetics trade turned an important corner in 2012 and began to become profitable. Since then it has demonstrated trade surpluses for six consecutive years. Cosmetic export value in 2017 was US$4.94 billion. The export value to China mainland was US$1.93 billion, ranking first. Followed by Hong Kong (US$1.22 billion), the United States (US$445.5 million), and Japan (US$225.4 million). Among Southeast Asian countries, Vietnam and Indonesia's export value largely increased by 96.9% and 60.8% respectively compared with the preceding year.

Functional Cosmetics Production

In 2017, the production value of functional cosmetics was 4.86 trillion won, up 9.3% from 2016 (4.44 trillion won). The average growth rate of functional cosmetics in the past five years remained at 17.9%.

The production value of single-function products such as whitening, anti-wrinkle products, and sunscreens decreased, while the production value of multi-functional products was 2.36 trillion won, an increase of 5.5% compared with 2016 (2.23 trillion won), indicating increased demand for multi-functional products.

As the range of Korean functional cosmetics expanded on May 17, 2017, original quasi drugs were under cosmetics management. The production value of these newly added functional cosmetics was 549.9 billion won, accounting for 4% of cosmetic whole production value.