Back in 2012, Psy made the world dance in Gangnam Style bringing South Korea to the spotlight around the world. Fast-forward to 2015 and South Korea is still in the limelight through not only the popularity of k-pop and k-dramas around Asia but also due to the rise of the k-beauty phenomenon which is transforming the beauty industry. AmorePacific (the country’s largest beauty player) has been one of the key beneficiaries from this and its owner Suh Kyung-Bae became the country’s richest man in July 2015, showcasing the success of Korean companies’ expansion.
Korea mania expands in Asia and moves beyond beauty
The influence of Korean dramas and Korean pop has been unprecedented, not just in the beauty industry but also for luxury, apparel, consumer electronics and consumer food services, with items featuring in music videos and TV dramas in high demand among consumers.
Particularly, 2014’s soap opera My Love From The Star has been so influential that the male star of the show, Kim Soo-Hyun, has become the face of Korean beauty brand Beyond (LG Household & Health Care) for women’s skin care. Furthermore, the so-called chimek trend (a play on the Korean words for fried chicken and beer), which was the favourite snack of the female actress in the show, became an instant success in China. Product placements in the show including those from luxury brands such as Cartier, Chanel, Goyard, Christian Dior, Paul Smith, DKNY and Céline have helped boost demand for the particular items worn and used by Jun Ji-Hyun(the female protagonist) in South Korea, Hong Kong and China. Tiffani’s sponsored another TV drama called The Inheritors, while Jaeger-LeCoultre sponsored The Temptation in 2014. Both brands saw a surge in demand and google searches for the products featuring in the shows.
Han-ryn (Korean Wave) has also hit Singapore where sales of brands such as Sulwhasoo (6% CAGR globally from 2009-2014) and Yves Saint Laurent were boosted from their placement in Korean dramas. In Taiwan, international brands felt a slowdown as young consumers turned to Korean brands whose availability keeps increasing in all distribution channels for fashion and beauty. Munsin Garment Corp introduced Korean brands into its department stores to cater for the increasing demand. In Indonesia, the increasing popularity of k-pop has affected not only fashion and beauty but children’s wear too. Imported fashion from Korea is not only considered cooler but is also more affordable than international brands.
Magnum Ice Cream launched Magnolia K-Pop ice cream in the Philippines riding on the popularity of Korean pop culture in 2013 targeting young consumers who also switching from American brands (that became popular due to Hollywood and American TV series) to Korean in apparel and footwear.
Korean wave hits the West
Outside Asia the markets most touched by the Korean wave have been the US and Canada. Large Asian immigrant populations in Canada for example transformed the market to a heaven for Korean brands with malls featuring everything from Korean food, fashion and beauty. In the US, CNN was reporting the emergence of the CHIMEK trend and beauty blogs include extensive features on Korean beauty. AmorePacific has introduced a variety of its brands in drugstores such as Target and CVC while its premium lines are selling in Bloomingdales. While Korea mania is still in its infancy in the US, dedicated retailers such as Peach & Lily have seen a surge in sales while two American bloggers that specialise in Korean beauty have even launched a book called Korean Beauty Secrets showcasing how k-beauty is suitable for everyone not just for consumers of Asian origin.
International brands have been exploring consumers fascination with South Korea beauty with L’Oréal launching Korean concepts (BB creams with Garnier and air-cushion foundation with Lancôme) while LVMH has formed a partnership with AmorePacific to create new products using its air cushion technology for Christian Dior. Estée Lauder’s investment in Have & Be Co. Ltd(owner of Korean brands DR Jart+ and Do The Right Thing) as well as La Prairie’s and Chanel’s launch of products such as essences and emulsions are other ways that multinationals are looking to tap into consumers increasing desire for Korean-inspired beauty offerings.
While Europe remains fairly unpenetrated, it is expected to be hit next by the Korean wave with many beauty brands already entering the market. While Dr Jart has been selling in Boots for a couple of years, in 2014 Suqqu set up shop in Fenwick’s in London while Too Cool For School entered Galleries Lafayette in Paris. K-beauty is expected to change the playing field in Europe’s competitive market, but Korea’s influence on other industries such as fashion, food and electronics is likely to be less heavy. A high influx of tourists from Asia is expected to drive demand for other industries, unlike for beauty where local demand for Korean products is already surging due to the heavy media buzz around the innovation, efficiency and affordability of these products as well as their quirky image.