It was Korean pop star Psy's 2012 hit "Gangam Style" that catapulted the K-pop music genre into the Western zeitgeist. As the decade comes to an end, a new trend is emerging from that same peninsula: K-beauty.
Dr. Jart on a shelf at a Sephora store in Arlington, Va., on Dec. 10, 2019.
Source: Market Intelligence
Korean beauty products are becoming increasingly sought after by Western consumers and major cosmetics companies alike. Twelve South Korean companies have been the subject of mergers and acquisitions so far this year, compared to five in Japan and just one in China. Notable deals include The Estée Lauder Cos. Inc.'s purchase of Have & Be, owner of the Dr. Jart+ brand, and Nivea-owner Beiersdorf Aktiengesellschaft's investment in Lycl, which operates a review and content platform for Korean beauty products, an influencer network, and the unpa.Cosmetics skin care brand.
These Korean brands are attractive to the cosmetics giants for their willingness to innovate, industry observers told Market Intelligence, noting the growing popularity for oil-based cleansers and treatments for brightening skin, as well as the rubber face masks pictured above.
There is nothing to suggest that the appeal of K-beauty will wane in the near future. Signs of softening in the U.S. beauty market make such companies a welcome diversification play in terms of both geography and product ranges. There is also a pipeline of targets on the horizon as private equity firms, which have also been active in the space, look to exit their investments.
Consumer Edge will not be published for the next two weeks due to the Christmas holiday. It will next be distributed Jan. 9, 2020.
Consumer Edge is a weekly collection of critical developments across the automotive; retail; and food, beverage, and tobacco industries. Drawing on exclusive analysis and value-added content from the Consumer News team at S&P Global Market Intelligence, it is published every Thursday. Click here to subscribe.
Chart of the week
Consolidation on horizon for Chinese carmakers as EV goalposts move
China's clean energy vehicles segment is on the verge of its first full-year drop in more than a decade, but Beijing continues to raise the stakes on its new energy vehicle ambitions.
USMCA creates new uncertainties for business as politicians claim victory
The auto and agriculture sectors should expect supply chain and production changes after Democrats and the Trump administration were finally able to strike a deal on hang-ups that stifled the trade agreement's passage.
FCA likely faces higher labor cost increase than rivals under UAW deal: analysts
Labor contract negotiations for General Motors, Ford and Fiat Chrysler are over until 2023.
Brands such as Dr. Jart+ have room to grow in the U.S. as skin care continues to outperform other categories of cosmetics at stores.
Alibaba, Amazon battle over US B2B market with rival platforms
Both Amazon Business and Alibaba.com are competing for American business customers at a time of high tensions between the U.S. and China.
December retail market: Retail sales grow less than expected, employment rises
Meanwhile, no retailers filed for bankruptcy during the late November through early December period.
US retail imports surged in November ahead of China tariffs
The National Retail Federation said the direct effects of the new round of Chinese tariffs will not be seen until the holiday season is over.
Lululemon's holiday strategy includes opening over 50 seasonal stores
The athletic-apparel retailer said the seasonal stores help the company attract new customers.
Food, Beverage & Tobacco
CBD companies look overseas to source hemp as US, Canada growing rules relax
Some companies are importing cannabidiol to the U.S. and Canada for a fraction of what they would for domestically grown and processed versions of the cannabis compound.
Food in Focus: Pork, beef propel producer prices higher in November
The month to Dec. 12 also included Nestlé's $4 billion decision to off-load its U.S. ice cream business to its joint venture with a private equity firm.
Dining out: US restaurant sales growth again outpaces retail in November
Year-over-year sales growth at U.S. restaurants in November grew faster than the broader retail economy for the third consecutive month.
Costco sets up 1st greenhouse, plans to grow more produce itself
Cultivating more of its own fresh produce can save the company money and the amount of product that spoils, CFO Richard Galanti said Dec. 12.
S&P 500 Consumer Staples and Discretionary indices