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Consumer Edge will not be published for the next two weeks due to the Christmas holiday.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.
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