Consumer interest in Korean Beauty is growing and mainstream retailers are catching on. In the past year, articles about 10-step Korean skin care routines and ingredients unusual to Western consumers have flooded the pages of US beauty blogs. Hip retailers like Sephora and Urban Outfitters began carrying select products and expanding their selection over time. Department stores Nordstrom and Barneys followed suit, and just last month CVS partnered with Peach & Lily – one of the first destinations for Korean Beauty e-commerce – to sell over 100 beauty products from South Korea in 2,100 stores.
On the surface, it looks like the Korean Beauty industry in the US has nowhere to go but up. However, signs of a bubble about to deflate are beginning to emerge. Memebox, for example, abandoned its e-commerce business recently, deciding instead to focus on content and link to third-party retailers when recommending products. Furthermore, Western brands are producing and renaming products to match popular K-Beauty search terms, which means consumers can stick to tried-and-true brands while experimenting with the trend. After Korean BB creams became popular in the US, several western brands like Dior, Estée Lauder and Bobbi brown launched their own versions. Similarly, familiar brands are now promoting double cleansing, cushion compacts, and multi-step routines.
We spoke with Ju Rhyu, founder of content and consulting company Inside the Raum, who thinks Korean Beauty brands with heavy investments in the US will fall flat unless they adapt their digital practices to the US market.
“Part of the problem is that K-Beauty was always overhyped, even before it had a chance to grow. It was never as big as the press made it look,” Rhyu says. While 10+ step beauty routines and ingredients like snail slime make for great articles, they don’t indicate whether consumers are buying the products. Similarly, being picked up by a major retailer doesn’t automatically lead to outsized sales growth. Brands need to do some of the heavy lifting and market their products to consumers even after they become part of Sephora or Nordstrom’s products.
In addition to the hype, Korean brands face unique challenges, according to Rhyu. The unauthorized gray market on Amazon is strong for these brands, which drives down pricing. Brands have initially offered low prices in order to sway major retailers like Ulta, which also drives down prices for those who entered the market later.
Despite these changes, Korean beauty brands can outlast the hype as long as they don’t rely on it. Rhyu offers these tips for Korean brands thinking of or already investing in the US market:
Have an omnichannel, multi-retailer strategy. Korean brands typically shun direct-to-consumer e-commerce and focus on distribution deals with major retailers. However, a brand site can be effective for marketing, SEO, and consumer education. Furthermore, selling directly to consumers can make brands less reliant on particular retailers and enable them to show discipline around their pricing to avoid heavy discounts.
Take control of marketing and SEO/SEM strategy. Korean brands in the US typically rely on major retailers to market their products, but in reality visibility on those retailers is competitive. Brands should give out samples to generate reviews on retailer sites, which in turn leads to higher page positions and customer acquisition. Furthermore, brands should optimize their brand sites for SEO, and set aside a budget for to buy unique search terms.
Localize products. The customer base for Korean beauty brands remains narrow because products are still transported from the Korean market without any adaptation. For example, K-Beauty brands should expand the range of foundations they offer from two to three shades to at least seven to reflect the US population. And brighteners and whiteners – popular in Korea but controversial and unpopular in the US – should be reformulated and renamed as highlighters or products that produce glowing skin.
Educate the general public. Readers of beauty blogs know a lot about Korean Beauty regiments, but brands should take up educating the general public according to Rhyu. The more consumers know about K-Beauty beyond the buzz, the more likely it is to stay.