Beauty could be South Korea’s new major export as other industries in the country decline, a report suggested this week. Overseas sales of Korean beauty products increased by 73% in 2015, while all of the country’s industries collectively declined by 4.9%. Beauty’s growth eclipsed South Korea’s 13 flagship industries, which include cars, chemical and steel. And for the first time, Korea exported ($1.067 billion) more beauty products than it imported ($978 million) this year.
Korean brands certainly have the digital prowess for fast growth, based on L2 data. The Digital IQ Index: Korea Beauty, which assesses the digital performance of 30 global and 34 local brands in the country, finds local brands are dominating the top rankings. Seven of the top 10 brands in the Index are Korean, with AmorePacific having the highest Digital IQ of all conglomerates with brands in the Index.
A few charts point to the digital gap between local and global brands in the country. Just 18% of local beauty brands in Korea offer no link to e-commerce (whether through an e-tailer or directly on the brand site) vs. 30% of global brands in the country. Online sales make up 9% of the Beauty market in Korea, on par with the U.S.
The following chart shows the top 10 brands in search volume on Naver, of which the leading seven are local brands.