Beauty and CPG Business Lead at L2 Eunice Byun says South Korea is ripe for beauty e-commerce growth as it is the most digitally connected country in the world. Nearly 80% of South Korea’s population is connected to the internet, which has resulted in a vibrant e-commerce market where the average consumer spends $1000 a year online.

Much of this growth is driven by local brands that have the home base advantage. Seven of the top ten brands In L2’s Digital IQ Index: Beauty | Korea are local, with Etude House in the lead. Here are a few pointers global brands can take from the locals:

Local brands are winning in a vibrant e-commerce market. Transactions were up 14% year-over-year in the second quarter of 2014, and local brands are outdoing global brands in e-tailer visibility and e-tailer content investment. Additionally, 80% of local brands are making it easier for consumers to purchase online through direct-to-consumer e-commerce or links to third-party retailers such as Lotte.com and Hyundai Hmall.

– Local brands are experimenting with local social media platforms such as KakaoTalk, and seeing success. In Korea, Kakao Talk has three times the users of Facebook. Only a quarter of brands in the L2 study are active on KakaoTalk’s new feature PlusFriend, and most of those are Korean. Gifted brand Innisfree has the most followers on PlusFriend (1,353,383) and uses it to broadcast coupons and events.

Local brands are investing in taking consumers down the purchase funnel faster. They are using that through user reviews and incentives such as coupons and contests. For example, Sulwhasoo and Sooryehan are linking to reviewers’ blog posts on popular search engines such as Naver and Daum.

 

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