US set to surpass China as K-beauty’s top market

K-beauty’s global expansion hit a turning point in 2024. South Korean beauty brands achieved double-digit growth in key international markets, with exports to the U.S. surging 57% YoY and Japan rising 29.2%. Yet, as K-beauty gained ground overseas, its dominance in China dissipated, with exports to the mainland dropping 10%. This shift underscores a reordering of priorities for South Korean beauty brands, as the U.S. edges closer to overtaking China as K-beauty’s top export market. “The reasons are mixed,” says Davy Huang, senior manager of brand partnership at Chinese e-commerce platform JD.com Worldwide. “K-beauty is affordable in many cases in the U.S. and Japan, and early players like Peach & Lily have done a great job localizing. Many Korean beauty brands have been positioned for export from the start, constantly studying international regulations, consumer trends, and formulation strategies to maximize global appeal.” At the same time, China’s shifting retail and digital landscape has created roadblocks. While K-beauty once rode the wave of “hallyu” (Korean pop culture) in China, its current brand positioning has failed to keep pace with evolving local preferences. Why K-pop no longer works for K-beauty in China “K-beauty isn’t riding the K-pop wave in China like it does in Japan and U.S.,” Huang adds. “Brands that invested heavily in K-pop collaborations face an awkward lack of penetration in China.” This raises a pressing question: Can K-pop beauty sustain its U.S. and Japan momentum to offset the decline in China, or will brands need to rethink their China strategy? K-beauty’s surge in the U.S. is fueled by multiple factors, from expanded retail distribution to the rise of skinfluencers driving demand for Korean skincare innovations. As K-dramas gain traction on streaming platforms like Netflix, and K-pop stars expand their global influence, K-beauty is experiencing a surge in the international market under the broader Korean wave. Kantar forecasts that Korean cultural product consumption globally will nearly double to $143 billion by 2030. Niche brands like CosRx and Anua are thriving in Western markets, while major retailers like Sephora expand their K-beauty offerings. Clean beauty and soft science are a winning formula The clean beauty movement has also played to K-beauty’s strengths, with brands emphasizing gentle and science-backed hydration solutions. “Korean beauty brands have completed a new round of upgrades, focusing on mild, natural ingredients with functional benefits, like CosRX’s snail mucin serum or Man:yo’s cleansing oil,” says Huang. “This aligns well with trends in the U.S. and Japan.” Government backed tourism initiatives have further reinforced this global expansion. South Korea remains a major beauty destination, with retailers like Olive Young curating local brands for international shoppers. “Every year, hundreds of millions of travellers visit Korea, and Olive Young has done an excellent job presenting curated K-beauty selections,” says Huang. “This generates invaluable data on what brands and products work for different markets.” The U.S. is now Korea’s second-largest cosmetics export market, trailing only China – but not for long. If current trends persist, it is expected to surpass China as K-beauty’s top destination by the end of this year. China’s retreat: A temporary setback or structural shift? For years, China was K-beauty’s goldmine, accounting for over half of South Korea’s beauty exports at its peak. However, the landscape has changed dramatically. Rising economic uncertainty, growing competition from domestic C-beauty brands, and shifts in consumer preferences have eroded K-beauty’s stronghold. “China’s beauty market has become more function-driven and science-led,” says Huang. “While K-beauty focuses on hydration and mild formulations, Chinese consumers are prioritizing anti-aging and high-tech skincare.” This misalignment has hurt Korean brands. Financial reports reflect K-beauty’s struggles in China The impact is visible in financial reports. Leading K-beauty conglomerates like Amorepacific and LG have reported double-digit sales decline in China for consecutive quarters. Meanwhile, Chinese beauty brands are not just winning at home — they are expanding aggressively into Korea, with cross-border sales of Chinese cosmetics to South Korea growing 60.7% YoY in 2024. While speculation swirls around China lifting its cultural restrictions on Korean entertainment in eight years, observers are skeptical about a full-fledged K-beauty’s comeback. “It’s always difficult to regain momentum once it’s lost,” says Laurent Cibot, EVP of digital marketing and global growth at premium cosmetics R&D laboratory Inderma. “Even if restrictions are lifted, the current dynamic favors local C-beauty brands. Korean brands must work hard to stay relevant in a market where nationalism and domestic innovation drive demand.” US-Korea trade tensions: A new threat? Despite its growth in the U.S., K-beauty faces another potential obstacle: Rising trade tensions between Washington and Seoul. President Trump’s misleading claims about South Korea’s tariffs have fueled uncertainty, raising concerns over potential retaliatory measures. While tariffs alone may not derail K-beauty’s success, they could pressure pricing strategies and brand positioning. “Trade tensions will likely push Korean brands to diversify their manufacturing and export strategies,” says Cibot. “Some may explore production in Southeast Asia or even local partnerships in the U.S. to avoid tariffs. Others will strengthen their presence in high growth regions like the Middle East or ASEAN.” L’Oréal’s recent investment in Borntostandout, a niche K-beauty brand, underscores the sector’s resilience. “Despite ongoing uncertainties, beauty giants still believe in K-beauty’s power of innovation and differentiation,” says Cibot. “This proves that K-beauty remains a strategic and highly attractive category for major international players.” What’s next for K-beauty’s global strategy “Beauty products are not commodities,” says Cibot. “When Inderma sells its French brands like Dermina or Saeve in the Middle East, we’re not just selling products — we’re selling a concept, an experience. The same logic applies to K-beauty in the U.S., where strong brand equity and product differentiation can help offset pricing pressures.” In China, success will depend on recalibrating local marketing approaches. “It’s not wise to ignore China completely,” says Huang. “The new wave of K-beauty brands — like Man:yo, CosRX, and Hince — are still seeing solid growth. But to succeed they must invest in long-term localization strategies.” He cites Gentle Monster’s Haus Nowhere flagship store in Shenzhen as an example of how Korean brands can create immersive, localized experiences. Ultimately adaptability will be key. K-beauty’s global success was built on its ability to evolve — whether through pioneering cushion compacts, sheet masks, or hybrid skincare innovations. Now, the industry faces its next test: navigating geopolitical tensions, shifting consumer expectations, and an increasingly competitive global beauty market. If Korean brands can balance their U.S. expansion with recalibrating their China strategy, K-beauty’s best days may still be ahead.

US set to surpass China as K-beauty’s top market

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Published March 27, 2025

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US set to surpass China as K-beauty’s top market