Korea's leading cosmetic manufacturers achieve remarkable profits in the second quarter
Kolmar Korea and Cosmax, two prominent players in the K-beauty industry, have reported impressive growth in the US market, surpassing key milestones in revenue and profitability.
In the second quarter, Kolmar Korea crossed the 700 billion won ($503 million) mark in revenue for the first time, marking a significant achievement for the company. The domestic cosmetics unit of Kolmar Korea also posted all-time highs in revenue (328.1 billion won) and operating profit (49 billion won). US sales for Kolmar Korea rose 37 percent in the second quarter, and much of this growth can be attributed to the widespread influence of the Korean Wave (Hallyu), strong product innovation, rising consumer interest in personalized skincare, and competitive pricing.
Meanwhile, Cosmax, another major K-beauty player, exceeded 600 billion won in quarterly sales for the first time, with a 13.1% increase in revenue to 623.6 billion won. The company's domestic operations saw a 20.8% increase in sales to 420.5 billion won and a 44.6% jump in operating profit to 49.9 billion won. Cosmax aims to lift profitability in the US by serving new local brand clients, and plans to boost its growth in the US by offering production services to these clients through their own plants.
The growth in K-beauty sales for both Kolmar Korea and Cosmax in the US market is driven by several factors. Product innovation and uniqueness, personalized skincare trends, value and quality balance, market expansion and premiumization, and increased consumer awareness are key drivers that contribute to capturing significant market share and growing K-beauty sales in the competitive US skincare landscape.
Interestingly, sunscreen products made up 33 percent of Kolmar Korea's cosmetics sales, indicating a growing consumer preference for sun protection. Canada returned to profit with 300 million won in earnings for Kolmar Korea, despite a drop in sales, while China remained Cosmax's largest market at 148.6 billion won in sales, though growth was flat.
In the US, the rebound of Cosmax's US unit's sales from the prior quarter is noteworthy. The ongoing popularity of Korean culture, coupled with the unique offerings and competitive pricing of K-beauty brands, continues to drive demand in the US market. As these companies continue to innovate and expand their reach, the growth of K-beauty in the US is expected to continue.
[1] Korea JoongAng Daily [2] Cosmetics Design Asia [3] Korea Herald [4] Cosmetics Design Asia [5] Cosmetics Design Asia
- The impressive growth in revenue and profitability in the US market for both Kolmar Korea and Cosmax can be attributed to factors such as product innovation, personalized skincare trends, value and quality balance, market expansion and premiumization, and increased consumer awareness.
- In an effort to further boost growth in the US, Cosmax plans to serve new local brand clients and provide production services to them through their own plants, aiming to lift profitability in the process.
