K-Beauty Market Sees Major Players Boost Marketing Amidst Shifting Strategies
Leading South Korean beauty conglomerates, including Amorepacific and LG Household & Health Care, are significantly increasing their advertising and promotional expenditures. This strategic shift comes as emerging K-beauty brands demonstrate success by leveraging social media, short-form video content, and global platform exposure to rapidly gain traction in international markets. In response, major corporations are expanding their investments in these areas, focusing on enhancing consumer engagement.
Industry analysis suggests that the competitive landscape in the K-beauty sector is increasingly defined by online visibility and the ability to capture consumer feedback. Consequently, established companies are actively adopting marketing strategies previously pioneered by independent brands.
Financial Figures Highlight Increased Marketing Investment
According to publicly available financial data, Amorepacific’s advertising and sales promotion expenses for the first quarter of this year reached 147.6 billion won, a 19.7% increase compared to the same period last year. During this time, the company’s sales grew by 6.4% to 1.01358 trillion won. The advertising expenditure outpaced sales growth by a factor of three, leading to an increase in the ratio of advertising costs to sales from 11.6% in the first quarter of last year to 13.0% this year.
LG Household & Health Care also reported a substantial rise in its advertising and sales promotion budget, with 114.8 billion won spent in the first quarter, an 11.7% increase year-over-year. However, sales for the same period saw a slight decrease of 6.8%, falling to 1.5766 trillion won from 1.6918 trillion won in the previous year. Despite declining sales, the company’s increased marketing investment resulted in a rise in the advertising cost-to-sales ratio from 6.1% to 7.3%.
Evolving K-Beauty Growth Model
The heightened advertising spending by major beauty firms is attributed to the new growth formula established by independent beauty brands. Historically, companies like Amorepacific and LG Household & Health Care relied on well-established brands such as Sulwhasoo, Hera, Laneige, Hu, and O Hui, generating stable sales through department stores, duty-free shops, and physical retail channels.
However, as the K-beauty market diversifies beyond China to include North America, Japan, and Southeast Asia, there is a growing necessity to build brand recognition among a wider international consumer base. This shift in market focus necessitates new marketing approaches.
From Brand Recognition to Platform-Driven Demand
Recent market research indicates a transformation in the K-beauty sector’s growth structure. Previously, the model focused on building brand recognition first, then expanding sales channels. Currently, the trend is shifting towards demand being generated first through various distribution channels and platforms, followed by the expansion of brand awareness.
This new paradigm emphasizes products gaining consumer traction on platforms like TikTok, e-commerce sites, and global multi-brand platforms, with subsequent expansion into offline channels. Independent brands have effectively utilized this strategy, often referred to as ‘low-cost marketing,’ as a key driver of their growth.
Independent Brands Lead the Charge in Digital Marketing
APIEAR’s advertising and sales promotion expenses surged by 147.1% year-over-year in the first quarter, reaching 116.7 billion won. The ratio of advertising costs to sales also increased from 17.8% to 19.7% within the same period.
Dalba Global also saw a significant increase in its marketing efforts, with advertising and sales promotion expenses rising by 33.8% year-over-year to 22.9 billion won in the first quarter. While sales grew by an impressive 50.5% to 171.2 billion won, the advertising cost-to-sales ratio saw a slight decrease to 13.3% from 15.0%. It is noteworthy that Dalba Global has consistently maintained aggressive marketing activities, allocating approximately 23% of its total sales to advertising over the past two years.
Major Companies Embrace Online and Short-Form Content
Large corporations are also actively expanding their online and short-form video-based marketing initiatives. Last November, Amorepacific launched the global campaign ‘SHINE YOUR SCENE’ for its brand Mieum, featuring its ‘Perfect Serum.’ This campaign involved TikTok challenges in the United States, Thailand, and Indonesia, with participation from the K-pop group aespa and various influencers.
LG Household & Health Care is also intensifying content collaborations with local creators on platforms like TikTok and Instagram, particularly following the recent entry of its brand Dr. Groot into Sephora. This strategic focus on online channels aims to enhance brand visibility and consumer interaction in key international markets.
Future of K-Beauty: A Collaborative Ecosystem
Experts observe that the recent growth in the K-beauty market is primarily driven by product competitiveness and consumer response, rather than solely brand recognition. The industry structure has evolved from individual brands expanding internationally to a more interconnected ecosystem where online and offline channels complement each other, driving global demand through a channel-centric approach.
