U.S. President Donald Trump postponed the enforcement of the 'TikTok ban law,' allowing the K-beauty industry to breathe a sigh of relief. This is because TikTok, a short-form social media platform, plays a significant role in the North American expansion of K-beauty.
According to the U.S. International Trade Commission's import statistics for the 22nd, the import amount of Korean cosmetics to the U.S. from January to October of last year was $1.4 billion (2.6 trillion won), surpassing France, which had previously ranked first.
Industry analysis suggests that this outcome resulted from the strategy of promoting products on TikTok and selling them on Amazon.
In particular, this strategy is considered one that small indie corporations without capital or local networks can easily attempt, making it a strategy that corporations aiming to enter the U.S. market must adopt.
◇ What is happening to TikTok, the driving force behind K-beauty's growth in the U.S.?
However, tensions increased in the domestic cosmetics industry when the U.S. Congress enacted the 'TikTok ban law' in April last year, citing concerns that TikTok's parent company, China's ByteDance, poses national security threats by collecting personal data of Americans on a large scale.
The law stipulates that if ByteDance does not sell its U.S. business rights to an American corporation by the 19th of this month (hereinafter local time), new downloads of the TikTok application will be prohibited. As a result, TikTok suspended app operations on the night of the 18th. However, on the 19th, President Trump announced an extension of the deadline for the sale of TikTok's U.S. business rights and some services were restored.
On the 20th, President Trump actually ordered a 75-day suspension of TikTok-related actions. He reportedly suggested to ByteDance that they establish a U.S.-China joint venture in which U.S. corporations would secure over 50% equity and mentioned the possibility of imposing tariffs if China does not approve.
Earlier, during his first term, President Trump had pushed for a ban on TikTok, but he changed his stance during the election campaign last year, using TikTok for campaigning. When asked about the reason for the postponement of the TikTok ban law during the signing of the executive order on the 20th, Trump replied, "Because I need to use TikTok."
◇ Popularity on TikTok correlates with K-beauty's sales in the U.S.
For the K-beauty industry, TikTok is an essential platform for entering the U.S. market. According to a report titled 'The Second Wave of K-beauty' published by K-beauty distributor Landing International, the hashtag (#)KBeauty on TikTok has reached 4.4 billion views. The most-viewed K-beauty brand was Anua (196.77 million views), followed by Numbers In (189.45 million views), Chosun Beauty (131.59 million views), Laneige (128.86 million views), Skin Angel (123.19 million views), COSRX (112.58 million views), and MediCube (106.86 million views).
Most of these brands have recently surged in presence in the North American market. It is interpreted that their recognition on TikTok has influenced their sales in the U.S. market.
Anua, founded in 2017, entered the North American market through Amazon sales in December 2022, with revenue jumping from 66 billion won in 2022 to 140 billion won in 2023. The secret lies in TikTok marketing. Since entering the U.S. market, Anua has uploaded 125,000 brand-related contents on TikTok, surpassing 2.4 billion cumulative views. The representative product, the mugwort cleansing oil, has over 300 million views on the hashtag (#anuacleansingoil).
The reason TikTok has significantly influenced the increase in demand for K-beauty in the U.S. is that the primary user demographic of TikTok, Generation Z (ages 16-24), is also the main customer base for K-beauty. According to a Mintel report, U.S. Generation Z accounts for 33% of K-beauty consumers and spends $5 more annually on K-beauty products compared to the average consumer. The millennial generation (ages 25-40) also constitutes 43% of the market.
◇ 75-day extension of the TikTok ban law, concerns persist... 'Seek alternatives to TikTok'
With the postponement of the TikTok ban in the U.S., the domestic cosmetics industry is feeling relieved. A representative from a cosmetics company said, "Even if the TikTok ban is implemented in the U.S., TikTok's influence extends to Southeast Asia and Europe, so we will not stop TikTok marketing," adding, "We are monitoring the movements of users."
There are also movements to expand promotional channels to alternatives like Xiaohongshu (小红书, RedNote). Launched in 2013, Xiaohongshu is a platform that combines user-generated content with online shopping. Following the suspension of TikTok's services in the U.S., so-called 'TikTok refugees' flocked to Xiaohongshu, resulting in over 700,000 new sign-ups over the two days from the 15th to 16th.
However, there are concerns that Xiaohongshu, a Chinese app, may also face U.S. sanctions like TikTok.
There are voices in the industry that suggest moving away from the viral marketing strategy focused on TikTok users and adopting a diversified branding strategy from a long-term perspective. A representative from a digital content solution company noted, "The likelihood of the U.S. implementing the TikTok ban law appears to be low," but emphasized, "It is necessary to closely monitor the movements of major TikTok creators and users active in the U.S. and respond quickly to platforms that could yield reflexive benefits."