Thanks to the global 'K-Beauty craze', domestic cosmetics companies expanding production and exports are expected to set new record sales for the second quarter of this year. However, the inter-tariffs of the U.S. government have emerged as a variable for the second half, prompting companies to respond by expanding offline channels and diversifying export regions.
According to financial information provider FnGuide on the 13th, global cosmetics original design manufacturer (ODM) COSMAX is estimated to record sales of 647.9 billion won and operating profit of 61.5 billion won in the second quarter. This represents a 17.5% increase in sales and a 31.6% increase in operating profit compared to the same period last year.
Earlier, COSMAX recorded its highest quarterly sales ever (588.6 billion won) in the first quarter of this year, and it is expected to break that record again in the second quarter. COSMAX has factories in Korea, China, the United States, Indonesia, and Thailand. Its annual production capacity exceeds 1.77 billion units.
Kolmar Korea, which shares the ODM market with COSMAX, is estimated to record sales of 739 billion won and operating profit of 80.4 billion won in the second quarter. Compared to the second quarter of last year, sales are expected to increase by 11.9% and operating profit by 12.1%. It is also expected to set a new record for quarterly performance. Kolmar Korea has a particular strength in the sunscreen sector, having produced products such as 'Clear Rice Sunscreen' from the brand Joseon Beauty, which is credited with leading the K-Beauty craze in the U.S.
APR, which is gaining overwhelming popularity in the U.S. with its brand 'MediCube', has its second quarter performance estimates documented at sales of 270.3 billion won and operating profit of 52.6 billion won. This represents a 73.8% increase in sales and an 87.7% increase in operating profit compared to the same period last year. According to Hana Financial Investment, it is estimated that APR recorded sales of 70 billion won in the U.S. solely from the MediCube brand in the first quarter. This achievement marks it as the top-selling single brand among domestic cosmetics companies.
d'Alba Global, which gained recognition with its so-called 'flight attendant mist' First Spray Serum product, is projected to record sales of 128.4 billion won and operating profit of 36.1 billion won in the second quarter. This indicates increases of 74% and 104% in sales and operating profit, respectively, compared to the same period last year. d'Alba Global has maintained a stock price that is over double its public offering price since going public at the end of last month.
Although the outlook for first-half performance is bright, there are concerns that the inter-tariffs of the U.S. government may act as a variable in the second half. The U.S. government is currently negotiating trade agreements with various countries after suspending inter-tariffs for 90 days on April 9. If negotiations are not concluded within the period, tariffs are expected to be imposed starting on the 9th of next month as previously announced. Given that the tariff rate could reach 25%, the industry consensus suggests there is a strong incentive for Korean companies to raise prices in the U.S.
The United States has already emerged as a major export market for Korean cosmetics. According to the Korea International Trade Association, the export scale of Korean cosmetics to the U.S. last year was recorded at $1.7101 billion (approximately 2.3 trillion won), reflecting a 54.3% increase compared to the previous year. The proportion of Korean products in the U.S. cosmetics import market also recorded an increase of 5.9 percentage points to 22.4%, capturing the top market share.
In this situation, domestic cosmetics companies that have entered the U.S. are expanding their business scope from online to offline to achieve both growth and stabilization. The plan is to absorb the impact of the tariffs by enhancing brand loyalty and expanding the base of regular customers.
In fact, U.S. distribution chains are increasingly welcoming Korean cosmetics brands. Target plans to expand K-Beauty sections to all its stores this year and increase the number of brands it carries. Walmart, the largest offline channel in the U.S., has also opened a beauty-specific corner called 'Beauty Space' to sell products from Korean cosmetics brands since the end of last year.
A trend of diversifying exports to regions outside the U.S. is also observed. According to the Korea Customs Service, the export amount of domestic cosmetics to Europe from January to April of this year was $510 million (approximately 695 billion won), surpassing the U.S. for the first time during the same period ($490 million, approximately 668.4 billion won). There is also a trend of expanding export amounts to the Middle East and China.
Ha Hee-ji, a researcher at Hyundai Motor Securities, noted, “In the first half of this year, U.S. exports slightly slowed down due to inventory digestion and tariff imposition, but domestic cosmetics brands are offsetting this with growth in the Middle East and Europe. We expect to see tangible expansion of brand presence in the future.”