The K-beauty Takeover: South Korean Brands Look To The US For Expansion

With K-pop and K-drama gaining global attention, South Korean companies have used product placements to sell everything from stick balms to LED face masks, with the US market being the main target. Photo: stocksnap.io

As South Korean cosmetics gain popularity in the US, the world's biggest market for beauty products, personal care startups in the east Asian country are seeing a surge in dealmaking demand.

Seoul, long a destination for beauty services, last year became the top exporter of cosmetics to the US, overtaking France, according to the US International Trade Commission.

In the same period, South Korea's total cosmetics shipments hit a record US$10.2bil (approximately RM45.4bil), from US$7.5bil (RM33.4bil) in 2020, according to the Korean Food Ministry. 

That kind of growth has spawned interest from L'Oreal SA to Archimed SAS in Korea's personal care assets, with the industry bagging a record 18 deals worth 2.3 trillion won (RM6bil) in 2024.

Although it lags past years by value, the pace of activity alone has one advisory firm convinced that the deals momentum will continue.

"Private equity funds are paying more attention to Korean cosmetics," said Manhwi Han, a deal partner at advisory MMP.

"Given the strong growth of exports in the US, we expect the M&A (mergers and acquisitions) boom will definitely continue this year." 

The deals boom is widely attributed to the K-culture wave, making the cosmetics industry a collateral beneficiary alongside the South Korean food and culinary sector.

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