[Edaily Reporter Kim Ji-woo ] The two giants of K-Beauty are betting on differentiated technological capabilities backed by their unrivaled research and development (R&D) strengths. While indie brands are growing rapidly in the global market by leveraging quick product planning and manufacturing partnerships, major companies such as AMOREPACIFIC CORPORATION and LG H&H are solidifying their foundations for long-term growth through strategies that include in-house research achievements, the development of innovative products based on those findings, and the enhancement of customer-tailored solutions.

According to industry sources on the 1st, AMOREPACIFIC CORPORATION’s cosmetics R&D output last year totaled 50 projects, an increase of nearly 50% from the previous year’s 34 projects. So far this year, the company has already recorded 20 cosmetics R&D projects in the first quarter alone. The scope of its research achievements is also expanding into various fields, including skin efficacy, ingredients, and formulations.

Last year, AMOREPACIFIC CORPORATION achieved research results in areas such as AI (artificial intelligence) skin analysis, beauty DEVICES, and high-potency ingredients like high-concentration vitamin C, retinol, and PDRN. This year, the company also presented research findings at the International Society for Dermatobiophysics and Imaging, elucidating aging patterns by facial area using AI-based skin image analysis technology.

AMOREPACIFIC CORPORATION spokesperson stated, “We are focusing on providing a differentiated customer experience through the development of innovative products based on skin research, securing next-generation beauty technologies, and strengthening personalized solutions for customers,” adding, “We will continue to invest in R&D to secure long-term brand competitiveness and innovation capabilities rather than pursuing short-term results.”

Despite a decline in sales, LG H&H is strengthening its R&D efforts with the goal of becoming a “science-based beauty and wellness company.” The company’s R&D expenditure as a percentage of sales increased from 3.4% in 2024 to 3.7% last year. While sales last year fell by 6.7% compared to the previous year, the decline in R&D spending was limited to 1.6%, meaning the proportion of R&D spending actually increased even amid cost-cutting efforts.

LG H&H explains that rather than simply increasing the number of research projects, it is taking a qualitative approach that delves deeply into core themes such as “skin and scalp anti-aging.” NAD Power24™ and Ramsidil are prime examples of this. This strategy aims to enhance the quality of R&D and strengthen differentiated technological capabilities based on achievements in academic papers, patents, clinical trials, and awards.

The company has recently unveiled research findings in the functional cosmetics sector, including AI- and data-driven results related to female pattern hair loss management. The company explains that it develops proprietary active ingredients not through simple combinations of raw materials, but by leveraging long-term R&D assets such as a skin genetic database of 60,000 Asians, hair genetic data from 60,000 individuals, 528 patents, and 148 clinical data sets.

An LG H&H official emphasized, “While total R&D expenses have decreased as part of our portfolio restructuring, the quality of our research and development has improved,” adding, “We are focusing on accumulating differentiated, proprietary ingredients and core technologies—which indie brands cannot easily replicate—rather than simply increasing the number of research projects.”

The growing importance of R&D in the cosmetics industry stems from structural changes in the beauty market. Indie brands, which have recently led the K-Beauty boom, often outsource manufacturing to original equipment manufacturers (OEMs) and original design manufacturers (ODMs) rather than producing products in-house. The problem is that this approach is also available to overseas brands.

In effect, it has become difficult to secure long-term competitiveness in the K-Beauty market based solely on brand image and product concepts. Analysts suggest that brands with manufacturing capabilities have therefore adopted strategies to boost consumer trust by leveraging research data.

Industry observers expect the trend of major cosmetics companies actively disclosing their R&D achievements to intensify further. They explain that while R&D used to serve as a foundation for internal product development, it has now become a key message for demonstrating brand credibility and global competitiveness.

An official from the Korea Cosmetics Association stated, “While K-Beauty is gaining attention in the global market, in the long term, there may be limitations to differentiating ourselves from leading overseas brands through contract manufacturing alone,” adding, “The ability to explain a product’s efficacy and the evidence to support it will become even more important in order to convince consumers.”