[Edaily Reporter KYUNG GYEYOUNG ] China is losing its position as the central hub for HANKOOKCOSMETICS (K-Beauty). This shift comes as Western markets, such as the U.S. and Europe, are emerging as new export hubs. Major cosmetics companies, which had previously relied heavily on China, are also rethinking their overseas business strategies with a focus on the U.S. and Europe.

According to import-export trade statistics from the Korea Customs Service released on the 27th, the share of cosmetics exports (based on skincare and color cosmetics, including suncare) to Greater China—including China, Hong Kong, and Macau—and Taiwan stood at just 18.0% in July. This represents a drop of nearly 10 percentage points from 27.8% in January—a decline of nearly 10 percentage points in just half a year. In contrast, the U.S.’s share rose from 18.0% to 21.8% over the same period. Exports to the top five European cosmetics markets—Germany, the U.K., France, Italy, and Spain—totaled $94.61 million last month, raising their combined share to 8.6%.

The decline in the Greater China region’s share of K-Beauty exports is attributed to strong performance in North America and Europe. While cosmetics exports to the U.S. totaled $239.39 million—a 43.1% increase compared to the same month last year—exports to the Greater China region and Taiwan totaled $198.09 million, rising by only 11.5%. Exports to the U.S. surpassed those to China last May and, last month, also surpassed exports to Greater China and Taiwan.

Indie brands are leading the charge in markets such as North America and Europe. Brands such as Medicube, Joseon Beauty, Anua, and Skin1004 have experienced significant growth by targeting the 10-20 age group through social media, leveraging their unique ability to make quick decisions. The popularity of K-culture has sparked growing interest in Korean-style skincare, and the manufacturing capabilities of major ODM (Original Design Manufacturing) companies like COSMAX, INC. and KOLMAR KOREA are also cited as key factors behind the K-Beauty boom.

Traditional powerhouses that were heavily reliant on China—such as AMOREPACIFIC CORPORATION(090430), LG H&H(051900), and AEKYUNG INDUSTRIAL(018250) —are also shifting their business focus to regions outside of China. AMOREPACIFIC CORPORATION has already reduced the share of its sales in Greater China to 10.6% in the second quarter. This is due to the company’s strategy of “selection and concentration”—streamlining operations in China through measures such as the closure of Laneige and Mamonde stores, while simultaneously securing local distribution channels in North America and Europe, including Sephora, Costco, and Amazon.

LG H&H has also seen the share of its sales in China drop to 11% as of the second quarter. Since the second half of last year, the company has been adjusting supply volumes to domestic duty-free channels and rebranding its luxury brand, The History of Whoo, to solidify its premium-focused position in China. In North America, it is restructuring its portfolio by expanding offline stores for brands such as Dr. Groot, The Face Shop, and Hins. AEKYUNG INDUSTRIAL is also accelerating its overseas diversification strategy, having first launched its new brand Signic in the U.S. last year and appointed a global ambassador for its flagship brand, AGE20’S.

Kim Ju-deok, Distinguished Professor in the Department of Beauty Industry at Seoul Cyber University, stated, “K-Beauty has been able to thrive thanks to the improved national image brought about by K-culture, as well as the support of an ODM production network capable of responding immediately to market demand.” However, he added, “For the current K-Beauty boom to continue, it must be underpinned by technological capabilities based on solid basic research.”