North Asia Consumer: From Seoul's Innovation to Tokyo's Resilience

Covered Companies: Shiseido, Kose, LG H&H, Amorepacific, d'Alba Global, Pharma Research, APR, Fast Retailing, Ryohin Keikaku, Food&Life, Sugi

💄 K-Beauty: Expanding Global Market Dominance and Ecosystem Innovation

• The Korean cosmetics industry is growing through a unique flywheel structure combining three pillars: indie brands, ODM (manufacturing), and MCN (marketing). • Thanks to sophisticated ODM companies like Cosmax and Kolmar Korea, indie brands can launch new products at lightning speed within one to two months. • MCNs like Leferi are leveraging over 2,000 creators to deliver data-driven, personalized marketing, enhancing the credibility of Seo Hwa-baek's Drawing Game (@easobi). • The United States has emerged as the second-largest export market for Korean cosmetics. TikTok surpasses Instagram as the largest beauty purchase conversion platform • K-beauty sales in the US are projected to surpass $2 billion by 2025, a year-on-year increase of more than 37%

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📉 TNA Macroeconomic Perspective: US Cosmetics Offline Retailer Perspective - Actual Market Share

1. US cosmetics market size: $110 billion annually, compound annual growth rate (CAGR): 6%
2. Market share: US brands 90%, imported foreign brands 10%
3. Among the 10% of imported foreign brands (CAGR 1.2%), Korean brands dominate the market (Korean brands, CAGR 13-36%). 4. Problems: Of the approximately 20,000 Korean brands, only about 10 have successfully established themselves in the US market (see the Macquarie report above). These brands are primarily sold online through platforms like TikTok, Amazon, and their own websites. Because online sales are so robust, offline retailers struggle to secure limited inventory.
4. Offline retailers are primarily interested in Korean products in the "Top Buy" category, and are therefore seeking similar products.
5. "Top Sell" products have the following problems:

• The information and product quality are perceived as lacking for the price to be appealing to Gen Zers.

1. The approximately 20,000 brands other than Korean products in the "Top Buy" category have the following problems:

• Product information is unclear, including highly abstract expressions.
• Difficulties obtaining FDA certification despite receiving ISO cosmetic certification.
• Samples have been returned due to non-compliance with FDA reporting.
• Products have outdated packaging and colors. High-end products from established brands like Amorepacific and LG (e.g., Aekyung Oil, Charmzone, etc.) Currently, the primary consumers in the US are Generation Z and Generation Alpha. It's important to recognize that these young consumers have completely different purchasing patterns from the Amorepacific generation, those in their 30s to 50s.

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💄REAL K-Beauty Offline Market Entry Strategy

1. Walmart Online: Essential for reference to be exposed to consumers who is not familiar to Social Media
2. Ulta and Target: Mixoon reaches annual sales to $40M, Sungboon at $60M, and Peach at $100million (American company). Other companies like Anua, Apr (Medicube), Skin Angel, and Joseon Beauty are all valued at $300-700million. Their strategies have shifted to online sales through their own online stores (think of Xexymix and Andar) limits supply to brick and mortar shops. Our goal is to quickly develop and launch offline products in line with the generic products and trends of these companies.