Russian shoppers favor Korean beauty brands
According to a report released by the Korea Trade-Investment Promotion Agency (Kotra) on Tuesday, this was more than double the $18.5 million exported to Russia in 2012. The uplift was led by makeup and skin care products with a 69 percent increase in sales. They accounted for 56 percent of beauty exports last year.
Russia’s beauty market is worth $9.1 billion, accounting for 2 percent of the global beauty market. Global research firm Euromonitor projected Russia’s beauty industry will continue to grow until 2020 with annual growth rates between 1 to 3 percent. The market also depends heavily on imports and is the 8th largest cosmetics importer in the world.
Research by Kotra’s Russia office revealed that the main consumers of K-beauty products were young women aged between 25 and 34 years who were exposed to online media and e-commerce. They also tend to be in the lower income bracket.
The Hallyu (Korean pop culture) wave was a major factor that fueled curiosity in K-beauty among this demographic group.
Local brands like Missha, Tony Moly and Nature Republic soon gained popularity online through personal blogs and YouTube. Korean brands started entering the market by establishing local branches or exporting products to brick-and-mortar and online retail channels.
Meanwhile, Kotra also suggested that men’s beauty and children’s skin care are rapidly growing beauty markets in Russia. Shaving products for men grew 39 percent in the last five years to measure $700 million last year. The market for children’s skin care products is projected to expand an average 5 percent every year until 2020.
By product sector, cosmetics and facial skin care goods were most the most popular Korean beauty exports. Although European beauty products dominate the Russian market, consumers were particularly interested in K-beauty products with specific functions such as anti-aging and enhancing skin elasticity.
“Natural ingredients like seaweed extracts, ginseng and volcanic mud in Korean beauty products are a distinctive point for Russian consumers that are used to European brands,” said the report. For cosmetics as well, Korean BB cream gained popularity after it became known that the product has the dual functions of protecting the skin from sunlight while also nourishing it.
The relatively low price of Korean products is another appealing factor in Russia, as the country is still struggling with a sluggish economy.
For Korean companies that wish to enter Russia, Kotra advised that research is crucial, as the consumption pattern of Russian beauty consumers differs by region and demographic. For example, in regions closer to Korea local brands have been opening brick-and-mortar stores since 2012, but in Siberia e-commerce is more popular.
In terms of administration, local beauty exporters are obliged to obtain a Certificate of State Registration and Declaration of Conformity for every product. Words on the label and tax-related documents have to be written in Russian - a step many Korean companies find difficult.
BY SONG KYOUNG-SON [firstname.lastname@example.org]
More in Industry
From Europe with love
SK Holdings creates hydrogen investment business unit
'Netflix law' to go into effect from Dec. 10
LG Energy Solution launches, aims for ￦30 trillion sales by 2024