How Korean startup Craver hopes to become the 'HYBE of the beauty industry'

Life & Style

Published: 15 Apr. 2024, 17:12 Updated: 15 Apr. 2024, 17:17

How Korean startup Craver hopes to become the 'HYBE of the beauty industry'

Park Hyun-seok, co-founder and vice president of Craver [CRAVER]

The desires to look like your favorite K-pop idol and know what cosmetics they use are evidently the reason TikTok tutorials on copying the dewy makeup of IVE’s Jang Won-young or sultry Blackpink-inspired looks continue to trend.

A heightened interest in Korean beauty looks naturally trickles down to the purchasing of more Korean cosmetics. According to data from the Korea International Trade Association, exports of Korean cosmetics products to the United States alone recorded 132.9 billion won ($100.87 million) last October, a 46.4 percent year-over-year increase. Japan now imports cosmetics from Korea the most, according to the Cosmetics Importers Association of Japan.

Seoul's hotels offer K-beauty packages for spring

But when cosmetics brands like Beauty of Joseon, ma:nyo and Skin1004 blow up on social media or become bestsellers on Amazon, locals become confused as to how such companies, which are lesser known in Korea, became such a hit overseas.

The answer can be found in Craver, an aggregator startup — a single company that manages a network of brands or vendors, such as entertainment conglomerate HYBE — specializing in beauty products and consumer goods.

Skin1004's Madagascar Centella Ampoule, one of the brand's bestselling products [CRAVER]

Under the Craver umbrella are business-to-business beauty e-commerce platform UMMA and cosmetic brands including Skin1004, Idenel and thim. All of these brands target an international audience.

UMMA particularly plays a significant role as the middleman in spreading Korean makeup and skin care products to be easily accessible to other regions of the world, such as the United States, China, Colombia, Luxembourg, Ghana and even the Maldives.

But the worldwide desire to imitate IU's or Kim Chae-won’s makeup isn’t the only factor driving Korean cosmetics' demand overseas. Quality and affordable prices have also helped Korea secure what is arguably the top spot in the global cosmetics industry, Park Hyun-seok, co-founder and vice president of Craver, told the Korea JoongAng Daily in an interview last month.

The scale of UMMA supports his claim, as it is designed like an online catalog for more than 13,000 products from at least 140 brands. It has more than 18,700 buyers from 190 regions that are willing to purchase wholesale. While it seems similar to Olive Young or Sephora at first glance, its wholesale prices aren’t disclosed to the general public and are for buyers only.

Buyers, in this case, can refer to beauty retailers or even social media influencers who host collective buying: gathering followers to purchase a product en masse for lower prices per person. UMMA has also broken stereotypes that global shipping is supposed to take weeks — the brand assures clients that products will be shipped out within 48 hours of purchase.

“There are lots of B2B services out there, but UMMA is the only one that has an automated platform, allowing business with our customers to be more systemized,” Park added. The name UMMA, which comes from the Korean word for mother, is a nod to the fact that many women first learn about cosmetics from their own mothers.

The website for UMMA [CRAVER]

Park was inspired to co-launch Craver in 2014, alongside current CEO Lee So-hyung, from his own experience working in marketing at a plastic surgery clinic. He had learned that a lot of overseas customers had no idea how to purchase Korean cosmetics for a good price and import them to their home countries.

Operating UMMA has helped Park understand trends in the Korean beauty industry. So what exactly is the quality that makes Korean cosmetics great?

It’s the texture, Park has learned. A product's appeal is heavily dependent on how easily it can be applied and absorbed into the skin. Skincare certainly isn't one-size-fits-all; there's no one texture that works best for everyone. Nevertheless, “Korean beauty products boast textures of better quality,” Park said.

Texture also factors into the popularity of Korean skin care products over makeup products such as eye shadows, foundations and lipsticks. Craver sees high demand for sunscreen, especially in humid regions like East Asian countries and India. Moisturizers like ampoules and facial creams are also popular in the United States.

Makeup is an area where Park sees more room for growth among Korean brands, particularly when it comes to inclusivity of different skin tones. Products like foundations, lipsticks and eye shadows often require a wide range of shades in order to see universal success around the world. Until Korean brands can better accommodate that diversity, Park feels, “there's a limit to how globally successful Korean color cosmetics can get.”

Beauty road shops in Myeong-dong, Jung District, central Seoul on Aug. 20, 2023 [NEWS1]

What hasn't been as difficult, however, was leveling up the general quality of Korean cosmetics over the years. The history of the Korean beauty industry can largely be divided into three “generations”: In the 2000s, cosmetics conglomerates LG Household & Health Care and Amorepacific greatly rivaled each other; in the 2010s, road shops (cosmetics stores mostly found in areas with a large floating population, near subway exits or universities) like Missha, Nature Republic and Tony Moly roamed the streets; and now in the 2020s, indie cosmetics brands that operate mainly online have been flooding in. Craver’s Skin1004 is one example of an indie beauty brand that does most of its business in the Americas and Southeast Asia.

It used to be easier for conglomerates to secure the capital and technology behind doing business in the beauty industry, Park points out, but over the years such success has become more easily attainable to smaller businesses. Korean cosmetics manufacturers have seen sales rise as their quality rises; Kolmar Korea and Cosmax both reported on-year profit increases of 53 percent and 84 percent, respectively, from the first to third quarters of last year.

Indie brands also deftly utilize online marketing strategies these days where the department stores and road shops of the past relied heavily on television advertisements.

Skin1004 launched its first flagship store in Myeong-dong, Jung District, central Seoul, late last year. [CRAVER]

Park mentions that Craver's ultimate goal is to become the beauty industry’s version of HYBE. He emphasizes the same thing HYBE Founder and Chairman Bang Si-hyuk has repeated on multiple occasions: dropping the K.

Park teased that a business-to-consumer version of UMMA is on its way soon, possibly in early May, which will also target an international audience. “We want K-beauty to reach a certain point in which the K doesn’t matter anymore,” he said. “It naturally becomes part of the global beauty industry.”

BY SHIN MIN-HEE [shin.minhee@joongang.co.kr]