In 2024, South Korea reportedly overtook France as the biggest exporter of cosmetics to the US, capturing 22.2% of the market share.
Among K-beauty products sold in the US, sunscreens are said to be the most popular. A report released by Samsung Securities in January indicated that South Korea-made sun care products are projected to grow by 43% in e-commerce sales in the market.
Following the impose of 25% reciprocal tariffs on South Korea, consumers in the US are panic buying K-beauty products before higher prices hit, according to American media.
In particular, The Washington Post published a list of products seeing increased demand in the country, citing data from social media and online communities such as Reddit.
South Korean sunscreens ranked high on this list, as users deemed them as “beauty products worth buying now”, with some stating that they have already stocked up on their favourite items.
Unlike Europe and Asia where sunscreens are generally categorised as cosmetics, the US FDA regulates them as over-the-counter (OTC) drugs. This restricts the inclusion of skin care ingredients and limits the UV filters that sunscreens made in the US can use.
As a result, Korean sunscreens are perceived by local consumers as superior in providing a wider range of benefits, such as blocking UV rays, lightweight texture, and ability to layer well with makeup.
“The US tariffs will undoubtedly have an impact on Korean beauty brands both inside and out of the US, but just how big that impact would be remains to be seen.
“There are likely to be several consequences. In addition to making products more expensive — as any additional costs involved in the importation process are expected to be passed onto the US consumer — consumer confidence may also be affected in the short term due to the uncertainty over how imports will be dealt with at the borders.
“The greatest impact will likely be felt by consumers buying K-beauty products from abroad via global e-commerce channels, and we may see sales decline after an initial panic rush to stockpile purchases,” Lauren Lee, founder of K-beauty retailer StyleStory and skin care brand Jelly Ko, told CosmeticsDesign-Asia.
Lee added that Korean imports have a slight advantage over French ones despite the higher tariffs (25% versus 20%), as K-beauty products are lower priced in the first place.
“I think, ultimately, Korean cosmetics will maintain its competitive edge in the US market because it is already competitively priced to begin with. Even with a 25% increase in price, the American consumer is still getting a better deal than beauty products from many other countries.”
Cosmetics giants weigh options
Korean beauty brands that are already active in the US, have local warehouses, and are partnering retailers to serve American consumers, would remove some of the uncertainty and have an advantage over brands looking to enter the market, said Lee.
“There are ways that brands might attempt to minimise their exposure to tariffs, such as moving some of their manufacturing on-shore to the US — though whether this would bring down the prices of products is indefinite, as manufacturing costs in the US are higher than in Korea.”
According to Korean news reports, ODM majors Kolmar Korea and Cosmax are slated to ramp up production at their US factories by at least two times.
Additionally, cosmetics giants LG Household and Health Care (LG H&H) and Amorepacific, which do not have manufacturing plants in the US, have said that they are monitoring the situation before deciding whether to raise prices for their US-bound products, and that they are considering plans to build production facilities there.
“By establishing a local presence in the US and setting up domestic warehousing, it may reduce [supply] disruptions and also price hikes because brands could sell to a local affiliated subsidiary.”
At the same time, Lee believes that some brands will “undoubtedly” seek to change direction and opportunities in alternative markets.
“We’ve seen this happen before, such as when China imposed economic punishments on Korean products. At the time, many brands pivoted to western markets like the US.
“Currently, China, Japan, Hong Kong, Vietnam, Russia and Taiwan are top importers of K-beauty products, so these countries would be a natural fit for brands looking to avoid being subject to tariffs in the US.”