South Korea government funds K-beauty SME overseas expansion
30 Jul 2024 --- The South Korean government is doubling down on its efforts to promote its country’s position among leading markets in the cosmetics and beauty industry.
In a joint initiative, the Ministry of Small and Medium-Sized Enterprises (SMEs) and Startups and the Ministry of Food and Drug Safety announced a comprehensive plan to enhance the competitiveness of SMEs in the sector.
SMEs have been the driving force behind South Korea’s cosmetics export boom, accounting for a substantial 63% of total exports, according to government statistics.
Last year, these businesses raked in a record US$5.3 billion in overseas sales, making cosmetics their top export product.
“The performance of cosmetics exports is thanks to a solid cosmetic ecosystem harmonized between corporations and SMEs,” says South Korea Minister of SMEs and Startups, Oh Youngju.
“We will do our best to help our SME cosmetics brands to gain world premium status that global environmental changes cannot shake.”
Funding overseas expansion
To address the challenges faced by SMEs in penetrating foreign markets, the South Korean government has outlined a three-pronged strategy: fostering public-private partnerships, streamlining export regulations and strengthening the domestic beauty ecosystem.
A key component of the plan is the K-Beauty Creator Challenge, a collaborative effort with industry giants like CJ Olive Young, Amazon, Cosmax and Komar.
This initiative aims to identify and nurture promising beauty exporters by providing them with mentorship, marketing support and access to distribution networks.
To further support the industry, Cosmax and Kolmar will jointly establish a “global K-beauty fund” to invest in companies expanding their overseas operations.
The Korean government will also extend a new “K-beauty network loan,” offering financial support to companies even in the early stages of securing orders.
Additionally, the government will make efforts to simplify export regulations, widen support for data on such regulations in newly emerging markets, harmonize domestic manufacturing standards with international norms and provide financial support to SMEs.
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