The center of gravity in the K-beauty industry is rapidly shifting to manufacturers. As demand for K-beauty expands, particularly in the U.S. and Europe, and social-media-driven indie brands grow explosively, the ability to plan and produce products quickly has become a key competitive factor. Consequently, domestic cosmetics ODM (Original Design Manufacturer) companies are evolving from simple production bases into core infrastructure for the global beauty industry.
With the integration of artificial intelligence (AI) technology, the K-beauty ODM sector is transforming from a pure manufacturing industry into a data- and technology-driven platform industry. The use of AI is expanding across product planning, formulation development, and production processes, broadening the role of ODM companies beyond manufacturing to encompass brand planning and market response strategies.
According to the Financial Supervisory Service's electronic disclosure system on May 14, major domestic ODM companies posted record-high results for the first quarter of this year. Cosmax recorded consolidated sales of KRW 682 billion and operating profit of KRW 53 billion in Q1, setting a new quarterly sales record. In addition to stable growth in its Korean operations, its U.S. and Chinese subsidiaries also showed simultaneous growth.
Korea Kolmar also achieved record results with sales of KRW 782 billion and operating profit of KRW 78.9 billion. Expansion in sun care and skincare orders, along with increased exports to indie brands, drove performance.
Smaller ODM companies also showed notable growth. NFC recorded Q1 sales of KRW 22.2 billion and operating profit of KRW 4 billion, up 196.3% and 286.2% year-on-year, respectively, with an operating margin of 18.1%. Strong sales of its key products on global distribution channels such as Amazon drove the expansion.
Cosmeca Korea also posted Q1 sales of KRW 185.1 billion and operating profit of KRW 21.9 billion, growing 56.4% and 78%, respectively. Net profit reached KRW 19.6 billion, up 112.8%.
The strong performance of ODM companies signifies more than a simple industry recovery. In the past, the K-beauty industry's results were heavily dependent on China's consumption recovery, but the market structure is now being reorganized around the U.S., Europe, and Southeast Asia.
Indeed, the structure of Korean cosmetics exports is changing rapidly. The share of Greater China, which stood at 62% in 2021, has fallen to around 26% this year, while the U.S. share has expanded to about 18%. In Q1 this year, export growth to the U.S. was 39.9% and to Europe 76.2%, while Greater China saw negative growth.
The expansion of the U.S. market is considered a key driver of ODM industry growth. APR's Q1 overseas sales reached KRW 528.1 billion, up 179.9% year-on-year, with about 42% of total sales coming from the U.S. Dalba Global is also maintaining growth centered on North America and Europe, and Amorepacific's Americas sales surpassed Greater China sales for the first time last year.
At the center of market changes are indie brands. Companies like Gudai Global (operating 'Joseon Beauty'), APR (Medicube), and Dalba Global are directly targeting global consumers through viral marketing on TikTok, Instagram, and YouTube. They have a structure that allows them to check market reactions in real time and quickly launch new products, backed by domestic ODM companies' rapid formulation development and production response capabilities.
As a result, the competitiveness of the ODM industry is shifting from simple production capacity to 'formulation technology' and 'speed.' Unlike OEM, ODM involves manufacturers directly developing and owning formulations and recipes. Since consumer reactions vary greatly depending on differences in formulation, texture, and color, hit products make it difficult for brand companies to easily switch manufacturers. This is why industry evaluations indicate that ODM companies' bargaining power has increased.
AI is accelerating this competitive landscape. Product planning, color development, and production processes, which previously relied on the experience and intuition of research personnel, are now being converted to data-driven approaches. In particular, the fast product launch cycle unique to K-beauty is accelerating the adoption of AI. According to industry sources, the average new product launch cycle for K-beauty in the global market has shortened to about three months.
Korea Kolmar is pursuing a company-wide AI transformation, integrating AI technology from production processes to R&D. It is the only cosmetics company participating as a lead organization in the Ministry of Trade, Industry and Energy's 'AI Factory Alliance' project. The strategy is to connect all processes—from production planning to manufacturing, quality control, and packaging—on a data-driven basis to improve production efficiency and accuracy.
In particular, the AI-based product planning platform introduced by its affiliate Loud Labs is cited as a symbolic example of industry change. When a brand company inputs keywords, the AI automatically proposes a plan including product concept, color, formulation, and container type. The company explains that the product planning time, which previously took one to three months, has been reduced to about 30 seconds.
Cosmax has introduced AI into the color-matching process, a core step in color cosmetics manufacturing. By applying a 'Smart Color-Matching AI System' that automatically sets the initial input amount of color raw materials, the number of repeated color-matching attempts has been significantly reduced. The time required to translate abstract customer requests, such as 'soft and deep brown,' into actual product colors has also been shortened.
Cosmax has also built a customized automatic manufacturing system combining AI and robotic arms. It currently operates a multi-product, small-volume production system capable of combining 3,500 types of essences, over 10,000 hair products, and 333 liquid lip colors. At its Pyeongtaek Plant 2, robots have been applied to half of the total production lines, increasing productivity by 40% compared to before.
Cosmeca Korea is also accelerating the construction of AI- and IoT-based smart factories. Through real-time production data analysis, it is reducing defect rates and production times, and has developed its own AI model to suggest product recipes. The company explains that AI adoption is going beyond simple automation to increase the speed of responding to market changes.
ODM competition is also expanding into the materials sector. NFC is responding to increased demand for high-functional ingredients such as natural ceramides and lactic acid bacteria PDRN. In particular, its fermentation technology-based lactic acid bacteria PDRN material is attracting market attention for its skin-friendly properties. The company plans to launch global brand products incorporating this material in the second half of this year.
Global capital is also paying attention to the K-beauty manufacturing ecosystem. Recently, private equity funds have been expanding their investment scope beyond individual brands to the entire value chain, including ODM, packaging, and container manufacturing. Following Ascend Equity Partners' acquisition of C&C International, container manufacturer Samhwa was sold to global private equity firm KKR.
Industry evaluations suggest that K-beauty is evolving from a simple trend industry into an industrial ecosystem combining manufacturing, materials, packaging, and distribution. If entry into global offline channels such as ULTA Beauty and Sephora expands further, large-scale production demand for initial orders and safety stock is likely to concentrate on ODM companies.
An industry insider said, "In the past, ODM competitiveness was about production cost and delivery time, but now it has changed to a structure that requires product planning speed, formulation technology, and global supply stability all at once. With AI entering product planning and production processes, ODM companies are evolving from simple manufacturers into roles that design the flow of the K-beauty market itself."
Source: Read the original report | Published: May 14, 2026