South Korean cosmetics stocks, lagging behind the semiconductor-driven KOSPI rally in the first half, are poised for a re-rating in the second half of 2025 as export recovery, favorable exchange rates, and offline channel expansion in the West converge. For overseas buyers and distributors, this signals stronger price competitiveness and broader market access for K-beauty products in the US and Europe.
FX tailwinds boost export competitiveness
The won has weakened significantly against the US dollar and euro, trading at around 1,520 won per dollar (up 10-15% from 1,350 won in early H2 2024) and 1,760 won per euro (up 10% year-on-year). This depreciation directly enhances the price competitiveness of Korean cosmetics for Western consumers, making imports more attractive. Meanwhile, the yuan has strengthened over 8% against the won to the 220-won level, improving purchasing power for Chinese tourists and daigou (personal shoppers), which could revive duty-free channel sales.
Export data confirms strong H1 performance
According to the Ministry of Trade, Industry and Energy, South Korea's cosmetics exports reached a record $1.18 billion in May 2025, up 24.2% year-on-year. Cumulative exports for January-May exceeded $5.6 billion, significantly outpacing the ~$4.6 billion recorded in the same period last year. NH Investment & Securities forecasts full-year 2025 export growth of +21.0%, with China+Hong Kong declining 6.0% but other regions growing over 28.0%.
Duty-free and China inbound recovery on the horizon
NH Investment & Securities estimates 6.58 million Chinese tourists will visit Korea in 2026 (+20.0% y-y), driving the Korean duty-free market to $11.5 billion (+11.5% y-y). In Q1 2025, Amorepacific and LG Household & Health Care reported slight duty-free sales increases, while their Chinese subsidiaries turned profitable. Cosmax and Kolmar Korea saw China revenue grow 20.0% and 14.0% respectively year-on-year, indicating a low-base recovery.
Western offline expansion gains traction
In the US, K-beauty brands are entering high-margin offline channels like Ulta Beauty and Costco, with reorder volumes of 4 billion won each expected in Q2 2025 for d'Alba Global. In Europe, APR's direct sales are projected to exceed 400 billion won within a year starting Q2, following its US e-commerce success (540 billion won in 2024). Silicon2 expanded its Poland logistics warehouse by 60% in May, supporting K-beauty distribution across the UK, Netherlands, and Germany.
What buyers should watch
For importers and distributors, the key takeaway is that K-beauty brands are diversifying away from China dependency and building scalable infrastructure in Western markets. E-commerce references on Amazon US, UK, Germany, and Italy are now being leveraged for offline retail contracts and better pricing terms. Brands like APR (booster devices) and d'Alba Global (skincare) are leading this shift, with high-margin offline channels expected to improve profitability. Distributors should monitor new product launches (e.g., Booster Pro X2) and expanding B2B channels in Europe and North America.
Source: Read the original report | Published: June 11, 2026