Cosmepolitan thrives as a global OEM platform
In Korea, several platforms match companies and individuals who want to make cosmetics with OEM (Original Equipment Manufacturing) companies. Cosmepolitan, founded in Singapore by a Korean entrepreneur, is one of the most multilingual and global among them.
OEM companies supporting advanced Korean brands
South Korea’s cosmetics market is somewhat unique: With a population of 51.78 million (as of 2020), there are more than 30,000 cosmetics brands. Unlike France and the U.S., where cosmetics manufacturing has a long history, it was only in the 2000s that cosmetics manufacturing itself took off, with new brands popping up one after another.
Korean OEM manufacturers have been supporting these emerging brands. From the beginning, they have been able to produce cosmetics in small lots and have supported startups from various aspects by collaborating with container and design companies in a way that is closer to ODM (Original Design Manufacturing) than OEM. The success story of April Skin, which was started by a group of students with about US$2,500, and gained worldwide acclaim, is well known in the region.
The existence of these OEM/ODM companies has allowed startups to focus on marketing and has sparked the K-Beauty boom that we see today, including 3CE, the original brand of Korean company NANDA, which was acquired by L’Oreal in 2018, and Dr. Jart+, now a part of Estee Lauder.
In South Korea, most of the emerging brands have their sights set on overseas expansion, especially China, from the very beginning, as rapid growth cannot be expected only in the limited domestic market. For this reason, OEMs are also well versed in the laws and regulations of each country and will work closely with brands to help them decide on formulations to suit the countries in which they want to sell their products.
In addition, the OEMs have strong horizontal ties with each other, and not only do they want to grow their own business, but they also want to focus on strategies to increase the presence of K-Beauty itself in the world. This has created a virtuous cycle in which manufacturing contracts from global companies are concentrated in Korea.
Two of the largest OEM companies are COSMAX and Kolmar. In addition, there are over 4,000 small and medium-sized OEM companies,, each taking advantage of their specialties. Orders are received domestically and globally, so the South Korean cosmetics exports in 2020 will be the third-largest in the world after France and the United States. The number of export partner countries has increased from 137 in 2019 to 160 today.
OEM platform pioneer Cosmepolitan
Even before the pandemic, several OEM platforms had emerged in South Korea, where DTC brands, influencer brands, and brands from other industries can consult on where, what, and how to produce cosmetics in South Korea.
Cosmepolitan was one of the first to launch a one-stop platform for connecting with OEMs in January 2019, and it is available in multiple languages including English, Chinese, Korean, and Japanese. Headquartered in Singapore, the company has an office in Seoul, Korea, and receives projects from all over the world.
The company has established a network of over 3,000 OEM factories (132 of which are cGMP certified and 143 are ISO22716 certified / cosmetic GMP factories) in Korea, China, Japan, and North America, ranging from large to medium-sized companies. The platform also has an understanding of each manufacturer’s characteristics and strengths, along with formulation data of more than 80,000 of the cosmetics produced in Korea. Cosmepolitan provides consulting services on what to consider and how to manufacture the cosmetics that brands want to produce to achieve the quality and price they seek.
At the time of its establishment, the company was aiming to create a platform and system a client can complete the project entirely online but as it responded to a large number of projects and clients from all over the world, it was clear that many client companies required flexible and careful supports. As Cosmepolitan is accumulating data on global demands the company plans to improve the accuracy of matching partners by visualizing available lines in factories in real-time in the future.
“What we are aiming for is a platform that supports the growth of emerging beauty brands around the world, helping them produce cosmetics by commercializing their product concept and vision at high quality and a low price. We get a lot of requests to make cosmetics in Korea. Still, we can also be flexible in terms of quality and cost, for example, formulating in Korea, packaging in China, and producing the finished product in Japan,” said Yoon Mijoung, founder and CEO of the company.
Mijoung, who had a career in Samsung Electronics, started a translation company after studying in Japan. After working on many projects related to cosmetics, she entered the marketing business of K-Beauty.
She realized the need for an OEM platform and started her own business. “The creation of cosmetics requires the control of multiple partners, including formulation, packaging, labeling, and shipping, based on the laws and regulations of each country. Due to the complexity of the process, many individual coordinators in Korea are experts in production and production management and act as mediators between companies. We would like to centralize and accumulate data on this system and respond to a wider variety of requests with our partner OEM companies,” said Mijoung.
According to Yoon Subok, a director of the company who hails from Rakuten Bank, the number of inquiries from individual influencers has been increasing, and he says, “We are thinking of a system to reduce the initial investment on the part of brands by covering the cost of manufacturing the initial lot and collecting it from sales so that they can create cosmetics without worrying about their cash reserves.”
Mijoung said, “It is easy for innovative cosmetics to be created in Korea in terms of formulation, packaging, and marketing methods because the people are highly sensitive to cosmetics and check them with a strict eye. Global brands are also increasingly selling their products in Korea first and conducting test marketing. As we have a thorough understanding of the Korean market, we are able to provide our clients and individuals with predictions and tips on what will become the next trend.”
Text: Ching Li Tor
Original text (Japanese): Kikuko Yano
