CTK Cosmetics provides one-stop shadow support to foreign brands entering the South Korean market
International brands are competing for tooth and nail to enter the lucrative South Korean cosmetics market. Paving the way for these foreign big names to get a foothold in is CTK Cosmetics. With expertise covering all aspects and processes of the industry, they provide behind-the-scenes support from product planning to launch.
CTK Cosmetics is a company that started out in 2001 as a cosmetics container manufacturer. From 2009 they began achieving significant growth through their “Full-Service” offering for international cosmetics makers.
CTK’s “Full-Service” is a B2B one-stop solution that can support all the processes their client companies go through: from product planning through to development, production, marketing, quality control, and delivery. In other words, it’s a “turnkey” service for the cosmetics industry. Back in 2009, their similar business model tailored to the cosmetics industry was unique, even on the global stage.
After releasing Full-Service, CTK Cosmetics steadily grew their clients over several years. These clients have now expanded to over 100 companies and are dominated by international Western cosmetics brands that include L’Oréal, Unilever, Estée Lauder, and Chanel. In 2017, the company was successfully listed on the KOSDAQ stock market.
CTK Cosmetics also refrains from owning its own factories. Instead, they’ve focused on building themselves up as a platform for linking clients and OEM businesses both inside and outside South Korea as well as markets. So what opportunity led them to offer a full service that supports the industry from behind the scenes? The answer to this lies in the harsh failures and lessons that were experienced by Co-CEO Jeong Inyong.
After launching his company, Jeong partnered with a famous makeup artist in South Korea to launch the brand VIDIVICI. VIDIVICI received an unusual amount of attention for a new brand and was sold in major department stores. It even managed to expand to Hong Kong. However, its business eventually hit a wall.
In the first half of the 2000s, when VIDIVICI began, the staff at Jeong’s company needed to individually contact OEM companies, container manufacturers, and packaging companies while at the same time performing product development and manufacturing, forcing the brand to spread their human resources thin. On top of this, there were differences in even the smallest orders from these companies, making inventory management extremely difficult. There was also a lack of information regarding OEM/ODM companies and plenty of obstacles when trying to match containers and their contents to form products.
Jeong eventually withdrew from managing VIDIVICI and shelved his attempt to start a brand business. However, this bitter episode is what led to the birth of Full-Service. Drawing on his own experience, Jeong believed that among brands that have faced similar hardships as himself, there had to be a huge demand for a service that offered a one-stop-shop for the overall process of product planning, development, and manufacturing.
The reason CTK Cosmetics doesn’t own factories also comes from past lessons. OEM makers that own factories will naturally emphasize manufacturing products that their factories produce well. However, CTK Cosmetics’ service pivots around optimally designing the containers and contents that brands want and finding suitable OEM makers for them. They’ve established themselves as a platform that’s linked to multiple businesses and that can offer a diverse range of choices for developing products that fulfil the requests and demands of clients.
Their Full-Service business currently boasts a firm foundation, however in reality it took around three years for their first order to be arranged. Although CTK Cosmetics had a track record as a container manufacturing specialist, it wasn’t easy for them to win the trust of international Western companies as a total service. However, the staff at CTK never gave up on going around to visit clients with proposals in hand. Eventually, the requests started flooding in. It turned out that major foreign businesses needed time to realize how difficult business was in South Korea — where competition is fierce and many unique e-commerce platforms exist — before they could properly understand the intentions and ideas behind CTK Cosmetics.
Then, in March 2021, they launched the cosmetics development platform “CTK Clip”. This is a digital platform for offering Full-Service online. With CTK Clip, clients can search through over 5,000 package items and raw materials that are developed and offered by CTK Cosmetics. Users can search for products by category, theme, or trend, and it also has a curation feature that recommends ingredients and packaging. Registration is free and even clients without experience can start developing cosmetics products in just a few clicks.
In recent years, there has been a rapid increase in South Korea of companies that, like CTK Cosmetics, provide a total support service for developing cosmetics as a ‘behind-the-scenes’ actor for brands. CTK Cosmetics, which perceived the market demand early and has since built up trust among major overseas brands, can be called the top runner of this field in that they’ve accumulated a considerable amount of expertise.
The development platforms that have appeared in recent years have met the demand in the South Korean domestic market that has come following the surge of influencers and new brands. However, these existing platforms will likely see more global competition from the fact that CTK Cosmetics, which has always been thorough in building relationships with global brands, has launched CTK Clip and begun approaching clients with greater potential.
Text: Ching Li Tor
Original text (Japanese): Jonggi HA
