K-beauty’s evolution: Cosmetics showed highest export growth for Korean SMEs in past 10 years
The report said that the cumulative value of cosmetics exported by small and medium-sized enterprises (SMEs) increased by 1,278% from U$320m to U$4.39bn between October 2010 to October 2021.
In the last 10 years, cosmetics exports climbed 60 places to be the second-largest SME export in 2021, surpassing other major exports including processed food, vehicles, semiconductor manufacturing equipment and pharmaceuticals.
The Minister of SMEs and Startups said cosmetics soared on the back of “the global attention of Hallyu and K-beauty”.
Overall, SME export surpassed pre-pandemic levels to reach U$105.2bn, setting an all-time high record since 2018.
“The fact that we have seen a record high in the number of exports means that Korean SMEs have sufficiently shown their globalisation capabilities. The MSS will continue to listen to the opinions of exporting SMEs to incorporate them into export policies, and continue to maintain this momentum,” said Minister of SMEs and Startups (MSS) Kwon Chil-seung.
The ministry attributed the stellar performance of the exports to the recovery of the global economy from the COVID-19 pandemic.
China topped the list of biggest as the biggest importer, followed by the US, Vietnam, Japan, Hong Kong in that order.
In June, CosmeticsDesign-Asia reported that Korea’s cosmetics trade surplus exceeded U$6bn for the first time in 2020, advancing its position on the global stage as the third-largest cosmetics exporter behind only France and the US.
According to data released by the Ministry of Food and Drug Safety (MFDS), the country’s combined exports of cosmetics products increased 16.1% to KRW8.28tn (U$7.28bn) in 2020.
In terms of export volume, cosmetics outperformed home appliances, smartphones, and pharmaceuticals, accounting for 14.3% of the country’s combined $44.86 billion trade surplus.
These figures placed the country ahead of other leading cosmetic exporters such as Germany, Japan, Italy and China.
Boosting SMEs amid COVID-19
On December 3, the MSS announced that its KRW19tn (U$16.1bn) budget for 2022 had been approved by the National Assembly. This was an increase of 13.1% from the previous year.
This budget would help the ministry and SMEs respond to the uncertain business environment brought about by the COVID-19 pandemic.
For instance, it would help support the recovery of small businesses, create jobs, and help SMEs enhance digital capabilities to keep them completive.
Additionally, it would help compensate for the loss of small business owners caused by the government's direct quarantine measures. The compensation budget has been increased by KRW400bn (U$339m).
The ministry will also establish a pre-emptive management improvement program that would diagnoses problems and provide funds for management improvement to small business owners.
In July, Korea Trade-Investment Promotion Agency (KOTRA) expanded its logistics support services and created an emergency budget to help SMEs that were under pressure from the COVID-19 logistic bottlenecks.