In Exclusives, Insight, Retail

The Korean retail landscape is fast moving, highly competitive, and constantly evolving. The beauty market is among the top ten in the world and worth an estimated $13 billion.

Korean beauty consumers are some of the most sophisticated and well-educated in the world, making it a test market for entry into Asia or China market launches. Per capita beauty spend in South Korea in 2017 was $45, according to Mintel, compared to $43 in the UK and $37 in the US, and more than double the global average of $21. With a projected CAGR of 8.1 percent over the next five years, the market is estimated to reach $2.8 billion by 2020.

However, success in this market requires a respect for cultural norms and consumer preferences. Global players will run up against the power of Korean conglomerates like LG Household & Health Care, the leading cosmetics company in Korea in terms of market capitalization, and rival Amorepacific, Korea’s biggest beauty company, by sales.

It is easy to be overwhelmed by the sheer magnitude of beauty products, retail stores, spas, and cosmetic clinics in Seoul. On a recent trip with Korean trade organization Kotra, I managed to get a first-hand look at the beauty retail landscape in the South Korean capital.


The retail market is saturated with domestic players owned primarily by conglomerates, such as Lotte, Hyundai, Shinsegae, GS, CJ, and E-land, all of which own multiple retail channels. Historically the Korean beauty retail landscape was composed of mono-brand stores, multi-brand stores that traditionally have had a mass-market positioning, and department stores. While this formula is still firmly intact, there has been an evolution of the formats that caters to the evolving consumer looking to shop both well-established and emerging brands.


If you are on a business trip with limited time to shop the market, there are two general areas to visit that will provide a good idea of the Korean retail beauty landscape.

Myeong-dong Shopping District: This area of Seoul is like the Times Square for K-beauty. The streets are flooded with domestic mono-brand and multi-brand retail outlets. Myeong-dong is also home to the absolutely massive Shinsagae and Lotte Department Store, each with their respective duty-free shopping halls.

Garosu-gil Shopping District: Garosu-gil is a shopping street that is located in Sinsa-Dong in the Gangnam-gu district of Seoul. This area is like Myeong-dong but with less shops, and a bit more civilized. The tree-lined streets bustle with cafés, small fashion boutiques, and plenty of multi-brand and mono-brand beauty stores. This area is often where you’ll find branded concept shops and high-beauty flagship stores. Don’t forget the side streets when exploring this area.


The local Korean market has been driven by branded stores from major cosmetics companies like LG Households & Healthcare and AmorePacific, often referred to as “road shops.” All major Korean brands blanket the city with these small-format branded retail locations. In recent years this category has also seen the emergence of large-format flagship locations offering immersive experiences. Mid-tier beauty brands like Innisfree, Nature Republic, Etude House, Holika Holika, Its Skin, Tonymoly, The Face Shop, and Skin Food proliferate this channel while a few high-end brands such as Laneige and Espoir are also represented. In areas like Myeoung-dong, brands will have multiple locations a stone’s throw from each other. Recently, international luxury players like LVMH have thrown their hats in the branded store retail ring in the market.


Health and beauty stores or H&B emerged in the late ’90s and resemble Western drugstores; however the channel is evolving to be a combination of drugstore and specialty. The channel was valued at 1.7 trillion won ($1.5 billion) as of 2017, marking 30 percent growth year-over-year from 2016. In 2009 it was worth just above 150 billion won. With the exception of Aritaum, you can expect to find merchandise assortments across domestic, Asian, and international brands from mass to prestige. It’s worth noting that Sephora announced they will open their first location in the market in October 2019 located at Parnas Mall in the posh Gangnam district.

Olive Young: Founded in 1999, CJ Group Olive Young is a popular chain of beauty pharmacies carrying Asian and Western products but focusing on domestic  brands. The channel leader with over 1,000 locations, Olive Young is a great place to find the best drugstore indie brands in Korea.

LOHBs: Founded in 2013 the Lotte-owned retailer LOHB (which stands for LOve, Health, and Beauty) has approximately 96 stand-alone and shop-in-shop locations across Korea. With fewer locations than Olive Young and a more prestige offering, their motto, “True beauty stems from healthy beauty,” informs the merchandise assortment of niche, favorite cult brands and wellness items.

Lalavla (previously Watsons): GS Retail introduced Watsons, the largest drugstore and multi-beauty and personal care store brand in Asia, to the Korean market in a 50:50 joint venture with Hong Kong-based A.S. Watson Group in 2005. Last year GS Retail made Watsons Korea a fully owned entity and embarked on a rebranding initiative to Lalavla across the 188 stores to appeal to older millennials. Compared to Olive Young and LOHBs, the retailer has a bigger selection of body and hair products as well as well-known brands like Dr.Jart+.

Boots: The Walgreens Boots Alliance-owned chain opened in the market in 2017 under a franchise with Emart Company, a member of South Korea’s top hypermarket retailer the Shinsegae Group. The rollout is planned to open Boots-branded stores in shopping malls, on high streets, and within the outbound areas of Shinsegae Department Stores and E-Mart hypermarkets.

Aritaum: A multi-brand retail experience of the Amorepacific beauty brand portfolio under one roof in over 1,300 stores in Korea and over 70 stores in North America. The goal of the retail experience is to provide the best innovation, trends, and experience by offering differentiated services and benefits through its membership program. Amorepacific has also developed unique products for Aritaum MODI Nail and MONO EYES. By analyzing foot traffic, movements of customers, and their shopping behavior, the business intends to develop specialized products customized to the needs of consumers.

ChicorThis beauty store chain owned by Korean retail conglomerate Shinsegae Group was launched in 2016 as South Korea’s version of Sephora, with 20 stores across the country with expansion to Shinsegae duty-free shops.


The first department store opened on the Korean peninsula in 1930. In 2018, the department store market in South Korea was projected to be worth approximately 30 trillion South Korean won (approximately $25 billion). The three leading retailers, Lotte, Shinsegae, and Hyundai, represent roughly 80% of the department store market, with the balance of the channel being made up of smaller players like Galleria and AK Plaza. Department stores in Korea are still a very important and thriving distribution point for beauty. They are the bastions of luxury Korean beauty with brands like Sulwhasoo, Hera, O Hui, SU:M37°, and The History of Whoo all being represented at their respective counters and, of course, the usual suspects of multinational brands are also present in the mix.

Lotte: Established in 1979 with 44 locations with the flagship stores located in Young Plaza Myeong-dong and Avenuel Main Store in Jung-gu.

Shinsegae: In 1930, Shinsegae opened, the first department store of Korea. The retailer currently has a 12-store footprint with its flagship store in Centum City, Busan being the world’s largest department store at 3,163,000 square feet.

Hyundai: The first location was opened in Ulsan in 1977. Today there are 16 locations  with the flagship store being Apgujeong in Gangnam-gu.


According to a GlobalData report, with 22% of sales, South Korea is the world’s largest duty-free market, which reached a sales high of US$11.7 billion in 2017. By 2022, South Korea is forecasted to account for nearly a quarter of all duty-free spending at 24.1% of the global market. The past two years have seen sales growth of 23.1% annually in the sector.

The top duty-free shops in Seoul:

Shilla Duty Free Main Store, 249, Dongho-ro, Jung-gu, Seoul

Lotte Duty Free Main Store, 9-12F, 30, Eulji-ro, Jung-gu, Seoul

Shinsegae Duty Free Myeong-dong Branch, 8-12F, 77, Toegye-ro, Jung-gu, Seoul


Photo: via Urbantainer 

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