How K-beauty brands like Farmacy, Cosrx, or Klairs succeeded without having any manufacturing facility of their own.
If you are a big K-beauty fan, you probably heard of the brands above. But more likely, you never heard of Kolmar Korea, Cosmax, or Cosmecca Korea.
Did you know that the K-beauty brands such as Cosrx, Klair’s, or even Missha actually do not manufacture any products?
I like to address this manufacturing and sales of Korean cosmetics as this may give us quite different points of view on how we select “reliable” Korean beauty products.
# Get to know who’s “Seller” and who’s “Manufacturer”
In Korea, beauty products are handled under the law of ‘COSMETICS ACT (Link to Korean national law information center)’ and you can find the definition of manufacturer and manufacturer-seller, on Chapter II — Article 3:
Simply put, the manufacturer (제조업자) is the factory who produces the product, while the manufacturer-seller(제조판매업자)is the beauty brand who purchases the product from the factories and sells them to customers.
According to the Korean Ministry of Food and Drug Safety, there are more than 2,000 manufacturers in Korea and about 18,000 manufacturer-sellers(brands) in 2020.
I always have this perspective that cosmetics manufacturers should get more attention from customers as the manufacturers are the ones who actually control the producing process and make high-performance beauty items. Even many Korean customers are confused by the term ‘manufacturer-seller’ as it sounds like they actually produce the products, but actually not.
A good thing about Korean Cosmetics Act is that the manufacturer-seller has to inform customers who the actual manufacturer is by putting its name on the product package. So when you purchase K-beauty products you easily can check who the actual manufacturer is. Also, this information has to be available on the brand website as well, so if you like to know who’s the manufacturer of what, you can visit the brand’s website and check it.
e.g.) Innisfree No Sebum Powder: Manufacturer is Kolmar Korea 한국콜마(주)
# How Manufacturer & Manufacturer-Seller(brand) Co-work
There are many ways brands and factories work together. Some brands hire their own chemist and develop their own formula. Then, they pass on the formulation (or “product prescription” as they call it) to manufacturers. The manufacturers simply follow the prescription. This is called OEM (Original Equipment Manufacturing) in Korea.
However, most of the manufacturers manage new product developments including ingredients, formula, scent, shades, texture, et cetera. In this case, brands just need to label their brands on the products and distribute with massive marketing. We call this manufacturer’s business ODM (Original Development Manufacturing).
※ In ODM business, brands also participate in the item development in order to modify shades/texture/etc. to meet brands’ own concept and target.
This is pretty much similar to the business collaboration between Seed Beauty and KYLIE Cosmetics: Seed Beauty is in charge of item production and Kylie sells it under the brand name KYLIE Cosmetics. As you may notice, this ODM business model is broadly accepted by western beauty brands as well.
You can find many large-sized cosmetics manufacturers in Korea by simply googling ‘Cosmetics ODM in Korea’. It shows Kolmar Korea, Cosmax, and Cosmecca first as they are the top 3 cosmetics manufacturers.
Other than those big ODMs, there are quite many good ODMs as well in Korea.
I will post ODM company introduction later on. Always feel free to let me know if you like to know any manufacturers of your favorite K-beauty products, then I will check it and post the introduction of them.Hope you enjoy this article, thank you!