Korean cosmetics prices are rising

South Korea's well-known affordable cosmetics brands have started to raise prices. The price of 26 cosmetic products of MISSHA has been raised by an average of 11% since this month.

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On March 14, a hashtag about #a maximum price hike of 36% of Innisfree # went viral on Chinese social media Weibo, with 150 million views as of press time.

Innisfree is a representative affordable cosmetics brand in South Korea, which has 80 SKUs in Tmall's flagship store with a price range from $1 to $110. Recently Innisfree increased its prices on more than 50 products with a rise of up to 36%.

South Korea is a major consumer and exporter of cosmetics in the world. The pandemic has already brought considerable operating pressure to South Korea’s cosmetics industry, while the rising cost of raw materials has again squeezed profits. Several high-end cosmetics brands in South Korea raised prices late last year, and this month, even some affordable cosmetics started to increase.

Innisfree is one of them. Another example is MISSHA, a well-known affordable cosmetics brand in South Korea, which has 33 SKUs in its official flagship store on Chinese e-commerce platform Tmall, with prices ranging from $7 to $41. MISSHA has increased the price of its 26 cosmetics by an average of 11% since this month.

The impact of the pandemic, the rising cost of raw materials, and the rise of domestic brands in China. These combined reasons lead to a decline in South Korean cosmetics exports to China, further squeezing the profit space of South Korean enterprises. The popularity of K-beauty is on the decline. Against this backdrop, the price hike of affordable Korean cosmetics such as Innisfree has caused discontent among Chinese consumers, most of whom said they would choose domestic cosmetics over Korean ones.

In fact, not only Korean beauty brands that are raising prices. Around the start of 2022, Global beauty brands Estée Lauder, Chanel, La Mer, Tom Ford, Unilever and other high-end beauty brands have started to raise prices as well. Whether Korean brands or international brands, price increases are the general trend. The difference is that international brands benefit from their higher brand value, so the price increase may not have a great impact on product sales. While for low-end brands, the price increase will greatly affect consumers' shopping decisions.