Korea’s cosmetics market was valued at KRW 8.14 trillion in 2014, and its average annual growth in the last five years was 10.5% . Despite a prolonged economic slowdown and the resulting downturn in domestic consumption, the global cosmetics industry has been steadily growing, on the back of a wider range of cosmetics users and the aging population. Korea’s cosmetics production totalled KRW 8.97 trillion, up 12.52% from the previous year. Exports rose sharply 40% to a total of USD 1.8 billion, while imports rose 7.8% to USD 1.05 billion. Korean cosmetics exports have surged, exceeding imports for the first time since 2012, amid Hallyu (the Korean wave), the craze for Korean popular entertainment which had started to spread throughout Asia including China and South East Asia. However, cosmetics imports from Europe and the US still, far exceed the exports from Korea to those countries with developed cosmetics markets. Most Korean cosmetics companies remain heavily reliant on the domestic demand for their business. They are still lagging behind global cosmetics companies in terms of R&D investment and technology.

In recent years, Korean consumers' attention has been shifting from the brand itself to the functionality of cosmetic products. Such a change is leading to the diversification of cosmetics distribution channels and their respective growth. Growth in brand shops or health and beauty shops is considerably higher than that in premium brands sold in department stores. In the meantime, online shopping malls, including mobile shopping, and home shopping TV channels are also steadily growing. Additionally, more and more consumers are buying parallel imported products and purchasing, goods directly from overseas online shopping sites or through purchasing agencies. Given the excellent internet and mobile infrastructure, the online shopping business will continue to grow in Korea.

It is also noted that consumers are calling for the safety management of cosmetics products, with their increased purchasing power and easier accessibility to the information on the products through various media channels. Thus, in addition to securing the quality of cosmetics products, it has become crucial to obtain product safety by controlling harmful substance. As it is often the case that new cosmetic products have various functional effects as a result of innovative scientific research and development in the cosmetics sector, the companies need to label and advertise their products through media outlets, so as to provide consumers with the accurate information on new products and their innovative functions. However, those companies seeking to actively advertise such products are often subject to criticism for the excessive advertisement that could mislead consumers, thereby likely to be penalized under the cosmetics claims control regime in place. This has significantly limited the scope of information and features that the cosmetics companies may introduce and claim for their developed products.

The Korean government is pursuing the goal of the country becoming one of the world's seven largest producers and exporters of cosmetics by 2020. It announced a target to achieve KRW 15 trillion in cosmetics production and to earn USD 6 billion from cosmetics exports. It also aims to increase the share of cosmetics to more than 40% of total exports and to place 10 domestic cosmetics firms on the top 100 global companies list. The government plans to establish a cosmetics safety management system by 2020 . In order for the Korean government to achieve these goals, it needs to establish an advanced safety management system, to which Korean consumers are entitled, and to improve regulations in a manner to boost the cosmetics sector.