S.Korean beauty brands lean toward social media stars

AmorePacific Corp.'s new brand launch in February with top South Korean social media influencer Lee Sa-bae created a sensation in the domestic cosmetics market.

It marked the first time the leading beauty company has teamed up with a social media host to launch a new cosmetics brand.

The products of Two Slash Four, which the makeup artist Lee Sa-bae dubbed a co-creative beauty brand with AmorePacific Corp., sold out within the first few days of the collection's launch.

Lee, who goes by Risabae on the internet, boasts 2.3 million YouTube subscribers and 900,000 Instagram followers.

Social media stars are now reshaping the marketing landscape for retail and consumer goods markets, driven by the online platform market’s explosive growth.

According to research firm Influencer Marketing Hub, the global influencer marketing market expanded almost tenfold to $16.4 billion in 2022, versus $1.7 billion in 2016. It is expected to grow to $21.1 billion this year.

With the boom in online shopping, live commerce, or interacting with shoppers in real-time on a live video streaming platform, is emerging as a major sales channel. 

The domestic live commerce market is forecast to more than double to 8 trillion won ($6 billion) this year, compared to 3 trillion won in 2020, according to eBEST Investment & Securities.

“The rise of social media influencers is leading the growth of the live commerce market,” said eBEST Investment analyst Oh Rin-ah.

Now powerful social media hosts are being wooed by retail and consumer goods brands to begin getting involved in the companies' decision-making process, from product planning to marketing.

As an example, Shinsegae Duty Free is shifting toward foreign social media influencers and away from global fashion models and entertainment stars to attract foreign visitors, who account for more than 90% of its customers.

The move comes as duty-free shops strive to recover from the pandemic slump.

“Social media influencers have begun to exercise their influence on every stage of value creation beyond marketing into product planning and development,” Sookmyung Women’s University business school professor Seo Yong-koo.

On the economic front, they are more cost-effective than TV stars. But some powerful social media hosts are now demanding higher pay, sometimes matching that of movie and TV stars.

Some companies such as Lotte Home Shopping Inc. and LG H&H Co. choose to nurture their employees as social media hosts so that they can interact directly with customers in real-time on their online sales platforms.

LG H&A, a leading daily necessities and cosmetics brand, has been running influencer nurturing programs since 2018. Among those who have completed the course, some boast over 10,000 followers.

Write to Mi-Kyong Lee at capital@hankyung.com

Yeonhee Kim edited this article.