Exports of Korean products, which have been on the downswing since the exports of US$1.982 trillion won in 2014, are expected to surpass US$1 trillion within three years due to the upswing in exports of Korean cosmetics and consumer goods.
Kim Do-heon, Secretary of the Ministry of Trade, Industry and Energy, gave a speech titled “Recent Export Trends and Policy Direction” at the 2017 6th IBKS Consumer Day held by the IBK Securities. Co., LTD. (IBKS) on November 28. He noted that in 2017, Korea’s export growth rate was 18.5 percent with a 10-month consecutive double-digit increase in exports, ranking first among the top-10 exporting countries, and it is expected to exceed US$ 1 trillion in three years since it hit US$ 988.2 billion in 2014.
In particular, cosmetics and pharmaceuticals have more than doubled from a decade ago. In the case of cosmetics, exports have grown more than five-fold over the past five years. While the exports to the G2 (USA and China) decreased from 39.3% in 2015 to 36.0% in October 2017 for two consecutive years, a steady increase in exports to emerging markets such as ASEAN, Latin America, the Middle East, and India contributed to the general increase in Korean exports.
As Hallyu dramas have become very popular in the ASEAN markets, the craze for K-Beauty and the products used in the Korean hit dramas such as Cheon Song-Yi lipstick (My Love from Another Star) and Song Hye-Kyo LANEIGE BB Cushion has led even to interest in Korean style make-up, further making beauty-related YouTubers and bloggers more popular than ever before sharing information and videos about Korean make-up tutorials, reviews on Korean cosmetics, Korean celebrities with their make-ups, and media images to local Internet users.
Korea’s cosmetics exports to ASEAN countries continued to show double-digit growth, especially in 2016, with explosive growth of 31.6%. In the ASEAN cosmetics markets, the adoption of the ASEAN Harmonized Cosmetic Regulatory Scheme (AHCRS) in 2008 unified the different regulatory systems that used to act as non-tariff barriers. As Korea’s ASEAN Free Trade Agreement (AKFTA) has been signed, Korea’s duty-free products have become more competitive than its French and U.S. counterparts. Korea’s exports of cosmetics to the ASEAN region will likely continue to increase.
Korea is the tenth biggest pharmaceuticals exporting country to the ASEAN region with a market share of 3.2%. As of 2016, ASEAN countries’ imports of Korea’s pharmaceuticals amounted to $ 340 million, an annual average growth rate of 5.5%.
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