Many people are focusing on semiconductors, so I don't know how many people are interested in the cosmetics sector. I've been watching this sector for about six months, but I've only really started paying attention to it in the last month or so.
Looking at the export and import trends of the Ministry of Trade, Industry and Energy, the recent export flow of cosmetics is really good. It's difficult to directly compare the industry scale with semiconductors, but considering the high export growth rate, it seems like it could be called the second semiconductor.
July 2026 Cosmetics Export and Import Status
While Asia, including China, ignited the flame of K-beauty in the past, recently export regions have been rapidly expanding to the United States, Europe, and Central and South America. In particular, as of the preliminary figures for July this year, exports to the United States increased by 34.9% compared to the same period last year, the EU by 58.3%, and Central and South America by 120.3%.
The product range is also expanding from basic and functional cosmetics centered on sun care to color makeup, lip care, hair, and body products. I think this is an important change that goes beyond the stage where only a few products like sunscreen were of interest, and now various product lines are simultaneously expanding to various countries.
More importantly, industry insiders agree that K-beauty has risen to a position competing with France, the synonym for cosmetics, in the US import cosmetics market. While K-beauty's growth in the US was previously led by online channels like Amazon, there were many opinions that it was just a trend among some teenagers riding on the wave of Hallyu. However, recently, more and more cases are emerging where online-verified brands are expanding offline to retailers such as Ulta, Sephora, Costco, and Walmart. Since the US cosmetics market has a much larger offline sales share than online, if offline expansion leads to consumer base expansion and sales growth, it could be another growth opportunity for K-beauty.
First Half of 2026 US Cosmetics Trade Balance
However, despite these results and export sentiment, the leading stock price trend has been a bit disappointing in recent weeks. Even though sales performance outlook is positive, some leading stocks have seen valuations rise too sharply in the short term. While it appears to be profit-taking and building a safe floor since late August, stock prices reflect performance in advance, so there's a possibility that expectations for the first half of 2027 are already reflected to some extent. On the other hand, if expansion into export countries and distribution channels continues beyond the second half of 2027, this adjustment could be seen as a breathing period before further growth rather than the end of the rally. Confirmation of this will require monitoring offline sales growth in the US and Europe, as well as companies' operating rates and profitability.
If you are looking for a mid-to-long-term growth sector outside of semiconductors, cosmetics is a field worth watching. However, rather than chasing stocks that have already risen significantly, it may be better to examine the differences in corporate value chains and approach with small amounts divided according to your individual risk tolerance. Also, since the sector itself is not very large, keep in mind that it can react greatly even to small rumors.
