— Overview
This account applies Porter’s five forces to the Korean cosmetics industry, and finds that rivalry among existing firms matters most for returns. The Fair Trade Commission publishes three-firm concentration figures; those shares are not invented here. Polarization leaves both suppliers and buyers with strong bargaining power. On the supply side, raw materials and OEM production often rest on exclusive or friendly agreements.
On the sales side, door-to-door networks, agencies, and brand shops stand opposite department stores, marts, drugstores, and home shopping, and large retailers have begun launching private-brand cosmetics. About 1,000 manufacturers and 3,000 manufacturer-sellers are left as the account’s undated figures, not as current official counts. Edible cosmetics appear as a substitute, but the writer judges the threat not very large.
— Contents and key concepts
Rivalry first, then the two sides of bargaining
This is a five-forces look at Korean cosmetics, not a diamond-model account of national advantage. The finding that organizes the rest is simple: rivalry among existing firms matters most for the returns a company can expect. The Fair Trade Commission publishes three-firm concentration figures for the industry. Those official shares are not restated or updated here.
Polarization, the account says, leaves both suppliers and buyers with strong bargaining power. On the supply side, raw materials and OEM production often rest on exclusive or friendly agreements, so a brand is not always free to walk away. On the sales side, older channels — door-to-door networks, agencies, and brand shops — stand opposite department stores, marts, drugstores, and home shopping. Large retailers have begun launching private-brand cosmetics of their own. Channels that smaller firms could once use, the account says, are shrinking.
A thousand manufacturers, and a substitute that is not very large
The industry, as this account counts it, has about 1,000 manufacturers and 3,000 manufacturer-sellers. Those numbers are left as the account’s undated figures, and are not taken up as later official counts. Among the firms named are Amorepacific and LG Household & Health Care on the brand side, Kolmar and Cosmax among OEM producers, and Missha and The Face Shop among the brand-shop names.
Edible cosmetics appear as a substitute. The writer judges the threat they pose not very large. New entrants, the account says, need either a clear difference or a price advantage if they are to hold a place. What is not invented here is a later market share, a later concentration ratio, or a later official headcount of manufacturers. The picture that remains is of an industry in which existing rivals set the terms, suppliers and large buyers both push hard, and smaller channels grow narrower.
Sources
- an application of Porter’s five forces to the Korean cosmetics industry, treating rivalry among existing firms as most important for returns, and discussing supplier and buyer bargaining, OEM agreements, private-brand cosmetics, undated counts of manufacturers, and edible cosmetics as a substitute whose threat the writer judges not very large.
Last updated: 14 November 2026
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