Daiso Beauty Products Gain Traction as Testing Ground for Korean Cosmetics Amidst Industry Downturn
Seoul, South korea – Facing declining profits and a need to connect with younger consumers, major Korean beauty companies are increasingly turning to Daiso, the popular 100-yen shop chain, as a strategic distribution channel and product testing ground. The move comes as industry giants like AMOREPACIFIC,LG H&H,and Aekyung Industries grapple with sluggish domestic sales – LG H&H even reported an operating loss of 16.3 billion won in the second quarter of this year, its first deficit in two decades.
daiso offers beauty brands access to a vast offline network and valuable consumer feedback, particularly from the crucial Millennial and Gen Z demographics. According to app and retail analysis service Wise App and Retail, as of July, 29% (123,000 users) of the daiso Mall app’s user base is in their 20s, with those in their 30s comprising 24.3% (103,000 users). This younger audience is drawn to Daiso Beauty’s affordable, small-capacity products, viewing the store as a “small laboratory” to experiment with new trends.
The appeal extends beyond price. Consumers actively share their discoveries on social media, generating organic marketing for products like “Daiso’s new robe” and “Daiso beauty item recommendations.” This user-generated content drives sales without significant advertising expenditure.
“Daiso entry is a strategic choice that can lead to the expansion of young consumers and to secure long-term customers,” explained an industry official. Sungshin Women’s University beauty professor Kim Joo-deok added, “It is indeed also helpful for companies to identify trends and confirm consumer reactions.” The growing influence of Daiso is even impacting brand perception, with foreign companies and buyers increasingly using it – alongside Olive Young – as a benchmark for product quality.
