As CJ Olive Young continues to lead South Korea’s beauty product distribution, convenience stores and supermarkets are re-entering the market with renewed strategies to capitalize on the growing demand for affordable beauty products. While Daiso remains a notable competitor with its budget-friendly approach, few other rivals have managed to challenge CJ Olive Young’s dominance until recently.

According to industry sources on Tuesday, 7-Eleven will open its second fashion and beauty specialty store in Seoul’s Gangdong District in October 2024 following the launch of its first beauty-focused store in Dongdaemun District less than a month ago. Like its predecessor, the new location will feature a “fashion and beauty zone” stocked with 30 percent more beauty and fashion items than typical stores. The store aims to attract local office workers with its targeted product lineup.

Other convenience store chains have also jumped into the beauty market, with CU, GS25, and Emart24 introducing a variety of budget beauty products in September. CU partnered with the cosmetics brand Angellooka to release three affordable skincare items, including sheet masks, serum, and moisturizing cream, which are priced in the 3,000-won range per product. GS25 launched an all-in-one lotion from the brand Acnes for around 9,000 won while Emart24 collaborated with the brand Plu to offer essence, exfoliators, and other skincare items priced in the 7,000-won range.

The renewed focus on beauty products by convenience stores stems from the recovery of sales, which slumped during the Covid-19 pandemic. CU, which saw a 20.5 percent drop in sales in 2021, bounced back in 2023 with a 28.3 percent increase. GS25 has experienced double-digit growth in beauty product sales for three consecutive years (2021-2023), while 7-Eleven also steadily increased its cosmetics sales, primarily through beauty accessories.

A key reason for the convenience stores’ push into the beauty sector is the demand for cosmetics in regions where CJ Olive Young stores are scarce. Olive Young operates 1,354 stores nationwide as of the second quarter of 2024, with a nearly equal distribution between metropolitan and non-metropolitan areas. However, CJ Olive Young’s presence is limited in more rural regions, and convenience stores, with over 55,000 locations across the country, are stepping in to fill the gap.

Additionally, with influencer marketing gaining traction, many young consumers, particularly those from Generation MZ, are turning to indie beauty brands rather than luxury cosmetics, further influencing convenience stores’ strategies in the beauty market.

Supermarkets are also serious about expanding their beauty offerings. Lotte Mart increased its “LOHB’s Plus” stores from the first location in Yeosu in 2021 to 18 stores as of September 2024, and sales at these stores surged by over 30 percent compared to the previous year. The health and beauty category at Lotte Mart’s Seoul Station Zeta Plex store saw a 70 percent jump in sales in the year following LOHBs Plus’ launch in September 2022.

Emart also increased sales by expanding its private-label brand No Brand, introducing five skincare products in July 2024 priced at 4,980 won each, including gel, cream, toner, lotion, and essence.

“Daiso’s success in the beauty sector has shown that there is potential for convenience stores and supermarkets to carve out a space in this market. By leveraging their nationwide store networks and large-scale locations, they could reshape the beauty retail landscape, especially targeting consumers in their teens and twenties over the long term,” an industry expert said.

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