Several D2C brands in the beauty and food and beverage (F&B) segment are capitalisng on the consumers’ fondness with all things Korean – K-pop, K-drama, etc.
The model is simple – customise Korean products to cater to Indian skin tones and palates and offer them at an affordable price.
For instance, in October last year, SUGAR Cosmetics’ parent company, Vellvette Lifestyle entered into a joint venture with actor Kareena Kapoor Khan for its skincare brand Quench Botanics. Khan joined as a strategic investor and co-owner.
Quench Botanics offers skincare products across key categories like serums, moisturisers, cleansers, sunscreens, etc. formulated in Korean Labs and manufactured in Korea. But, it’s made for the Indian consumer and comes in the price range of `149 up to `999 per product.
“We leverage the best of Korean ingredients and technology for all skin concerns. The brand is gaining significant momentum with consumers, especially in some channels where we have seen over 500% growth over the past financial year,” Kaushik Mukherjee, director, Quench Botanics told FE. Mukherjee is also the co-founder and COO of SUGAR Cosmetics.
According to Statista, the cosmetics market in India is projected to grow by 2.86% (2024-2028), resulting in a market volume of $7.22 billion in 2028. “Skincare is one of the fastest-growing categories at the moment. It is also a sizable market, estimated at `25,000 crore annually at an all-India level. This gives us plenty of room to grow as we build Quench Botanics and make the best of Korean beauty accessible to more Indian consumers,” added Mukherjee.
According to Grand View Research data, the global K-beauty products market size was valued at $91.99 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 9.3% from 2023 to 2030.
Keeping pace with evolving trends, Nykaa has also curated a large selection of K-beauty brands on its platform. The company observed a 50% growth in the demand for Korean beauty brands last year. And, to match the demand, it launched a dedicated K-beauty store and is also marketing the same by educating consumers on the intricacies of K-beauty routines through various events.
Many leading Korean brands such as Face Shop, Laneige, InnisFree and Tony Moly have witnessed commercial success in India through beauty aggregator platforms such as Nykaa, Reliance Retail’s Tira Beauty, Purplle and marketplaces like Amazon, Flipkart, Myntra and others. Last month, Korean skincare brand Skin1004 launched its products in the Indian market exclusively on Tira Beauty.
Seeing the demand, many beauty D2C startups have launched their own range of Korean products at affordable prices. Beauty startup Pilgrim, which raised $20 million in a Series B funding round last year, sources ingredients from Jeju Island, South Korea, and incorporates them into its products. These products are offered at a price range of `450 and `700. The startup claims that its Korean skincare and haircare range contributes 50-55% of its annual revenue.
“Last month, we launched our Korean sunscreen because of the high demand we saw for K-beauty products and the response has been phenomenal. We sold over 50,000 units in the first month alone,” Anurag Kedia, co-founder, Pilgrim, told FE.
Besides skincare and beauty, startups in the food and beverage segment have also been introducing or ramping up their Korean offerings such as Bubble tea, Korean pizza, K-pop burgers, Ramen noodles and ice cream.
South Korean pizza brand GOPIZZA plans to open 50 new outlets across India to add to the existing 50 outlets by the end of 2024. The brand raised $25 million in October 2022 in Series C funding to fulfil its expansion plans in India.
Beverages startups such as Bengaluru-based Chai Point and Frozen Bottle have also launched their range of bubble tea. Cloud kitchen startups like FreshMenu and BigBites also offer Korean food across locations.
Last month, a quick-service restaurant (QSR) startup Boba Bhai, which specialises in bubble tea and other Korean food items, raised `12.5 crore in seed funding co-led by Titan Capital and Global Growth Capital UK, with participation from Arjun Vaidya, co-founder, V3 Ventures, Marsshot VC, DeVC, Warm Up Ventures, Varun Alagh, co-founder, Mamaearth, among others.
Boba Bhai offers Korean dishes that have been made keeping in mind the Indian taste buds such as Korean fried chicken burgers. The startup claims its sales have been growing rapidly at an average of 30% each month for the last six months.
“We are predicting high but achievable sales of Korean items in the next fiscal year. Our goal is to reach an annual recurring revenue (ARR) of around `100 crore within the next 12 months,” Dhruv Kohli, founder, Boba Bhai said.
Vaidya says he invested in Boba Bhai because the brand went on a Korean food trend with an Indianised format. He also believes that going ahead we will see many D2C startups cashing in on the demand. “Movies, music, food skincare, haircare, a concerted effort has been made to spread this behaviour across various aspects of life. There are people in India who are learning the language now. Genz-focused brands even use Korean terminology,” he said.
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Beyond Borders
* In October last year, SUGAR Cosmetics’ parent company Vellvette Lifestyle launched Quench Botanics, which offers skincare manufactured in Korea but suited for the Indian customer
* Nykaa saw 50% growth in the demand for Korean beauty brands last year
* Many leading Korean brands have seen commercial success in India through beauty aggregator platforms
* Several beauty D2C startups have launched their own range of Korean products at affordable prices
* Startups in the food and beverage segment have also been introducing or ramping up their Korean offerings such as Bubble tea, Korean pizza, K-pop burgers, etc.