South Korea is investing KWR40bn (US$27m) to support beauty businesses and start-ups as US President Donald Trump’s new tariffs continue to rock global economies.
The country’s Ministry of SMEs and Startups marked the official establishment of the K-Beauty Fund during a conference on 9 April, after originally announcing it in July 2024.
The initiative aims to strengthen the global standing of Korean cosmetics, which reportedly represents the leading export item among SMEs from the country.
It will also prioritise investments in K-beauty brands and beauty technology start-ups across the entire cosmetics value chain.
It is the county’s first beauty-focused venture fund created through a public-private partnership.
This includes financial backing from cosmetics manufacturer COSMAX, cosmetic ODM company Kolmar Korea and South Korea’s Government.
Youngju Oh (Pictured), a Minister for the Ministry of SMEs and Startups, said: “Korean cosmetics boast world-class manufacturing and production capabilities.
“With leading manufacturers like COSMAX and Kolmar Korea participating directly in the fund, we expect the K-Beauty Fund to foster open innovation between manufacturers and beauty SMEs and start-ups.”
Beauty exports reached $6.8bn in 2024, making cosmetics the first single export item for SMEs to exceed $6bn, according to the Ministry of SMEs and Startups.
“Through the K-Beauty Fund, we will invest across the entire beauty value chain, including client companies, marketing and distribution partners, and raw material suppliers,” said Choi Hyun-kyu, CEO of Kolmar Korea.
“As a global leader in ODM, we aim to help Korea reach the top in global cosmetics exports through strategic collaboration with our clients and partners.”
It follows Trump’s sweeping tariff hike, which has resulted in an escalating trade war among countries hit hardest by the newly imposed taxes.
South Korea has been slapped with 25% reciprocal tariffs, with other Asian countries such as Japan (24%) and China (145%) having been handed similarly high levies.
Despite Trump announcing a 90-day pause on the tariffs, uncertainty remains high among countries and global businesses.
A special session on K-Beauty Export Guidance was added during the conference amid concerns around the tariffs and to address customs issues and response measures.
“SMEs are increasingly concerned about the recent US tariff measures,” said Oh.
The Minister added that despite these “challenging circumstances”, South Korea will “actively implement policies that reflect on-site needs”.
Oh continued: “[This includes] expanding public-private partnership programmes, introducing K-Beauty loans to support production, hosting international trade fairs, and increasing support for K-Beauty’s entry into duty-free markets.
“All in parallel with the formation of the K-Beauty Fund to boost the global market reach of K-Beauty SMEs and start-ups.
“As cosmetics continue to be the top export item for our SMEs and exports to the US grow, we will closely monitor developments on the ground and respond proactively to challenges such as the US tariff measures.”
(Photo Credit: Ministry of SMEs and Startups)