Screenshot of K-Mall, an e-commerce platform that focuses on beauty products from South Korea
Check out the beauty section of some of the country’s largest department stores and chances are, you’ll find a variety of branded products from Korea.
Since the proliferation of Korean Dramas (K-dramas) and Korean Pop (K-Pop) in local entertainment in the early 2000s, the popularity of South Korean products in the Philippines has only grown stronger.
Korean beauty (K-Beauty), a shorthand for Korean cosmetic products, is one of the first to reap the rewards of this phenomenon. Since 2010, the value of cosmetic products exported by South Korea to the Philippines has grown by an annual average of 35 percent, according to data reported by South Korean authorities and compiled by the United Nations International Trade Statistics Database (UN Comtrade).
By 2017, South Korea’s cosmetic exports to the country totaled $26.58 million, up by 37 percent from $19.35 million in 2016.
Seoul born-and-raised Young Eun Kim first noticed the local market’s love affair with Korean-branded products when he first came in the Philippines in 2010, but it was not until last year when he finally moved to exploit the business opportunity.
“I was selling gadget accessories for seven years here in the Philippines. But last year, I opened K-Mall because K-Beauty is booming. It’s growing here in the Philippines,” Kim said in an interview with Entrepreneur Philippines during the two-day PhilBeauty event in Pasay City last week.
Young Eun Kim noticed the local market’s love affair with Korean-branded products when he first came in the Philippines in 2010. He opened K-Mall last year after selling gadget accessories for seven years
In the third quarter of 2017, Kim launched Korean Mall, or simply K-Mall, an e-commerce site that mainly sells merchandise from his homeland. The site has five main categories: beauty, food, clothing, gadgets and jewelry.
But to quickly gain footing in the local market, K-Mall mainly sold Korean-branded cosmetic products on its first three months of operations at bargain prices with the hundreds of online K-Beauty resellers in mind.
A regular customer can easily purchase K-Beauty products for as much as 60 percent off the original prices on the site. But if a user decides to become a reseller or dealer, he or she can get extra discounts and purchase products for even as much as 80 percent off the original prices.
To become a reseller, a user would have to purchase Php2,000 worth of products on the site on his or her first purchase. He or she would then have access to up to 70-percent off discount on their next order. The user would have to purchase at least Php2,000 worth of orders monthly to maintain his or her discount on the site. If not, he or she will be downgraded into regular customer prices.
The same goes for those who wish to become a dealer: a user would have to buy Php10,000 worth of products on his or her first order to access an 80-percent discount on next purchases.
K-Mall now has around 2,000 customers actively ordering monthly since it started operations
The strategy has worked for the company so far. According to Kim, K-Mall now has around 2,000 customers actively ordering monthly since it started operations, a quarter of whom are resellers and dealers. By the end of the year, he expects the site to cater to at least 10,000 customers.
“The reason we can supply the [cheap] price is because we’re collecting the dealers and the sellers so I can say we’re looking for wholesale buyers, not just casual customers even when we sell [for] both on our website,” Kim explained.
As of May, there are already around 1,500 items posted on the site, majority of which are K-Beauty goods. Still, Kim expects that number to grow, along with the food section, which is set to expand with more offerings this quarter.
Elyssa Christine Lopez is a staff writer of Entrepreneur PH. Follow her on Twitter @elyssalopz