Despite South Korea's economic downturn and news that cosmetic stores are facing a crisis, the lipstick effect is raising the cosmetic sales. The term describes the phenomenon where people buy small-ticket luxury items during the recession to forget their tight budget that surges cosmetic sales.
According to Retail News Asia, one of South Korea's major health and beauty retailers Olive Young had a 35 percent increase in color cosmetic sales in 2018. It was the first time its product range topped its best-selling category list, despite the country's economic struggle. Its health functional food products grew by 32 percent while hair products increased by 22 percent.
The lipstick effect is often used as an economic indicator, especially when it comes to the cosmetics industry. Estée Lauder chairman Leonard Lauder introduced the term when he saw the jump in lipstick sales after the terrorist attacks in September 2001. The same thing happened after the global financial crisis in 2007-2008, per Pulse News.
Korea experienced a miserable job market, reduction in corporate investment, and weak consumer spending. Although there are reports the cosmetic sales' future looks bright this year as South Korea's economy may wallow at 2018 levels, the government cut back its estimate for 2019. From the earlier prediction of 2.8-3.0 percent, the economy may perform more or less at last year's 2.7 percent forecast.
Meanwhile, helping the cosmetic sales rise is the new trend involving young consumers. The beauty market is now targeting pre-schoolers, and the craze is now growing.
Shushu & Sassy is a known beauty brand that targets young consumers. It first started selling cosmetic products for kids and has now expanded as a beauty spa to meet the clients' growing demand.
The store's vice-manager Han Ah-reum told the Straits Times Shushu & Sassy's customers to vary from ages 36-months to 13-years-old. However, most of their clients are 4 to 7-years-old.
A 5-year-old customer's mother said it was a little surprising to see a spa-for-kids' concept. Although this thing never existed in the older generation's time, it is now a big trend among kids.
Aside from beauty spas, there are also kids' cafes and hotels that venture in the beauty business for children. "Sales of cosmetics for young kids had increased drastically since April 2018, when companies rolled out new products for the upcoming Children's Day," 11 Street manager Lee Kyo-taek said. He also added the sales for cosmetic products for kids surged by 340 percent in 2018. Unlike in the past when kids only played with plastic cosmetic sets, their toys have evolved and contained real makeup that is safe for children.
