Growth of Cosmetic OEM·ODM Companies and Industrial Roles

Abstract

In this study, we analyzed the growth factors and industrial role of cosmetics OEM⋅ODM enterprises that have played an important role in Korea’s growth as the fourth-largest cosmetics exporter in the world. Since the OEM industry was first introduced to Korea by Kolmar Korea in 1990, the industry has grown to account for 12.619 trillion won as of 2016 and 69.9% of sales of local products. Also, the industry not only supported brand enterprises to enter the global market but also directly supplied products to global enterprises, contributing to economic growth and rising national prestige. Growth factors in Korea’s cosmetics OEM⋅ODM industry can be found in the development of differentiated business models, such as continuous technology development, active response to the industrial environment, and settling a system with technology and creative ideas. For sustained growth and development of Korean cosmetics industry, OEM⋅ODM needs to be settled as Korea’s own industry and co-exist with brand enterprises in complementary relations.