Convenience Stores Challenge the Cosmetics Market with Affordable Options

Convenience stores are entering the affordable cosmetics market, traditionally dominated by Daiso. This move is driven by the growing trend of cost-effectiveness among the Jalpa generation (Gen Z + Alpha generation), who are the primary users of convenience stores.

CU has launched a range of affordable, small-capacity cosmetics, including a foundation makeup priced at 3,000 won. These products are developed in partnership with lifestyle cosmetic brand Angel Luca and are available exclusively at CU convenience stores.

The demand for basic cosmetics in convenience stores has seen significant growth, with a double-digit increase in sales every year. According to CU, the sales growth rate of cosmetics has been 24% in 2022, 28.3% in 2023, and 14.7% between January and September this year.

A CU official stated, “In the past, sales of cleansing tissues and lip care products were mainly driven by urgent demand for make-up purchases at convenience stores when there was no time or when travelling.” However, recently, there has been an increase in demand for high potency skin care products, with mask packs, skin/lotion, cleansing products, lip care, and deodorant being the top-selling categories.

The Jalpa generation accounts for over 70% of CU’s cosmetics sales, with teenagers making up 42.3% and people in their 20s making up 32.3%. This demographic is driving the trend of buying beauty products at convenience stores.

GS25 has also expanded its line of affordable, small-volume basic cosmetics, collaborating with skincare brands Dewytree and Mediheal. Their products include mask packs priced at 700 won, toner and cream priced at 5,000 won, and serum priced at 7,000 won.

The entry of convenience stores into the affordable cosmetics market is seen as a strategy to compete with Daiso, which sells all cosmetics for less than 5,000 won. Daiso has seen significant growth in sales of base and color make-up, with major cosmetics companies such as Amore Pacific and LG Household & Health Care expanding their presence in Daiso.

In response, convenience stores are strengthening their affordable and small-volume beauty categories. Jo Bae-yeon, product planner (MD) of BGF Retail’s daily necessities team, stated, “We intend to continuously introduce affordable beauty products through collaboration with small and medium-sized partners who mainly sell online at reasonable prices.”