Emart and Lotte Mart Embark on '5,000 Won Cosmetics War'... Intensifying Strategies Against Daiso
Major retailers are once again catching the eyes of consumers with 'cost-effective cosmetics'. As Daiso's influence expands, Emart and Lotte Mart are partnering with beauty brands and launching bold pricing and differentiation strategies to capture market leadership.
Emart Pushes Aggressively with 12 Brands... Reinforcing 'Under 5,000 Won' Strategy This Year
In 2025, Emart collaborated with cosmetic manufacturers to launch 12 exclusive brands, aggressively pursuing this segment. The initiative began in April with the launch of 'Glow:Up by Beyond' in collaboration with LG Household & Health Care. Following this, 'Herbade' (Fine Global Lab), 'One Thing' (Aekyung Industrial), 'R:PDRN' (Nowcos), and 'Dahan Light' (Cosmo Cos) are also being launched.
The latest addition is 'Dermation', a collaboration with first-generation road shop brand Tony Moly. This product notably includes high-performance ingredients like glutathione and exosome cica.
"We've packed high performance into a price that does not exceed 5,000 won... aiming to offer consumers an experience beyond just 'Daiso's stage'."
The focus on basic skincare products is strategic, encouraging repeat purchases. This setup, aimed particularly at foreign tourists' tastes, resembles Daiso but Emart secures competitiveness by emphasizing 'exclusive products for stores'.
Lotte Mart Joins with 4,950 Won Functional Skincare
Lotte Mart is also embracing this trend, partnering with specialized beauty brands like Jayjun and Dermafirm to launch functional basic skincare products priced at 4,950 won. This strategy, combining quality and pricing, provides consumers with an attractive option.
Lotte Mart maximizes the advantages of exclusive distribution by engaging in joint planning with brands rather than simple entry. This poses a great opportunity for ODM (Original Design Manufacturer) beauty companies lacking strong distribution networks. These companies, equipped with product capabilities but facing distribution challenges, find a breakthrough through collaborations with major retailers.
"The advantage of exclusive sales across hundreds of large distribution channels breaks down the significant barriers in launching new brands."
Lotte Mart's participation not only expands the cost-effectiveness competition but also indicates a shift in the strategic focus of major retailers towards non-food sectors.
Daiso's Intense Popularity... The Duality of K-Beauty Mecca
The top shopping destination for K-Beauty among foreign tourists in Korea is Daiso. Particularly, as Daiso strengthens its reasonable lineup based on small-capacity products and gains support from the MZ generation, achieving annual sales of 4 trillion won appears feasible.
In cosmetics, Daiso shows its strengths in effectiveness and packaging efficiency, creating an exceptionally practical offline retail strategy.
"Reducing package sizes while enhancing efficacy is imprinted on tourists as the ultimate cost-effective product."
This upward trend directly leads to tension among major retailers. With large retailers already feeling the pinch from e-commerce competition, Daiso emerges as a new threat. Emart’s non-food sales share, for instance, decreased from 35% in 2023 to 33% in 2024, reflecting this challenge.
The 'Under the Surface Alliance'... Why Cosmetic Brands Choose Retailers
For beauty companies, partnering with major retailers holds significance beyond simply adding sales channels. The revenue structure heavily reliant on Daiso is considered a risk within the industry, leading to a consistent struggle in entry competition and low margins.
The industry has keenly felt the necessity for new distribution channels, prompting major retailers to open their doors. The approach of collaboratively planning brands, selling them exclusively in stores, and granting discretion in promotions brings substantial sales growth to beauty brands.
"For beauty firms, the era of solely relying on Daiso is over… It is now essential to develop our brands and broaden distribution choices."
Particularly in the ODM sector, brands collaborating with major retailers receive favorable responses, accelerating further cooperation. This reflects a long-term strategy for brand enhancement as well as distribution diversification.
Competition Beyond Price... Focus on Exclusivity and Trust
Although it might seem the face-off against Daiso relies solely on pricing, the reality is different. The differentiation strategy of marts involves exclusive brands available only through their networks, focusing on repeat purchases, and products appealing to both existing customers and foreign tourists.
This setup also benefits consumers. The 5,000 won cosmetics attractively displayed in the spotlight extend 'opt-in shelf' choices within marts beyond mere price competition. Moreover, it adds symbolic value of defining marts as a 'New K-Beauty Channel'.
"Meeting K-Beauty brands in marts and trying them right away signifies a new consumer experience."
The brand lineup established by Emart and Lotte Mart hints at a potential recovery of the beauty market's share, previously dominated by online and road shops, back into offline distribution.
Power Shift in Distribution... The Shift Started with 'Daiso Deterrence'
Daiso is not just a store; it serves as a 'K-Beauty hub'. However, this hub faces constraints in time and space, with complex entry conditions and fee barriers. In this structure, major retailers presented themselves as challengers.
Instead of merely selling similar products at comparable prices, the plan is to operate in the capacity of official entrants utilizing retail networks and stores. This can be interpreted as a signal of shifting centers of distribution power.
"Marts are evolving from a simple sales channel to a pivotal part of K-Beauty distribution."
This transformation is not solely consumer-centric. When manufacturers, brands, and distributors contemplate survival together, the existing system must inevitably reshape. Emart and Lotte Mart stand at the beginning of this transition.
Closing Remarks
The competition among major retailers for cosmetics priced under 5,000 won against Daiso reveals a turning point in the entire distribution structure rather than just a price war. This trend, involving intertwined interests of manufacturers and distributors, is likely to continue.
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