K-beauty and used cars drive SME exports in first half of 2025

Korea’s small- and medium-sized enterprises (SMEs) extended their export winning streak to a seventh straight quarter in the first half of the year, buoyed by rising global demand for K-beauty products and used cars.

Export-bound containers and cars are seen at Pyeongtaek Port in Gyeonggi on Aug. 1. [NEWS1]

Korea’s small- and medium-sized enterprises (SMEs) extended their export winning streak to a seventh straight quarter in the first half of the year, buoyed by rising global demand for K-beauty products and used cars.

SME exports totaled $56.7 billion from January through June, a 3 percent increase from the same period last year, according to data released on Monday by the Ministry of SMEs and Startups. The number of SME exporters hit a first-half record of 78,655.

Cosmetics and used cars lead growth

Cosmetics exports surged 19.7 percent on year to $3.94 billion, setting a new first-half record.

“Korean beauty products continue to benefit from the global popularity of K-content and the strength of online marketing,” said an SME Ministry official.

“Korea retained its position as the No. 1 cosmetics exporter to the United States and Japan, with small and mid-sized beauty firms outperforming conglomerates.”

Exports by large beauty companies declined 7.3 percent in the same period, while SME beauty exports climbed 19.7 percent.

New markets played a critical role in driving growth. Demand rose not only in established destinations like the United States and China, but also in emerging markets such as the United Arab Emirates (UAE) and Poland.

Automobile exports, meanwhile, jumped 73.7 percent to $3.92 billion, primarily led by soaring used car shipments to the Middle East and the UAE.

A shopper looks at beauty products stocked at a store in Seoul on Aug. 1. [YONHAP]

U.S. market hits record high

The United States remained Korea’s top export destination for SMEs, with first-half shipments hitting a record $9.33 billion. The SME Ministry attributed the gain in part to pre-emptive inventory stocking by U.S. buyers anticipating potential tariff hikes.

Of Korea’s top 10 SME export markets, six — including the United States, China, Japan and Hong Kong — saw year-on-year increases.

Taiwan, another strong performer, recorded $1.58 billion in SME imports from Korea. Exports of chip equipment, semiconductors, and precision chemical materials surged 82.5 percent, 25.5 percent and 173.7 percent, respectively, on the back of improving conditions in the global chip market.

Vietnam, however, saw SME imports from Korea decline for the second straight quarter, with exports of nine out of the top 10 products — such as semiconductors, plastics and synthetic resins — falling.

Visitors wait for a shop in Myeong-dong, central Seoul, to open on Aug. 1. [YONHAP]

Online sales surpass $500M

Online exports by SMEs surpassed $500 million for the first time, totaling $530 million in the first half and accounting for 77.1 percent of Korea’s total online export volume.

Cosmetics led the way again with $290 million in online sales. Notably, exports to nontraditional markets soared: Shipments to Britain surged 180 percent to $26 million, while exports to the Netherlands more than doubled to $16 million.

“Online exports offer high returns for relatively low costs, making them an attractive channel for smaller exporters,” said Lee Soon-bae, director-general for global growth policy at the Ministry of SMES and Startups.

"Since K-beauty is driving overall SME exports, we plan to discover and nurture other promising products in sectors such as fashion and food that are inspired by Hallyu [the Korean Wave]."

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff. BY KIM KYUNG-MI [kim.juyeon2@joongang.co.kr]