K-beauty boom drives headcount surge at top cosmetics ODM firms

As K-beauty continues to boom in global markets, South Korea's leading cosmetics original development manufacturing firms are rapidly expanding their workforces. Kolmar Korea and Cosmax — the two dominant players in the sector — have added more than 1,000 employees between them since 2022, as surging demand drives investment in both production capacity and research and development.

An analysis of the two companies' semiannual reports over the past five years shows their combined headcount stood at 3,201 as of the end of June this year — up 1,048, or 48.7 percent, from 2,153 at the end of June 2022.

Both companies have added staff every year since 2022. Their combined workforce grew from 2,153 in 2022 to 2,338 in 2023, 2,699 in 2024 and 2,923 last year, before surpassing 3,000 for the first time this year. Compared with 2022, Kolmar Korea added 551 employees and Cosmax added 497.

Kolmar Korea's growth stands out in particular. Its headcount reached 1,515 in the first half of this year, a gain of 551 from 2022 and a 57.2 percent increase. The company's workforce has climbed steadily from 964 in 2022 to 1,073 in 2023, 1,181 in 2024 and 1,357 last year.

Cosmax's first-half headcount reached 1,686, up 497 from 1,189 in 2022 — a 41.8 percent increase. Its workforce has also grown each year, rising to 1,265 in 2023, 1,518 in 2024 and 1,566 last year.

Notably, the growth has been concentrated in permanent positions. The number of open-ended contract workers — those without a fixed employment term — rose by a combined 970 at the two companies compared with 2022, accounting for 92.6 percent of the total increase of 1,048. Fixed-term employees grew by 78 over the same period, indicating that the workforce expansion has been driven primarily by long-term hiring rather than temporary staffing.

The pace of job creation has outpaced even SK hynix, which has been riding the AI semiconductor boom. SK hynix's headcount grew 18.2 percent, from 30,595 at the end of June 2022 to 36,150 at the end of June this year. Over the same period, Kolmar Korea and Cosmax posted growth rates of 57.2 percent and 41.8 percent, respectively. While the two ODM firms remain far smaller in absolute terms, their rate of hiring over the past four years has significantly outpaced that of SK hynix.

The global rise of K-beauty is broadening the role of ODM companies. Independent brands — which outsource product development and manufacturing entirely rather than maintaining their own facilities — are growing rapidly both at home and abroad, diversifying not only the volume of orders but also the range of products ODM firms must develop. That shift is raising the importance of staff beyond the factory floor, including those working in product development and quality control.

Production capacity at both companies has expanded sharply. Kolmar Korea's domestic cosmetics output capacity grew 69.6 percent, from about 373.02 million units in 2022 to about 632.47 million units last year. Cosmax saw a 65.3 percent increase over the same period, from about 617.34 million units to about 1.02 billion units.

R&D spending has also increased. The ability to develop formulations and functions that meet client specifications is considered the core competitive advantage in the cosmetics ODM business. Kolmar Korea's R&D expenditure in the first half of this year reached 81.3 billion won ($58.9 million), up 13.4 percent from 71.7 billion won in the same period last year. Cosmax's combined R&D spending — covering its domestic headquarters and overseas subsidiaries — rose 40.6 percent to 81.8 billion won in the first half of this year, from 58.1 billion won a year earlier.

The expansion in production capacity and R&D is translating into greater demand for workers. "There are still not many areas in the ODM sector where AI can be applied, so human labor remains essential," an industry official said. "As both R&D and production capacity continue to expand, the structure naturally supports further headcount growth."

If K-beauty's growth trajectory holds, ODM firms are likely to keep hiring. "As K-beauty grows, major ODM companies are expanding production capacity, adding new factory lines and building new facilities," the official said. "If the growth continues, employment will likely increase further as well."