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Olive Young now controls more than 20% of Korea's domestic beauty retail market. In 2025, the company generated KRW 5.8 trillion in revenue and became the first beauty retailer in Korea to surpass a 20% share of the country's beauty retail market.

Those are extraordinary numbers in a market that remains highly fragmented.

What makes the story even more interesting is that Harvard Business School selected Olive Young as the subject of a business case study. It was only the second Korean beauty company to receive that treatment after Amorepacific almost twenty years earlier.

In today's episode we will explore why Olive Young became so successful, what it built differently and how its rise helped reshape the Korean beauty industry.

Olive Young's success in Korea stems from a combination of strategic positioning, strong organisational capabilities and favourable market conditions.

The company was founded after CJ Chairman Lee Jae-hyun recognised an unmet need for a dedicated health and beauty retail channel tailored to Korean consumers.

Rather than competing in prestige beauty, the newly founded Olive Young focused on the mass beauty market: affordable, accessible products that consumers could easily discover, test and buy.

That positioning helped Olive Young become more than a cosmetics store; rather, it became a platform for discovering and nurturing emerging K-Beauty brands.

The company's success has also been supported by Korea's world-class OEM and ODM manufacturing ecosystem, the global rise of Hallyu and, more recently, inbound tourism.

As Olive Young became a must-visit destination for overseas visitors, cumulative purchases by foreign tourists exceeded KRW 1 trillion between January and November 2025, with foreign visitors accounting for approximately 28% of offline sales during the year.

One thing that often gets overlooked is that Olive Young wasn't successful simply because it was the first health and beauty retailer in Korea.

The concept itself wasn't revolutionary.

The real innovation came in building a retail model that actually worked for Korean consumers.

That sounds obvious today, but the Korean beauty retail landscape looked very different in the late 1990s and early 2000s.

Consumers generally bought cosmetics from department stores, pharmacies or directly from brand-owned stores. Missha, Etude House, Innisfree, Nature Republic, The Face Shop, Skin Food and TonyMoly all built their own retail networks.

What didn't really exist was a retailer bringing a wide variety of brands together under one roof.

That gap is what Olive Young identified.

They created a discovery-led shopping environment where customers could browse freely, test products and explore new brands without the pressure of a traditional sales counter.

Previous competitor in the Korean market, LOHBs:

Olive Young's retail distribution strategy has been central to its success.

Unlike traditional department stores, Olive Young created an accessible platform for emerging Korean beauty brands, giving smaller companies a route to market that had previously been difficult to achieve.

As the business evolved, the company expanded this platform internationally through channels such as the Global Mall, helping partner brands reach overseas consumers while creating another growth engine for both Olive Young and its suppliers.

This is one of the reasons Olive Young is so influential today. It is not just a place where brands sell products. For many K-Beauty brands, it is a place where they are discovered, validated and scaled.

One of the biggest reasons Olive Young has built such a dominant position is its merchandising organisation.

In many retail businesses, the merchandising or buying team decides which products make it onto shelves. They negotiate pricing, forecast demand, manage inventory and decide which products stay and which are discontinued.

At Olive Young, the MD organisation functions as far more than a buying department.

The company carries approximately 20,000 SKUs, with MD teams organised by product category. Rather than simply selecting products proposed by brands, MDs analyse consumer demand, identify emerging trends and work closely with suppliers to develop products and brand portfolios that meet evolving customer needs.

That capability has allowed Olive Young to identify trends, shape product development and support brands both domestically and internationally.

Most large retailers eventually reach a point where their bargaining power becomes enormous.

If you control access to millions of customers, you can demand better pricing, longer payment terms, exclusive products, marketing contributions and shelf fees.

Lee Jae-hyun's view was different.

He repeatedly argued that a retailer cannot achieve sustainable long-term success by forcing suppliers to absorb losses. During a visit to Olive Young, he reportedly told employees that as the market leader they had a responsibility to build a healthy beauty ecosystem.

He also said the foundation of retail is mutual growth, and that a company that forces its suppliers to lose money can never truly succeed.

Whether every supplier would agree that Olive Young perfectly lives up to that philosophy is probably a discussion for another day.

One of the most important parts of Olive Young's success is that it did not try to compete in prestige beauty.

Instead, it focused on the mass beauty market.

Mass beauty does not simply mean cheap. It refers to products that are accessible in both price and availability. Products ordinary consumers can afford. Products they can easily buy. Products that don't require an appointment at a department store beauty counter.

That positioning turned out to be incredibly powerful.

Olive Young built an assortment that mixed affordable everyday essentials with exciting new discoveries. It became somewhere you could replenish your cleanser, pick up shampoo, browse new lip tints and discover a skincare brand you'd never heard of, all in the same visit.

Rather than relying on established beauty companies, Olive Young actively backed emerging brands.

Today, that is almost taken for granted. But many of the brands that dominate Korean beauty today were not always household names.

Brands like Rom&nd and Torriden experienced enormous growth after building strong relationships with Olive Young.

Approximately four out of every five brands stocked by Olive Young are Korean SMEs, which is remarkable.

That is a very different business model, and it helps explain why Olive Young's influence over the Korean beauty industry is so significant.

Olive Young's rise is not just a story about Korean skincare becoming popular.

The real story is about retail strategy, merchandising, supplier relationships, consumer behaviour and the creation of a beauty ecosystem that helped both the retailer and independent Korean beauty brands grow together.

In Part 1 of this deep dive, we explored the foundations of that success: the domestic market, the store concept, the merchandising organisation and the decision to build the mass beauty market rather than chase prestige.

In Part 2, we’ll be looking at the more complicated side of the business: the in-store, online and omnichannel strategies, the scandals, Olive Young’s international growth plans and the challenges it may face as it expands into new markets.

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