GS25 to challenge Daiso in low-cost cosmetics market

South Korean convenience store chain GS25 said on Sunday it would expand the lineup of affordable and small-pack basic cosmetic products, targeting Generation Z and Generation Alpha consumers in their teens and 20s.

GS25 has recently unveiled low-unit packs of skincare products in collaboration with skincare brands Dewytree and Mediheal to challenges the country’s top dollar store chain Daiso.

Dewytree face masks available only at GS25 sell for 700 won ($0.51) apiece. Toners and creams under the brand are sold at 5,000 won each, with its serums priced at 7,000 won.

A pack of Mediheal's moisture pads and trouble pads are priced at 1,000 won, respectively. Each of the pack is filled with two sheets. 

They were repackaged into smaller batches for sale on GS25 to lure young customers who tend to buy basic skincare products at convenience stores.

This year, basic skincare products made up 69.5% of GS25's total cosmetics sales, up 15 percentage points from 2019.

Previously, lip balms had been the most-selling cosmetic item at domestic convenience stores. Now, face masks, skin toners and lotions are leading their cosmetics sales growth.

Over the past three years, those aged 10 to 20 had accounted for more than 50% of cosmetics buyers at GS25.

With the launch of small-pack skincare products, GS25 is now posing a challenge to Daiso that has been dealing with cosmetics since 2021.

Daiso has kept the prices of all its cosmetic products below 5,000 won and expanded its lineup to over 310 items. Its cosmetics sales in the first half of this year surged by 233%, compared to the previous year.

Next month, GS25 will introduce all-in-one skincare products for men in their 20s and 30s.

"We aim to become a major cosmetics shopping channel for Gen Z and Alpha consumers by making the most use of our accessibility," a GS25 official said. “We'll increase collaboration with professional brands and further expand our product lineup.”

Write to Hyun-jin Ra at raraland@hankyung.com