Korean beauty brands are rapidly expanding into America's physical retail network, adding fresh momentum to what is already a striking growth story. The assessment comes from an industry report published on the 22nd by Kyobo Securities.
According to data from Nielsen, K-beauty sales in the United States are forecast to reach $2.8bn in FY26 (February 2025 to March 2026), a 48% increase on the prior year — surpassing even the previous year's already-impressive 45% growth rate.
The expansion into physical retail is being driven by some of America's largest chains. Target quadrupled its K-beauty SKU count earlier this year. Sephora, the beauty retailer, is preparing to launch a dedicated K-beauty zone in partnership with South Korea's Olive Young, the dominant domestic health-and-beauty chain. Costco and Walmart are also expanding their K-beauty product ranges.
Kyobo Securities identifies three reasons why this shift into physical retail is strategically significant.
First, it unlocks an entirely new customer base. Costco's core shoppers are aged 35 to 64 — largely practical, value-conscious consumers encountering K-beauty for the first time. This demographic has minimal overlap with the brands' existing Amazon customers, meaning the channel generates genuinely incremental demand rather than cannibalising online sales.
Second, physical retail converts browsers into buyers more effectively than e-commerce. Nielsen data shows that purchase penetration rates in mass-market physical channels stand at 92.4%, well ahead of Amazon's 77.1%.
Third, the addressable market is far larger. Amazon accounts for only around 20% of the US cosmetics market. Specialist beauty retailers and mass-market channels combined represent more than 40% of the market — meaning the physical retail arena that K-beauty brands are now entering is at least twice the size of the Amazon channel alone.
The broader momentum is visible in household penetration figures. K-beauty's reach among American households has risen from 13.7% in FY23 to 23% in FY25, and is projected to climb further to 28.7% in FY26. Kyobo Securities maintained its Overweight recommendation on the cosmetics sector.