Models pose for Amorepacific's Mimo by Mamonde cosmetic lineup, which the company released exclusively for Daiso stores in September. Courtesy of Amorepacific

Korea's major beauty product companies are flocking to Daiso stores, a leading retail franchise offering a wide range of affordable everyday household items.

The influx comes after Daiso's skyrocketing sales established the company as a top player in Korea's retail industry in recent years. Amid rising market prices this year, Daiso's signature low prices have become a key factor in its popularity. K-beauty firms are now betting on this popularity to establish their products among Daiso's visitors.

While most beauty products on Daiso shelves are produced by small and medium-sized enterprises (SMEs), LG H&H, the health care and beauty arm of LG Group, launched a product in September that quickly became a hit. The product, a "spot calming gel" for troubled skin, was created exclusively for Daiso stores.

The 10-milliliter gel, priced at 5,000 won ($3.57), created a buzz in the market. Due to its popularity, Daiso limited purchases to three per customer. Even with this restriction, the product repeatedly sold out, with over 100,000 units sold in just three months.

LG H&H previously joined the Daiso suppliers' group in July by introducing a cosmetic lineup exclusively for Daiso stores. An LG H&H official said that its products "satisfied those who wanted effective cosmetic items for reasonable prices."

Around the same time LG H&H's gel hit Daiso shelves, beauty company Amorepacific also made its debut in Daiso stores. The cosmetic giant launched Mimo, a second brand under its high-end cosmetic brand Mamonde, with a lineup of eight different products including a skin toner, an ampoule and a moisturizing cream. Targeting teenagers and those in their 20s — Daiso's major consumer age groups — each item was less than 5,000 won.

Aekyung Industrial in November launched 28 different makeup items under Twoedit, a sub-brand of its makeup-dedicated brand Luna. The company released the items for 2,000 won to 5,000 won each.

The large-sized companies' rush to Daiso comes after cosmetic item purchases at Daiso added a significant volume of sales. From January to October this year, the sales of base makeup products jumped by 240 percent from the previous year, while makeup products rose by 130 percent during the same period.

The number of cosmetic brands available on Daiso's shelves has steadily increased. Starting with just four in 2021, the selection expanded after Nature Republic launched a Daiso-exclusive brand in 2022. Today, a total of 53 cosmetic brands are available at Daiso.

Daiso's potential as a successful cosmetic product outlet was first proven by VT Cosmetics in 2023. The SME's ampoule products sold at 3,000 won made headlines in September that year, quickly selling out. It skyrocketed the company's sales.

In the third quarter of this year, VT Cosmetics reported sales of 240 billion won, more than double the 117 billion won recorded in the same period last year. Building on this success, the company expanded its Daiso lineup to include skin care essences and mask pack products.

"Daiso has been seeing an increasing number of cosmetic brands each year that want to enter our distribution channels," a Daiso official said. "And it is our plan to keep expanding our brand companies, introducing trendy items for cheap prices."

Daiso, with its over 1,500 stores nationwide, started selling beauty products in 2021 when it focused on small-sized items priced no higher than 5,000 won. As of August this year, over 360 different cosmetic items are on its shelves.

Headlines earlier this year speculated whether Daiso would catch up with Olive Young, a beauty retail franchise company under CJ Group which currently dominates the country's beauty market, and is also particularly popular among foreigners.