Finance ministry unveils plan to turn K-beauty into AI-driven services export

The finance ministry said Wednesday it will support the expansion of Korea's beauty industry from cosmetics manufacturing into AI-driven and medical beauty services, approving a joint package of measures at an economic ministerial meeting chaired by Deputy Prime Minister and Finance Minister Lee Hyung-il.

The plan aims to turn "K-beauty" into a high-value service industry by combining cosmetics with artificial intelligence, data and devices. A key element is opening the government's skin data bank — information on the skin characteristics of about 17,000 people in 18 countries — to companies in a form suitable for AI training, and widening the number of countries covered so firms can develop AI skin diagnosis, analysis and personalized beauty products.

The government will back a cosmetics-AI industry research alliance with 7.2 billion won ($5.39 million) over 2026 and 2027 to develop quality and process AI agent technology for customized cosmetics, and will ease on-site difficulties in using AI and automated equipment for personalized cosmetics.

Under current rules, a customized-cosmetics dispensing manager must be present in every store. The government will allow such managers to oversee multiple stores using AI and automated devices, and will build infrastructure including a database and expanded corporate consulting to support a cosmetics safety assessment system due to be introduced in 2028.

The measures extend to medical beauty and to regional and overseas markets. The government will push to build an integrated K-healthcare hub platform covering the full journey of foreign patients, from pre-treatment consultation to aftercare. An information strategy planning phase is scheduled for 2026, with the platform to be built in 2027 and 2028.

K-beauty clusters combining promotion, experience and buyer consultations will be established in Gyeongju and Jeju. To make it easier for foreign visitors to pay, the government will increase the number of stores equipped with standardized QR codes to 80,000 in 2027 from 40,000 in 2026. A K-beauty academy will open in Osong, North Chungcheong Province, in the first half of 2027 to train 1,900 professionals a year on average, including foreigners, in fields such as hair and makeup.

On the financing side, the government will keep investing from a 43 billion won ($32.2 million) global K-beauty fund set up jointly with cosmetics manufacturers Kolmar Korea and Cosmax. It will create a 25 billion won ($18.7 million) open innovation venture fund and offer preferential guarantees to cosmetics companies with strong technology, raising the guarantee ratio to as much as 95 percent from 85 percent and cutting the guarantee fee by 0.2 percentage point.

"We need a second and third runner to drive growth alongside semiconductors, and one of them is the service industry," Lee said. Joo Hwan-wook, the ministry's policy coordination director, said the government will carry out the measures without disruption to raise K-beauty's global competitiveness and will work closely with the National Assembly to enact a basic law on service industry development.