South Korea’s small and medium-sized enterprise (SME) exports hit an all-time high in the third quarter, powered by robust performance in K-beauty exports and semiconductors.
According to the Ministry of SMEs and Startups on October 26, Q3 SME exports rose 8.8% year-on-year to reach $33.4 billion (approx. 44.15 trillion KRW). Cumulative exports from January to September also increased by 9.5% to $96.5 billion (approx. 127.56 trillion KRW). Both quarterly and cumulative figures mark the highest ever recorded. Additionally, the number of exporting SMEs for the first nine months grew 1.6% to reach 90,765 companies, setting a new record.
K-Beauty and AI Semiconductors Drive Growth
The upward momentum in exports was largely spearheaded by cosmetics. In the third quarter, cosmetic exports surged 28.6% year-on-year to $2.79 billion (approx. 3.68 trillion KRW). Cumulative exports from January to September similarly jumped 26.4% to $7.65 billion (approx. 10.1 trillion KRW), breaking previous records for both categories. This growth was driven by domestic indie brands that built strong recognition on online platforms like Amazon and TikTok Shop, successfully expanding into major North American retail networks and establishing a strong omni-channel presence.
K-beauty export markets are also diversifying globally. During the third quarter, cosmetic exports grew 33.1% in North America, 58.6% in Europe, and skyrocketed 141.3% in emerging Latin American markets. The number of SMEs exporting cosmetics between January and September increased by 6.3% to 9,469 companies. Notably, cosmetics accounted for 75.3% of total online SME exports ($470 million) in the third quarter.
Meanwhile, semiconductor-related exports showed strong momentum fueled by the artificial intelligence (AI) market boom. Third-quarter semiconductor exports rose 68.8% to $1.39 billion (approx. 1.83 trillion KRW), while semiconductor manufacturing equipment grew 38.3% to $1.14 billion (approx. 1.5 trillion KRW), both setting Q3 records. Petroleum product exports also climbed 29.3% to $660 million (approx. 870 billion KRW) due to rising international oil prices.
Shifting Export Destinations and Challenges
Conversely, automobile exports dropped 42.4% during the same period to $1.51 billion (approx. 1.99 trillion KRW). This decline was attributed to reduced shipments to former Soviet bloc countries—stemming from Russia’s introduction of a consumption tax on imported used cars—coupled with escalating geopolitical instability in the Middle East. Exports to the United Arab Emirates (UAE) plummeted 66.6%, deepening the overall downturn.
Shim Jae-yoon, Director General for Global Growth Policy at the Ministry of SMEs and Startups, stated, “Despite an unstable external environment, our SMEs are achieving strong export results in core markets like the U.S. and emerging markets such as Latin America. We will further strengthen export vouchers and support for joint entry initiatives between large enterprises and SMEs.”>
