The ‘Silicon Valleys’ of Beauty Brace for Tariffs

Paris, New York, London and Tokyo may be home to some of the world’s biggest beauty conglomerates, but those companies often look to another group of cities for their acquisition targets.

Stroll through any Sephora or major beauty retailer and you’re likely to find certain locales vastly overrepresented, with shelves stocked full of skincare from Seoul, makeup from Los Angeles and niche names from Stockholm, Melbourne and Toronto.

The factors nurturing beauty entrepreneurship in each place are unique, but often include some combination of manufacturing infrastructure, creative culture and an imperative to start exporting fast. Global consumer awareness has been boosted by trending categories and products from beauty editors’ obsession with “Scandi” beauty to the latest K-beauty ingredients going viral on TikTok.

However, the landscape for export-focused beauty markets remains uncertain for both indie brands and conglomerates alike amid US President Trump’s ongoing trade war; on July 9, the pause on most tariff increases will be lifted, opening the door to increased price tags. A 25 percent tariff on South Korean goods that is set to go back into effect on that date, for example, “will have a huge impact on my business,” said Daniella Jung, founder and head curator of K-beauty export company Muskat.

As the US is significant for the brands across the globe, they are still forging ahead with expansion in the market even as they make contingency plans for the possible cost increases – looking at shifting production, adjusting prices and focusing their exports on other markets including the EU and the Middle East.

Seoul: K-Beauty’s Next Generation

As K-beauty’s second wave sweeps the world, a new crop of independent brands are demonstrating the category’s enduring appeal. Labels like Medicube, Biodance and Beauty of Joseon are now alongside the likes of Amorepacific-owned Cosrx and Laneige on international shelves. In The State of Fashion: Beauty Volume 2, Amorepacific CEO Sean Kim explained that the US is the company’s most important market.

“Korean people are extremely trend-seeking and trend-sensitive,” said Jung. Because of that, “it’s very tough for any indie brands to survive” without exporting.

But if a trade deal isn’t reached, brands may be taking a closer look at other countries. Korean-made skincare is globally thought to be some of the highest quality in the world, and Seoul offers extensive manufacturing and innovation facilities.

After shifting their export focus from China to the US, brands will look further abroad if the 25 percent tariff is enacted, said Jung. “K-beauty demand is not coming from only the US, but we see a lot of demand from Japan, Europe and even the Middle East,” she said.

Toronto: Export-Led From the Start

The city of Deciem, MAC Cosmetics, Bite Beauty, CoverFx and Nudestix boasts a beauty industry full of founders well-versed in quick global expansion.

With a diverse population and proximity to New York, Toronto has a wide mix of new beauty brands. There are clean beauty brands like hair-care label Everist and skincare labels such as Three Ships and Province Apothecary. Brands making their way into US retailers in the past year have included Basma Beauty, which launched at Sephora US in 2024, and body care brand Sidia, which has added US retailers including Nordstrom and Kith this year.

While exporting is key to global growth, Canadian beauty founders have promoted a “Buy Canadian” campaign that could diminish their reliance on the US. Manica Blain, the founder of Canada-based venture capital firm Top Knot Ventures, said multiple brands in its beauty portfolio saw a sales spike from the movement launched in response to the trade war – Ayurvedic brand Sahajan’s year-over-year DTC sales rose 40 percent, as its portion of Canada-based customers grew by 5 percentage points. The Bank of Montreal estimates consumer patriotism could add $10 billion to the Canadian economy if a mid-July goal for a trade deal isn’t reached.

Los Angeles: American Beauty’s Birthplace

Since commercial makeup as we know it exists thanks to Hollywood, it’s no surprise that Los Angeles has long reigned as a hub for US beauty start-ups in the celebrity brand and influencer era.

Proximity to fame has been instrumental to the creation of beauty unicorns over the years. For all the countless celebrity and influencer brands, some of the savviest are those benefiting from the Hollywood ecosystem, including celebrity makeup artist brands and hip niche labels tapping into California-cool branding.

While LA certainly has its share of manufacturing, many brands produce or at least source materials from abroad, which can spike costs in a trade war. And despite the popularity of Californian and celebrity-led brands abroad, retaliatory tariffs by other countries on American goods could put them at a competitive disadvantage globally.

But the possibility of headwinds certainly hasn’t dented conglomerates’ everlasting interest in California acquisitions.

In June 2025, two of the biggest beauty acquisitions this year took place with Los Angeles-based brands – E.l.f. Beauty’s acquisition of Hailey Bieber’s Rhode, and on June 23, Unilever’s purchase of body-care brand Dr. Squatch.

Stockholm: Scandi Beauty’s Design Hub

Home to a critical mass of “Scandi beauty” labels going global, Stockholm’s beauty market is quickly attracting new brands, investors and global retailers following Puig’s $2 billion acquisition of perfumer Byredo in 2022.

Beauty entrepreneurship has “intensified in recent years,” said David Koo Hjalmarsson, the founder of Stockholm microbiome start-up Kind to Biome.

Earlier labels, like Foreo and Sachajuan, have been joined by a wave of brands reflecting beauty’s take on the city’s design culture. There are avant-garde fragrances like club-kid Unifrom (which took home an honour at the 2025 The Business of Beauty Global Awards), sculptural Stora Skuggan and nature-oriented Björk and Berries. Minimalist looks are represented by makeup brand Manasi 7 (another Global Awards winner), while LVMH-backed private equity firm L Catterton has invested in hair care line Maria Nila.

Brands are figuring out how to circumvent a 50 percent tariff on EU goods that will go into effect in the US on July 9 if a trade agreement isn’t reached.

Josefin Landgård, founder of skincare brand Mantle, said the brand could “move production to the US really easily,” but Europe is comparatively stable. “The US is new for us… it makes sense to ensure we’re doing everything really right in Europe, where we can control things.”

Melbourne: Sun-Born Beauty

With acquisitions of Melbourne-based Grown Alchemist by L’Occitane in 2022 and Aesop by L’Oréal Groupe in 2023, the skincare-heavy Australian city has seen more brands branching out into global markets.

One of the main categories is sunscreen, which has long been produced for international companies in Australia, leading to the development of local start-ups bringing their sunscreens global. There’s Standard Procedure, which launched at Revolve this year, and Ultra Violette, which launched at Sephora US in March 2025 and is sold in 30 countries worldwide.

Other categories are expanding as well – the latest Melbourne brand to go global was body-spray brand Smooch Body, which launched in the US through Revolve in May.

With a 10 percent tariff on Australian goods looming, “I don’t think we’ve been affected like other countries,” said Smooch Body founder Luisa Giansiracusa. But “at the end of the day, it’s also scary as a business owner when there’s uncertainty.”