According to the Small and Medium Business Administration, the export figures for small and medium enterprises (SMEs) have reached record highs in the third quarter of 2026, despite challenging external conditions. Benefiting from the K-Beauty trend, exports to North America, Europe, and emerging markets contributed significantly to this growth.
SME exports for the third quarter amounted to $33.4 billion, reflecting an 8.8% increase compared to the same period last year. Cumulatively from January to September, exports also rose by 9.5% to reach $96.5 billion, achieving record levels for both the quarterly and cumulative measures. The number of exporting SMEs in this period reached 90,765 companies, marking a 1.6% increase year-on-year, setting a new record.
K-Beauty cosmetics stood out prominently in the export performance. In the third quarter, cosmetic exports totaled $2.79 billion, up 28.6%, with a cumulative total of $7.65 billion, reflecting a 26.4% increase. Particularly noteworthy was the rapid diversification of export destinations to emerging markets, such as a remarkable 141.3% increase in Central and South America.
The recognition of indie brands has facilitated their expansion into large offline distribution networks in North America, continuing the trend of achieving the highest third-quarter export records for three consecutive years. In Europe, consumer demand has been bolstered by online platforms, and inventory management in preparation for the year-end shopping season has resulted in a substantial 58.6% growth rate.
A total of 9,469 SMEs were identified in the cosmetics export sector, representing a 6.3% increase compared to the previous year. This growth included both new market entrants and existing exporters, collectively marking the highest number of exporters to date.
Moreover, bolstered by the thriving global AI market, semiconductor exports reached $1.39 billion (+68.8%) and semiconductor manufacturing equipment totaled $1.14 billion (+38.3%), both achieving record highs for the third quarter. Additionally, petroleum products also saw a significant increase to $660 million (+29.3%), primarily driven by markets like Japan and the Philippines. However, the automotive sector experienced a decline, negatively impacted by supply chain disruptions due to geopolitical tensions, particularly with a 66.6% drop in exports to the UAE.
Regionally, the United States emerged as the largest export market for SMEs in K-Beauty, with exports reaching $5.73 billion (+19.6%). This growth is attributed to the expansion of large retail networks and increased demand for battery materials. India also saw continuous increases in exports, totaling $980 million (+12.0%), driven by local manufacturing policies focused on machine tools. Conversely, exports to the Middle East fell to $1.46 billion (-7.8%) due to geopolitical tensions and wartime impacts on countries like Saudi Arabia and the UAE.
The SME online export segment exhibited rapid growth, with third-quarter online exports reaching $470 million, a 62.4% increase year-over-year. The number of exporting companies through online platforms rose by 35.2% to 3,557. Notably, cosmetic exports accounted for 75.3% of online exports, surging by 97.5%. The UK (+729.6%) and the Netherlands (+515.3%) have become key hubs for European online cosmetic exports.
The head of the Global Growth Policy Division at the Ministry of SMEs and Startups noted that K-Beauty has achieved significant results in key and emerging markets despite an unstable external environment. The ministry plans to strengthen various support programs such as export vouchers, overseas certifications, and joint market entries to help SMEs successfully grow into global enterprises.
