Korean SMEs Hit $118.6B Export Record on Used Cars and K-Beauty Boom

$118.6 billion. That's how much South Korean small and medium enterprises exported in 2025, smashing previous records with a 6.9% year-over-year increase. But the real story isn't just the numbers—it's what Korean SMEs are selling, and where.

The Unexpected Export Champions

Used cars led the charge with a staggering 76.3% surge to $9 billion, driven by robust demand from Commonwealth of Independent States and Middle Eastern countries. This isn't just about Korean automakers' reputation for reliability—it's about how that brand trust extends far beyond new vehicle showrooms.

Think about it: when someone in Kazakhstan or UAE chooses a used Hyundai or Kia over alternatives, they're betting on Korean engineering quality lasting through multiple owners. This secondary market success suggests Korean automotive brands have achieved something many manufacturers struggle with—genuine long-term consumer confidence.

Meanwhile, cosmetics exports hit a record $8.3 billion, up 21.5%, as K-beauty continued its global conquest. From Innisfree to countless smaller brands, Korean skincare and beauty products have become synonymous with innovation and quality worldwide.

China Still Leads, America Feels Tariff Pressure

China remained the top buyer at $18.9 billion (up 5.5%), proving that economic ties often transcend political tensions. Despite ongoing geopolitical friction, Chinese consumers and businesses continue embracing Korean SME products.

The US market tells a different story. Exports dropped 0.6% to $18.3 billion, with tariffs cited as the primary culprit. This modest decline could foreshadow bigger challenges as the Trump administration signals more aggressive trade policies toward Korea.

The Broader SME Export Ecosystem

The number of exporting SMEs reached 98,219—another record. This suggests Korea's export growth isn't concentrated among a few large players but distributed across thousands of smaller companies finding their global niches.

However, this trend raises questions about domestic market health. Are more SMEs exporting because they're globally competitive, or because Korea's shrinking domestic market offers limited growth opportunities? The answer likely involves both factors.

What This Means for Global Markets

For international buyers, Korean SME success reflects broader shifts in global supply chains. Countries seeking alternatives to Chinese manufacturers are increasingly turning to Korean companies that offer competitive pricing with developed-nation quality standards.

For competitors, particularly in automotive and beauty sectors, Korean SME growth represents both opportunity and threat. Partnership possibilities exist, but so does intensifying competition in markets previously dominated by Western or Japanese brands.