Growing pains or real threat? Counterfeit products cast shadow over K-beauty

Singapore health authority detects Sudan Red in Medicube product

APR says item was not sold through official export or retail channels

Share price swings despite rebuttal as counterfeit problem persists for years

'Money meant for overseas investment is being spent chasing fakes'

Medicube's PDRN Pink Collagen Capsule Cream [Medicube website]

A fresh counterfeit alert has hit the K-beauty market after a harmful substance was detected in an APR skincare product sold abroad through unofficial channels. APR moved quickly to push back against the findings, but its share price still swung sharply. Industry observers say counterfeits — once seen as a badge of a brand's popularity — have become a genuine threat to K-beauty at a critical stage of its global growth.

According to industry sources Monday, the controversy erupted after Singapore's Health Sciences Authority (HSA) ordered a recall of Medicube's PDRN Pink Collagen Capsule Cream. The HSA tested samples of the product distributed through a local retailer called Venus Beauty and found trace amounts of Sudan IV, a prohibited ingredient. Sudan IV belongs to the Sudan Red family of synthetic dyes used to produce red pigmentation; it is banned in South Korea and numerous other countries because exposure can cause cancer.

However, when APR traced the batch number of the sample the HSA had tested, it found no record of that product ever being officially exported to Singapore. Venus Beauty, the retailer that sold the sample, also turned out to be a company APR had never supplied. "Venus Beauty is not a company to which APR directly supplied or exported products," the company said, adding that it was not part of APR's official Singapore retail network. APR also confirmed there was no official export record for the product bearing that batch number.

Formal products that APR's Singapore subsidiary provided directly to the HSA tested negative for Sudan Red. The HSA lifted its sales and supply suspension order on Aug. 26. An additional test APR commissioned from an accredited testing agency on Aug. 31 also returned no detection of Sudan Red. APR released the test results publicly, but its share price still fell — from an intraday high of 475,000 won ($351) on Saturday to 392,000 won Monday.

Whether the product tested by the HSA was actually a counterfeit has not been confirmed. The industry, however, leans toward that explanation, given that APR — which generates most of its sales overseas — has been battling counterfeit problems for years. In July alone, fake APR products were seized in Guangzhou, China, and Romania: more than 6,000 suspected Medicube imitations were confiscated in Guangzhou, and about 100 suspicious items were identified in Romania. The problem has become so widespread that tips on how to spot genuine products — "check the QR code," "compare the font on the packaging" — are now circulating on global social media platforms including YouTube and TikTok.

A photo released by APR showing a raid on a facility manufacturing counterfeit Medicube products made in China, conducted last April. [Provided by APR]

Korean cosmetics brands Sulwhasoo and The History of Whoo once suffered badly from counterfeits in the Chinese market — a problem that was at the time dismissed as a sign of popularity or merely growing pains. The situation has changed. As K-beauty has expanded onto a global stage, the counterfeit market has grown with it. The number of overseas online listings for counterfeit Korean cosmetics brands that were blocked jumped nearly 54 percent last year to 36,116 cases, according to the Korea Intellectual Property Office.

The industry now views the counterfeit problem as a long-term threat to K-beauty's growth. Tracking fakes, coordinating crackdowns, securing seizures and requesting sales suspensions all fall largely on the brands themselves. The Medicube counterfeits seized in China and Romania were uncovered through cooperation between APR and local customs authorities. For smaller indie brands, such measures are simply out of reach. "Money that should be going into overseas market investment is being spent chasing counterfeit products," one industry official said.

Experts are paying close attention to this latest case because harmful substances were detected. Kim Ju-deok, a chair professor in the beauty industry department at Seoul Cyber University, said counterfeit products once produced mainly in China are now appearing in large numbers across Southeast Asia as well. "Because harmful substances were detected — not just a simple fake — this is an issue that could damage trust in K-beauty," he said. He added that counterfeit problems are likely to keep arising and that swift action is needed not only at the corporate level but also through government-to-government cooperation.

soho0902@heraldcorp.com