Urbanica to Launch Korean Beauty E-Commerce Site in Israel

Urbanica, part of the Castro Group, is entering the K-Beauty market by launching an online store named Moida K-Beauty. The company has signed a principal agreement with Silicon2, a major global distributor and retailer of Korean skincare and cosmetics. Silicon2 distributes popular brands such as Beauty of Joseon, Medi-Cube, Cosrx, Anua, Skin1004, and Jumiso, many of which have seen significant success in Israel.

The joint venture will establish a company in Israel where Urbanica will hold a 70% stake and Silicon2 will hold 30%. The initial investment is approximately NIS 60 million, with Urbanica contributing around NIS 42 million, allocated proportionally to their ownership.

K-Beauty has gained global popularity, with Israeli retailers like Super-Pharm and April dedicating shelf space to these products. However, many Israelis currently purchase K-Beauty items from international websites like iHerb, Olive Young, Style Korean, and YesStyle due to more favorable pricing. These brands are known for innovative ingredients such as snail mucin and rice extract, and unique product formats like toners and ampoules.

Consumer advocates question whether Moida K-Beauty will offer competitive pricing compared to international online retailers and if products will also be available in physical stores. "The purchase of K-Beauty products is mostly done through overseas sites because they usually offer special, sometimes exclusive, packages that are significantly cheaper, often half the price of the same Korean sunscreen sold in Israel at double the cost," noted Efrat Zoey Kedem King, a lawyer and consumer community manager. She also pointed out that exclusive collaborations, like Anua with K-pop characters or Unove hair products with Powerpuff Girls branding, might not reach Israeli stores or websites.

Silicon2 is a publicly traded company valued at over $2 billion, with logistics and distribution centers in the US, Europe, Dubai, and Southeast Asia. It operates the e-commerce platform StyleKorean.com, which serves as a primary distribution channel for Korean beauty brands to over 170 countries. The company also identifies and supports emerging Korean beauty brands for international markets and has a retail concept called MOIDA for establishing K-Beauty stores and platforms globally. Silicon2 works with over 550 Korean beauty brands and recently formed a strategic partnership with European cosmetics chain Douglas, which is controlled by the investment fund CVC Capital Partners.