Unhasu

When Kim Jong Un (김정은) visited the Pyongyang (평양) Cosmetics Factory in February 2015, his verdict was brutal: domestic eyeliner and mascara created “raccoon eyes” with just a yawn, while foreign products stayed pristine even underwater. He sent 138 luxury cosmetics from Chanel, Dior, and Shiseido for reverse engineering. Then UN Resolution 2375 banned chemical imports, cutting off the raw materials needed to replicate them.

Origins of State-Engineered Beauty

Kim Il Sung (김일성) established the Pyongyang Cosmetics Factory in April 1962 as part of North Korea’s juche (주체) self-reliance industrialization push. The name “Unhasu” (은하수)—Milky Way—suggested cosmic ambition and purity, contrasting with the earthier “Pomhyanggi” (봄향기, Spring Fragrance) brand from the rival Sinuiju (신의주) Cosmetics Factory established in 1945 near the Chinese border. For five decades, both factories operated in the shadows, producing basic soap, toothpaste, and face creams for state distribution quotas rather than consumer choice.

The rivalry intensified under Kim Jong Il (김정일), who visited the Sinuiju factory in June 1999 and personally selected its relocation site “at the foot of a scenic mountain” with clean water. Four years later, he visited the Pyongyang factory and created a commemorative mosaic: “To Provide Our People with Better Cosmetics.” His instruction was explicit: wage fierce competition with Sinuiju. This state-engineered rivalry, the “twin buttresses” of North Korean cosmetics, would drive innovation for the next two decades.

From Humiliation to Crisis

The February 2015 “raccoon eyes” incident marked a turning point. Kim Jong Un’s public humiliation of product quality created urgency that decades of gradual improvement had not. The 138 luxury products he sent for reverse engineering represented an admission: North Korea’s cosmetics lagged not just South Korea but the global market by three to four decades. Analysis of these products—Chanel foundations, Dior mascaras, Lancôme serums, Shiseido skincare, La Mer creams—would inform a modernization push.

By May 2015, the factory’s Biotechnology division announced “functional cosmetics with stem cell technology.” The October 2015 National Exhibition showcased 80 cosmetic types from both Pyongyang and Sinuiju factories. Products began appearing alongside Lancôme, Clarins, and Chanel in Pyongyang Department Store No. 1. But this progress collided with escalating sanctions.

UN Resolution 2270 (March 2016) established precedents for luxury goods restrictions. Resolution 2321 (November 2016) tightened financial restrictions after North Korea’s fifth nuclear test. Then came September 11, 2017, and Resolution 2375—the chemical import ban that threatened to freeze North Korean cosmetics development permanently. Dr. Nam Sung-wook of Korea University documented the bind: “Developing new cosmetics products requires supplies of new materials and substances from overseas, but current UN sanctions prohibit the North from importing chemicals.”

Modern cosmetics require synthetic preservatives, emulsifiers, and active ingredients. Without access to international cosmetic chemistry advances—new preservative systems, encapsulation technologies, silicones, peptides—Unhasu faced permanent technology stagnation. Simultaneously, luxury goods classifications prevented legal exports to the EU, US, Japan, South Korea, and Australia, representing 77% of the global cosmetics market.

The Indigenous Pivot

Within weeks of the sanctions, authorities ordered complete factory reconstruction. The directive came from the top, and in North Korea’s command economy, that meant unlimited resources and no room for failure. The investment likely ran $10-50 million based on scale, though North Korea never disclosed figures.

What emerged in October 2017 was a technology-intensive model factory with separate production, education, and living districts, automation equipment, and germ-free, dust-free production lines. But the physical transformation mattered less than the strategic pivot. Instead of fighting the sanctions, Unhasu embraced them.

The brand pivoted entirely to indigenous ingredients: Kaesong (개성) Koryo ginseng (a premium variety), Kumdang flower, mung bean, honey, aloe, rose water, apricot seed oil—plants that grow within North Korea’s borders. This wasn’t merely substitution; it was repositioning. Marketing emphasized “natural, innocuous, functional” products versus “chemical-heavy” foreign brands. The constraints of sanctions became the competitive advantage that brands with unlimited supply chains would never discover on their own.

Kim Jong Un’s October 2017 visit with wife Ri Sol Ju (리설주) validated the transformation. State media reported his praise for “world-level products” and “very distinctive” packaging. The factory received designation as “model and standard for the country’s cosmetics industry.” Production increased six-fold post-reconstruction, from roughly 2.5 million to an estimated 15 million units annually.

Export Networks and Enforcement Risks

By May 2018, the first export shipment reached a Moscow boutique. The Korean Care online shop established Russian distribution, eventually reaching 10,000 customers. China followed through Taobao and JD.com e-commerce platforms, border trade through Dandong (丹东) and Yanbian (延边), and customized packaging featuring red and white sections, silver dots, and pink stripes designed for Chinese consumers. Prices ranged from 150-800 yuan ($21-$112), positioning products as “traditional and natural” to overcome distrust about ingredient safety. Iran joined the export network. Cyprus and Australia were announced as future targets.

This expansion carried risks. In January 2019, American cosmetics company e.l.f. paid $996,080 to settle US Treasury charges for importing North Korean materials—a warning to any Western company that might source from or partner with North Korean suppliers. The sanctions regime remained effective enough to constrain legitimate trade, even as informal channels proliferated.

COVID-19 created another crisis. The January 2020 border closure devastated supply chains for two years. Prices for smuggled South Korean cosmetics inside North Korea jumped ten-fold, reaching $500-1,000 per set for brands like Sulwhasoo and Laneige. Yet Unhasu’s indigenous ingredient strategy proved resilient—domestic production could continue even when borders sealed completely.

The Quality Gap

Independent testing tells a more complex story than state media celebrations. Korea University researchers, partnering with Amorepacific Research Center (South Korea’s leading cosmetics firm), procured 64 North Korean cosmetics through Chinese nationals and US visitors to Pyongyang between June 2016 and January 2018. Products were smuggled out for chemical compositional analysis.

Seven of 64 products (10.9%) had quality concerns. Researchers detected methylparabens and propylparabens—preservatives with potential hormone disruption concerns that modern cosmetics have largely phased out. Products exhibited physical defects: formulations that were runny or separated, bottles that smelled strongly of food-grade ginseng, pumps that didn’t dispense properly due to obsolete gold molding technology. The assessment placed North Korean basic cosmetics at 1990s South Korean levels, color cosmetics at late-1980s equivalents.

These findings directly contradict Chief Engineer Lee Seon-hee’s claims during a rare September 2018 Global Times factory tour. She asserted products ran “neck and neck with Chanel” on stability, safety, sensation, and effect, and “outperformed Chanel on safety” due to local sourcing. The gap between state narrative and laboratory reality remained substantial.

Yet the brand narrative proved more powerful than test results. Domestic demand surged through state media saturation and the gift economy—cosmetics distributed as “beauty rations” to loyal citizens on Kim family birthdays, Founder’s Day, and as rewards for competition winners, female soldiers, and factory workers. Defector testimonies suggest recipients often resell these products for cash or to buy preferred Chinese alternatives, indicating low genuine demand despite high symbolic value.

Consumer Reality and Competition

The consumer landscape reveals tensions between propaganda and preference. Pyongyang Department Store No. 1’s beauty section ranks among its most popular departments. Jangmadang (장마당) informal markets generate 75% of household income and distribute Chinese and smuggled foreign cosmetics. A middle class estimated at 30-50% of Pyongyang residents drives demand for lifestyle products.

Unhasu competes domestically with Sinuiju’s 270 product varieties, Chinese imports (lotions at 2,000-4,000 won, foundations at 3,000-5,000 won, lipsticks at 500-2,000 won—dramatically cheaper than Unhasu), and smuggled South Korean brands. Despite state promotion, defector sources consistently report South Korean products remain most desired: “Even if hard to get, people try to buy South Korean cosmetics for fiancés as wedding gifts, since it is regarded as the best and symbol of wealth.”

The state-engineered competition continues. Kim Jong Un’s June 2018 visit to the Sinuiju factory explicitly encouraged “comparing products with Unhasu.” This dynamic maintains pressure on both enterprises while demonstrating industrial vitality through controlled market competition.

Product Portfolio and Positioning

The factory’s research institute, staffed by young personnel in their twenties and thirties, developed over 470 formulations post-reconstruction. The portfolio now spans anti-aging creams, whitening serums, moisturizing lotions, UV protection products, sheet masks, foundations, mascaras, eyeliners, hair loss treatments, men’s toiletries, and fragrances. Products are displayed in the factory’s on-site shop and at Pyongyang Department Store No. 1, the nine-floor flagship in Jung-guyok district where the beauty section ranks among the most popular.

Pricing positions Unhasu as premium by North Korean standards. Products sell for approximately 200,000 won (roughly $5-30 USD depending on the fluctuating exchange rate)—expensive enough that recipients of gift economy distributions often resell them for cash or to buy preferred Chinese alternatives. Export pricing in China ranges from 150-800 yuan ($21-$112), with most anti-wrinkle creams priced under $100 to enable international price competitiveness against established K-beauty and J-beauty brands.

The claimed certifications—ISO 9001:2008 and GMP for over 100 products—remain unverified by international auditors. Eurasian Economic Union certification for 30 products, achieved in November 2020, represents the most credible external validation, enabling legal access to member state markets including Russia, Kazakhstan, Belarus, Armenia, and Kyrgyzstan.

Cultural Context: Beauty as Ideology

Cosmetics occupy a unique space in North Korea’s consumer economy. Under Kim Jong Un’s “parallel development” policy—nuclear weapons alongside economic improvement—consumer goods became regime legitimacy tools, offering material improvements without political freedoms. The emergence of a middle class, estimated at 30-50% of Pyongyang residents and 10-20% nationally, drives demand for lifestyle products that signal status and aspiration.

Beauty serves triple functions: actual use, gift economy currency (state rewards, wedding gifts, bribery), and resale assets. Ri Sol Ju, Kim Jong Un’s wife, and the Moranbong Band (모란봉악단) establish acceptable beauty standards—natural-looking makeup, modest application, “gentle, simple, elegant” aesthetics that contrast with heavier South Korean contouring trends. The brand narrative positions domestic cosmetics as patriotic alternatives to foreign products, even as consumer behavior reveals opposite preferences.

The strategic directive from Kim Jong Un himself captured the ambition: “Make it so our people prefer Unhasu products to foreign-made cosmetics, and further, so that Unhasu cosmetics become the talk of the global market.” Whether through genuine product quality or controlled narrative, the brand continues pursuing this vision against extraordinary constraints.

Strategic Implications

Unhasu demonstrates how authoritarian states can rapidly mobilize capital to transform strategic industries when regime legitimacy is at stake. The brand’s survival proves that sanctions can drive adaptation rather than compliance, forcing innovation that creates competitive positioning unavailable to those with unlimited resources.

For businesses facing supply chain disruption or regulatory constraints, Unhasu offers a counterintuitive lesson: constraints strategically leveraged can become competitive advantages when you control the narrative. The brand couldn’t compete on formulation sophistication, so it competed on purity. It lost access to synthetic compounds, so it positioned natural alternatives as superior. It couldn’t export to premium markets legally, so it built alternative distribution through Russia, China, and Iran.

The three unique advantages Unhasu leveraged remain unavailable to private firms: authoritarian resource mobilization without profit constraints or shareholder accountability; sanctions evasion infrastructure built for weapons programs now applied to consumer goods; and propaganda integration that generates demand through state media regardless of product quality. These factors make direct imitation impossible, but the underlying strategic principle—turning constraint into differentiation—transfers to any business facing external restrictions.

The 62-year journey from Kim Il Sung’s industrialization campaigns to Kim Jong Un’s export ambitions shows a state factory adapting across three generations of leadership. Whether that adaptation produces genuinely world-class products remains debatable—Korea University’s testing suggests it does not. But that it produced a survival story unmatched in the global cosmetics industry is beyond question. In 2023, beauty exports to China jumped 13-fold as post-COVID trade resumed, reaching 82.3% of 2019 levels. The Milky Way brand continues its improbable orbit.

Last updated: January 15, 2026