Korea's #3 budget beauty brand — founder went to prison for embezzlement

Skinfood was founded in 2004 with the concept of 'cosmetics made from delicious ingredients' — skincare and makeup based on food ingredients. It grew rapidly to become Korea's third-largest budget beauty brand, reaching peak annual sales of 200 billion won within five years. The company was known for its no-sale-promotions policy, refusing to participate in the frequent discount events that competitors held.

The decline began in 2014 with four consecutive years of losses. The 2015 MERS outbreak slashed tourist traffic, the 2016 THAAD diplomatic row cut Chinese tourist visits, and the budget cosmetics market became saturated with excessive competition. By 2017, sales had fallen 25% year-on-year to 126.9 billion won. Debt reached 43.4 billion won with a debt-to-equity ratio of 781%. Fourteen partner companies filed for court injunctions over unpaid bills of approximately 2 billion won.

On 8 October 2018, Skinfood filed for court receivership (회생절차) with the Seoul Bankruptcy Court. In May 2020, founder Jo Yun-ho was sentenced to five years in prison for breach of trust. The court found that he had funnelled more than 10 billion won from Skinfood's online sales revenue to his personal company between 2006 and 2018, and had the company pay for personal costs including the purchase and maintenance of racehorses. The total embezzlement was approximately 12 billion won ($9.7 million). Skinfood was later acquired by Goodai Global for approximately 150 billion won.