Nexti, Growth in Chinese Cosmetics Business..."Targeting 1,000 Franchise Stores This Year"

[Asia Economy Reporter Hyunseok Yoo] NextEye announced on the 30th that it opened a total of 733 franchise stores by adding 252 new stores to the Chinese cosmetics franchise business ‘Yumiae’ last year. The goal is to open 1,000 franchise stores by this year.

Yumiae established 215 franchise stores in its first year of business in 2017, 266 stores in 2018, and secured contracts for 252 franchise stores last year as well. It operates in various forms considering the local market conditions and customer base, including sales of basic and color cosmetics, nail art shops, semi-permanent procedures, and skincare. Franchise stores that have been operating for four years this year continue to place product reorders steadily, maintaining stable business operations.

Along with the increase in the number of franchise stores, Yumiae also recorded sales of 13.9 billion KRW and operating profit of 2.2 billion KRW last year, continuing steady growth since 2017.

A NextEye official said, “Despite external difficulties such as THAAD in the early stages of the business, Yumiae was able to achieve such steady results because it could fully utilize the local network of its parent company, the Chinese beauty franchise company Yumido Group,” adding, “Thanks to Yumido Group’s franchise know-how and technology, Yumiae succeeded in opening about 700 franchise stores in two and a half years.”

He continued, “Not only are new franchise contracts increasing, but product reorders from existing franchise stores are also rising, improving profitability,” and added, “This year, we plan to launch co-branded products with famous cosmetics companies such as ‘Mediheal,’ the number one domestic mask pack brand, and will further accelerate the expansion of online and offline distribution channels.”

Following its offline franchise business, NextEye is also strengthening its approach to online platform markets such as Taobao and Pinduoduo by reflecting global cosmetics consumption trends. NextEye sells its own brand and affiliate products through both Yumiae stores and online platforms.

Meanwhile, NextEye signed a strategic business agreement with L&P Cosmetic, which owns the global mask pack brand ‘Mediheal,’ to launch a co-branded product for the Chinese market cosmetics business. L&P Cosmetic is responsible for product planning, research and development, production, and marketing, while NextEye handles sales through Chinese online and offline channels, as well as pioneering and overall management of the Chinese franchise market.