Amore Global Strategy Shift
LG Household & Health Care Expands Physiogel Sector
Aekyung Accelerates New Market Development
[Asia Economy Reporter Yujin Cho] Beauty companies pushed to the brink by the 2020 novel coronavirus disease (COVID-19) crisis are struggling to establish their business plans for next year. With the COVID-19 impact expected to continue next year, they have put forward keywords such as strengthening e-commerce and going global as desperate measures, but it is proving difficult to find a breakthrough as demand recovery in key markets remains challenging.
According to the related industry on the 4th, Amorepacific is preparing a company-wide strategy meeting (S-Con) to thoroughly review this year’s management performance and business unit strategies. Key executives and heads of overseas subsidiaries will all attend. Having undertaken intensive restructuring through regular personnel changes, Amorepacific is focusing its business plan on 'offline channel efficiency' and 'global' strategies.
In overseas markets, it has begun repositioning the Laneige brand as a luxury brand. In particular, the plan is to develop Laneige alongside Sulwhasoo as luxury brands in the Chinese market. Recently, through regular executive appointments, the Laneige business unit was separated as an independent unit as part of this effort. An Amorepacific official said, "We have accelerated the offline channel efficiency work faster than originally planned, and this trend will continue next year." The offline channel efficiency work, centered on store consolidation, is expected to maintain a restructuring atmosphere through the first half of next year.
LG Household & Health Care recently drafted its business plan for next year through a report session with LG Group Chairman Koo Kwang-mo. Among the three major beauty companies, LG Household & Health Care was the only one with good performance and is regrouping through the reappointment of its CEO. The strength of the luxury brand 'Whoo,' which has a solid consumer base in China, has been proven through its results. Next year’s challenge is to expand the scope of the European derma cosmetics brand Physiogel, acquired this year. The plan is to accelerate business expansion using local subsidiaries in the three major global beauty markets: the United States, Japan, and China.
Aekyung Industrial will complete the draft of its business plan for next year within this week. Aekyung Industrial is also focusing on overseas expansion. Instead of 'new products,' it plans to emphasize expanding 'new markets.' It will undertake preparatory administrative procedures to break into new markets such as the United States and Russia, in addition to the already entered China and Southeast Asia. An Aekyung Industrial official said, "We achieved meaningful results through the recent Amazon live broadcast of Age 20’s," adding, "The rising popularity of K-pop and the increasing recognition of K-beauty are expected to positively influence global business expansion."
Meanwhile, the beauty industry widely anticipates that even after the COVID-19 situation calms down, the continued wearing of masks will make it difficult to fully recover the collapsed demand for cosmetics.
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