AmorePacific's Tenacity First Breaks Through in China

Key Brand Product Enhancement Strategy
'Sulwhasoo' Jaumsaeng Essence
Q1 Sales Grow 80%

[Asia Economy Reporter Lim Hye-seon] The tenacity of Seo Kyung-bae, Chairman of Amorepacific Group, is showing strong results. After leading growth by overcoming the past foreign exchange crisis, he has now overcome the COVID-19 wave and is making another leap forward. Since the import cosmetics market opened in the 1990s, changes in cosmetics distribution channels caused Amorepacific to face a crisis. To save the company from a deficit state, Chairman Seo Kyung-bae streamlined the business by focusing solely on cosmetics and divesting many other affiliates. During this period, hit brands 'Mamonde' and 'Laneige' were born.

Despite the foreign exchange crisis, Chairman Seo emphasized trust with customers and innovation to be different from others, dedicating himself to research and development (R&D). The result was 'IOPE Retinol 2500.' During the 2008 financial crisis, Amorepacific Group grew by 13% compared to the previous year.

‘Engine Product Strategy’ Results

At the beginning of the year, Chairman Seo set the ‘Engine Product’ strategy, aiming to nurture key products of each brand to achieve unmatched competitiveness. According to Amorepacific on the 31st, the ‘Engine Product’ targets include Sulwhasoo’s ‘Jaumsaeng Line’ and ‘Yoonjo Essence,’ Laneige’s Perfect Renew Line and Neo Cushion, Innisfree’s Black Tea Youth Ampoule and Green Tea Line, among others. Product strength was enhanced through renewal last year, and marketing efforts have been focused on since this year. In the case of Sulwhasoo, performance was strengthened centered on the Jaumsaeng Essence. The results first exploded in China. In the first quarter, Sulwhasoo’s sales in the Chinese market grew by more than 80% compared to the same period last year. In the first quarter of this year, Sulwhasoo’s share of the Chinese business brand portfolio rose to 30% for the first time. Last year, sales of Jaumsaeng Essence on Tmall increased by 174% compared to the previous year. During the Chinese Women’s Day on March 8, sales also increased by more than 100%.

Laneige also opened the ‘Beauty Life Lab’ early this year and is focusing on strengthening product power. The ‘Perfect Renew Line’ was renewed and introduced to the Chinese market for the first time in February this year. Laneige’s sales grew by 30% in the first quarter. Laneige’s sales are also on the rise in duty-free shops.

China, Targeting Niche Markets

Amorepacific is also actively developing niche brands. From last year through January this year, six new brands were launched: Philvoid, Siyenu, Holiritual, Labo H, Enough Project, and Soluderm. Among these, the scalp skincare brand Labo H saw cumulative brand sales grow by 540% year-on-year in April and ranked first in the hair loss scalp category at various beauty awards.

The inner beauty brand Cube Me recorded a 56% sales increase in March compared to the same period last year. Cube Me products are characterized by chewable types and ampoule forms, designed for busy modern consumers to easily consume without water. Amorepacific’s men’s makeup specialist brand Be Ready has been steadily achieving results in the men’s makeup market since entering China’s Tmall (Global) in February last year. Sales in March this year grew by more than 540% compared to the previous year. Be Ready is preparing to open offline stores in China next year.

An industry insider said, "Since the second half of last year, recovery has appeared mainly in China and in basic and luxury cosmetics, and now a general rebound including color cosmetics is expected," adding, "Amorepacific’s performance is expected to improve as sales increases are gradually reflected not only in Sulwhasoo but also in Laneige and Hera."