Lotte ON and SSG.com Expand Cosmetics and Luxury Goods Sections
Market Kurly Enters Cosmetics Targeting MZ Generation After Food
"E-commerce Market Matures... Time to Seek Differentiation"
[Asia Economy Reporter Jeon Jinyoung] The e-commerce industry is diversifying its avenues by reaching out to beauty and luxury sectors to generate profits. Comprehensive malls are strengthening their expertise by introducing premium cosmetics and luxury goods, while specialty stores are expanding their business into comprehensive malls by adding cosmetics categories.
According to the industry on the 29th, Lotte On is actively expanding its beauty and luxury specialty stores based on department stores. It started with the premium beauty specialty store "On and the Beauty," which opened in April. Lotte On has hosted over 3,600 beauty brands, including 81 luxury brands, in On and the Beauty. They also enhanced online-offline integration, allowing customers to request free samples and receive beauty consultations when visiting department stores. As a result, the On and the Beauty club membership surpassed 100,000, and sales in the beauty category grew by 30% year-on-year until August after the specialty store's launch. On the 15th, they opened the luxury specialty store "On and the Luxury."
SSG.com has also entered the specialty store business, focusing on luxury. While renewing the beauty specialty store "Monday Moon," SSG.com signed a strategic partnership on the 22nd with LVMH's cosmetics and perfume division, a French luxury brand. Customer response has been positive, with over 2.6 million actual purchase reviews on Monday Moon. Alongside this, SSG.com created a luxury specialty store hosting official brand stores such as Gucci, Ferragamo, Duvetica, and Burberry.
Market Kurly, known for its strong image in food specialty stores, is preparing to officially open the cosmetics specialty store "Beauty Kurly" in the fourth quarter of this year. Market Kurly plans to introduce brands familiar to the MZ generation (Millennials + Generation Z), such as Lush and Dr. Jart+. Leveraging Market Kurly's strength in curation, they are also preparing a system that recommends suitable products based on customers' age, skin type, scalp type, and frequently used brands.
The industry analyzes that since the e-commerce market has entered a mature phase, it is time to explore various avenues. An industry insider said, "It is difficult to differentiate solely through existing e-commerce functions such as overseas direct purchase and fresh food," adding, "The reason the industry commonly focuses on beauty is that it has a high average transaction value relative to volume and encourages repeat purchases, continuously driving revisits."
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