Shinsegae partners with an Italian cosmetics firmShinsegae International, a fashion retailer of Shinsegae Group, has formed a joint venture with Italy-based Intercos Group to enter the cosmetics manufacturing business.
Under the contract, the retailer and Intercos each own half of the shares and will build a factory and R&D center in Osan, Gyeonggi.
Intercos Group is a global original equipment manufacturer and original design manufacturer cosmetics group.
The production line and center is expected to be in full operation by the second half of next year. The venture will be named Shinsegae Intercos Korea, with CEO Kim Wang-bae of Intercos Korea at the helm. For Shinsegae, the agreement is a part of its efforts to expand its business portfolio in the cosmetics segment, a rising lucrative market.
So far, the retail affiliate has acquired several beauty brands but has never engaged in cosmetics manufacturing.
Shinsegae International has set a sales target of 100 billion won ($85 million) by 2020.
Back in 2012, it acquired a 70 percent stake of local cosmetic brand VIDI VICI. VIDI VICI is a makeup brand established in 2005, and famous makeup artist Lee Kyung-min was behind the brand.
The company went on to buy a domestic copyright for Italian beauty brand Santa Maria Novella.
The company’s appetite for the beauty business comes as Korea’s beauty brands grow in popularity and see healthy sales growth from abroad.
Choi Hong-seong, CEO of Shinsegae International, said the joint venture will be aimed at the Asian market.
Consumer electronics, industrial goods and automobiles used to dominate Korea’s exports. However, cosmetic products are quickly moving up the list and even overshadow the flagship exports products.
Overseas sales for the cosmetics industry rose 73 percent this year through July, according the Export-Import Bank of Korea in September.
BY PARK EUN-JEE [email@example.com]