Guest Reports

[Sponsored Report] AmorePacific keeps reaching globally

Left: In June 2015, Amore Pacific unveiled its boutique located inside Bloomingdale’s flagship store in New York. It became the first Korean cosmetics company to open a counter in the luxury department store. Right: In April 2012, Amore Pacific opened the flagship store of its green cosmetics brand, Innisfree, in downtown Shanghai. The launch came at a time when natural ingredients were trending in the Chinese beauty community.[AMORE PACIFIC]

Since becoming the first Korean cosmetics company to export its products in 1964, AmorePacific has consistently used beauty - a concept it believes transcends national and cultural borders - to reach out to customers around the world.

The company’s globalization strategy dates back to the early 1990s, when it built production facilities in China and France, laying the foundation for what would eventually become a successful global business. Today, AmorePacific has its eye on three lucrative markets: the United States, China and France.

Statistics on the company’s performance abroad indicate that its prospects for global expansion are bright. By late 2015, its overseas cosmetics sales amounted to over 1.26 trillion won ($1.07 billion), a 44.4 percent surge year on year. In Asia, AmorePacific has concentrated its efforts on promoting its five most successful cosmetics brands: Sulwhasoo, Laneige, Mamonde, Innisfree and Etude House. Under this business model, the cosmetics giant saw a 51.5 percent spike in sales revenue in the region between 2014 and 2015. The company took a slightly different approach with the North American market, however, focusing on expanding its reach through securing distribution channels. There, its sales revenue rose by 39 percent during the same period.

This year, AmorePacific will continue to pursue a globalization strategy centered on its five biggest brands to sustain its upward momentum in Asia and strengthen its presence in developed markets.

With a makeup-wearing population of over 100 million and counting, China has seen its cosmetics market grow by approximately 10 percent every year. As the leading supplier of Korean cosmetics in China, AmorePacific attributes its ever-stronger performance in the country to its new stores, heavy promotion of its best-selling products and active digital marketing.

The United States is also high on the company’s list of priorities, being one of the top three markets for skin care. AmorePacific first attempted to enter the U.S. cosmetics market in 1984, when it set up a branch office in Los Angeles. Despite the ambitious move, the company soon realized its customer base consisted mainly of overseas Koreans.

After experiencing difficulty attracting non-Korean customers, AmorePacific decided that it needed to first build a global brand before it could successfully break into the American beauty industry. The process involved the development of a new corporate identity, during which the company’s current logo was born.

Last June, AmorePacific became the first Korean cosmetics brand to open a store in Bloomingdale’s, an iconic U.S. chain of luxury department stores. Located on the first floor of the flagship store in New York, the store is one in a series of successes the company has had in the United States. Its luxury line is now housed in over 60 U.S. department stores, including Neiman Marcus, Bergdorf Goodman and Nordstrom, while its premium brand Laneige is stocked in Target, the country’s second-largest discount retailer. AmorePacific products are also available in 216 Sephora stores across the United States and Canada.

In France, the company has chosen to target the fragrance industry. In 1990, it set up a local subsidiary in Chartres, a city located 96 kilometers (60 miles) southwest of Paris. There, it developed Lolita Lempicka, a perfume brand that was released in 1997 and soon captured the attention of the French public. Within two years, the brand’s market share grew to nearly 1 percent. Its products have also received accolades over the years, being named “Fragrance of the Year” several times in both the women’s and men’s category of the FiFi Awards, widely considered the most prestigious awards ceremony in the fragrance industry.

In August 2011, AmorePacific successfully took over Annick Goutal, a high-end perfume brand created in 1981 by a French pianist and model of the same name.

BY PARK HYE-MI [park.hyemi@joongang.co.kr]