Sales: $4.1 billion
Key Personnel: Kyung-bae Suh, chairman and chief executive officer; Dong-hyun Bae, president and chief executive officer; Seung-hwan Kim, managing director, planning and innovation.
Major Products: Skin Care—Sulwhasoo, Laneige, Mamonde, Innisfree, Hera, Iope, Happy Bath, Primera, Odyssey, Illi, Lirikos, Aestura, Makeon; Cosmetics—Etude, Hanyul, Espoir, Aritaum; Fragrance—Annick Goutal, Lolita Lempika; Inner Beauty—Vital Beauty; Hair Care—Ryo, Mise-en-Scéne; Oral Care—Median.
New Products: Luminous Effect Brightening Serum, Moisture Bound Intensive Serum Masque and Future Response age defense serum.
Comments: With the beauty industry’s obsession for all things Korean, it’s no wonder that sales rose 23% last year at AmorePacific, Korea’s largest beauty company. After all, the company’s cushion cosmetic technology has become the darling of the beauty world with competitors introducing versions of their own and others, like Parfums Christian Dior, buying access to the concept.
In the luxury cosmetics category, Sulwhasoo’s sales topped 1 trillion won, while Hera makeup lines entered the Hong Kong travel retail channel. In fact, AmorePacific’s travel retail business exceeded 1 trillion won for the first time.
Korea still accounts for more than 70% of sales, but it is AmorePacific’s explosive growth in China that’s catching everyone’s eye. After years of watching from the shoreline, Chinese consumers are finally riding the Hallyyu Wave; i.e., the phenomenon of Korean entertainment and popular culture that gripped the rest of the world years ago. The surging interest in Korean culture helped AmorePacific’s sales in China to jump more than 60% in 2015 to account for more than 20% of revenue.
Just last month, the company opened two counters in Beijing’s Shin Kong Place and Hanguang department stores. According to AmorePacific, Chinese customers account for 67% of Hera’s duty-free sales in Korea. Online, the brand’s UV Mist Cushion recorded more than 160,000 search clicks per year on the China’s major online marketplace Taobao.
“Having created fundamental K-beauty values, Hera created a sophisticated culture around our vision of modern Korean women, namely ‘Seoulista’” said Eunim Lee, senior vice president of Hera division at Amorepacific. “I am convinced that our brand will resonate with Chinese customers. Through innovative products that perfect radiant skin, Hera aims to establish itself as the leading beauty brand in China.”
Elsewhere, the company increased US distribution for Sulwhasoo and Laneige and expanded into Canada. In addition, the AmorePacific brand was launched in Bloomingdale’s. Earlier this year, the company introduced its Aritaum shops in North America. Aritaum, derived from the Korean words beauty and place, feature a large but curated collection of premium Korean beauty products such as Iope, Laneige, Mamonde, Hanyul and Sulwhasoo. By the end of the year, Amore Pacific expects to have nearly 100 Aritaum locations in the US and Canada.
While Americans are grabbing all kinds of “K-beauty” items, the concept hit a snag in the Old World. AmorePacific said 2015 European sales declined due to weak consumer spending, euro depreciation and channel restructuring, according to the company.
The trend continued through Q1, as sales rose more than 23% during by a 45% gain in international markets.