AmorePacific Chairman Suh Kyung-bae is concentrating his focus on expanding the company’s global business territory: making inroads into the ASEAN’s market beyond China, which is raising non-tariff barriers to Korean companies. AmorePacific opened a large shop for its brand “Laneige” on the bustling street Hai Ba Trung in Ho Chi Minh, Vietnam. The shop is almost a replica of the brand’s flagship store in Myeongdong, Seoul, showcasing the company’s best cosmetic products. It is divided into zones including the “Water Bank Zone” for skin care and “BB Cushion Zone” for make-up. The 19th road shop in Vietnam is filled with customers who watch make-up demonstrations and massage services daily.
Chairman Suh, who is working hard on the so-called Next China Project, said, “Southeast Asia and Southwest Asia account for 30 percent of the 30 mega-cities with a population of more than 10 million people.” He went on to say that AmorePacific, which has already set up many outlets in Singapore, Malaysia and Thailand, will redouble efforts to ramp up the company’s brand values, while aggressively trying to explore markets in Vietnam, Indonesia and the Philippines.
To this end, AmorePacific plans to set up an additional shop in Ho Chi Minh and Hanoi this year.
The Vietnamese cosmetics market is estimated at about 250 billion won with an annual growth rate of more than 15 percent. AmorePacific said the outlook of the Vietnamese market is rosy as 70 percent of Vietnam’s 95.26 million people are under the age of 40.
Chairman Suh is stepping on the gas to tap the ASEAN market with the goal of rising to a “Great Company.”
The ASEAN Economic Community, established in 2015, is an economic community involving 10 countries, which have a combined population of 630 million people.
The value of the ASEAN cosmetics market is forecast to surge from 2.4 trillion won in 2014 to 6.2 trillion won in 2020.
AmorePacific runs local operations in Singapore, Malaysia, Thailand, Indonesia, and Vietnam.
The company’s brands, including Sulwhasoo, Laneige, Mamonde, Inispri and Etude, have made a strong showing with each outlet receiving about 40,000 new customers monthly.
AmorePacific exported cosmetics worth about $284.95 million (334.9 trillion won) to ASEAN during the period between July 2015 and June 2016, a 45 percent jump over the same period one year earlier.
The excellent business performance is owed to the company’s localization strategies. Initially, AmorePacific launched Laneige’s water bank line to strengthen moisture for Singapore’s environment, in which the indoor air is dry due to the wider use of air-conditioners and humid weather. The brand’s hit Cushion products have been tweaked to be suitable for caring for skin of local women. The strategies have paid off: the company has seen Cushion sales in the January-September period surge 50 percent over the same period a year earlier.
The company has made Singapore as an R&D hub for the ASEAN region and dispatched R&D manpower to work on meeting the needs of the area. It is also expanding production centers. AmorePacific recently set up a production corporation in Nusajaya, Malaysia with the goal of dedicating a cosmetics plant by 2020. Nusajaya is considered to be a traffic center dealing with East-West trade due to its proximity to major Asian countries.
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AmorePacific’s 3rd generation heir-apparent
AmorePacific has launched a scheme to groom Suh Min-jung, the eldest daughter of Chairman Suh, as an heir apparent to take over the management rights of the nation’s largest cosmetics group.
The junior Suh has entered AmorePacific as a freshman employee as of Jan. 1.
She is a 3rd generation sibling of the late founder Suh Sung-whan. She is a graduate of Cornell University’s Economics Department. Last July, she began a career at Bain & Company.
She owns the second-most shares of AmorePacific, following Chairman Suh.
