AmorePacific suffered a setback recently as the company was buffeted by China’s retaliatory steps against the installation of the U.S. Terminal High Altitude Area Defense (THAAD) system in Korea. Influenced by China’s retaliatory steps, AmorePacific saw its operating profit plunge nearly 60 percent in the second quarter of this year over the same period of last year.
AmorePacific Chairman Suh Kyung-bae convened a meeting of executives to discuss the sagging business performance in the 2nd quarter of the year and suggested three options to cope with the underperformance. The keywords for them are trends, online and off-line connections, and big data.
Chairman Suh selected “innovative products,” AmorePacific strengths, as core strategies. He stressed innovative products as trend-setters. He emphasized that the company’s role and functions are to provide the products and services customers want. He was apparently referring to such trends as youth customers’ consumption behaviors like the posting of photos on social network services, quality products with reasonable prices, and the favoring of simple skin care.
Chairman Suh’s next keywords are on- and offline commerce, or O2O. He has called for the understanding and utilization of the concept. He noted AmorePacific achieved innovative changes in door-to-door sales in the 1990s. “Of late, we have to ponder what kinds of experiences we offer as customers’ expectations have changed frequently of late,” he said. Suh, stressing the connecting of online and offline customer experiences, called for new marketing strategies to synergize its online and offline operations.
Chairman Suh’s third focus is on big data. “Companies which cannot secure customer data will be the poorest one down the road,” he said. Chairman Suh stressed the significance of data in marketing. Chairman Suh also stressed the need for more investments in manpower to put these strategies into practice. He stressed the need for nurturing leaders and experts to tide over a crisis.
AmorePacific plans to diversify markets to recoup a slump in the Chinese market in a short-term perspective. In September, AmorePacific will set up an exclusive Sulhwasoo outlet at the Galeries Lafayette in Paris. In the second half, the company plans to open an “Etude” outlet in Dubai and an “innisfree” outlet in New York.
This photo shows Laneige’s mobile application app “Beauty Mirror” in which virtual make-up can be demonstrated via mobile camera mobile application app “Beauty Mirror” in which virtual make-up can be demonstrated via mobile camera.
Pursues Beauty Innovation in Era of 4th Industrial Revolution
In his New Year’s message, AmorePacific Chairman Suh Kyung-bae said his company should be up to the challenge for innovation in the digital and mobile areas.
“A ‘New Real Era’ with a combination of the real world and virtual world or another new world will open up,” he said.
Following Chairman Suh’s directive, AmorePacific has accelerated efforts to pursue digital transformation. These efforts have paid off. AmorePacific’s official online shopping mall “APMall” is a platform that is at the front line of its digital transformation.
Thanks to the strengthening of customer differentiation services via IT technologies, APMall has achieved explosive growth, with an 88 percent jump in sales in the first quarter of this year over the same period last year.
AmorePacific is preparing for the development of core technologies to cope with the advent of the 4th Industrial Revolution. In 2016, AmorePacific introduced a “digital innovation lab” to establish a roadmap to employ promising new technologies, including IoT, AR and VR, in the beauty industry.
For instance, Laneige has developed and operated the mobile application app “Beauty Mirror” in which virtual make-up can be demonstrated via mobile camera. The app for demonstrating make-up ranging from base to coloring is the first time “mirroring technology” has been employed in Korea.