AmorePacific plans 350 new China stores
The Korean parent of skincare brands including Laneige, Sulwhasoo and Etude, plans to open at least 300 new stores in China this year.
AmorePacific expects a 30 per cent increase in sales in 2015, fuelled by a 15 per cent expansion in its existing China store network now numbering 2335.
Despite intense competition from local Chinese brands and American multinationals like Procter & Gamble and L’oreal, AmorePacific is thriving in China, largely due to the sales success of its Laneige and Sulwhasoo brands, each of which have their own store networks. The company is South Korea’s largest manufacturer of cosmetics, specialising in facial creams and ginseng extracts. It also owns the Etude and Mamonde brands, which have retail store networks across Southeast Asia.
Besides expanding its store network – 15 per cent of 2335 equates to around 350 stores – the company plans to increase its presence in Chinese online stores.
A key factor in the brands’ China popularity is the increasing trend amongst young Asian women to emulate Korean popstars and actresses.
In an interview with Bloomberg Business, Suh Kyung Bae, AmorePacific’s chairman, said the company recognised the importance of Asia’s rising middle class 15 years ago and this remains a key business driver.
Despite the size of its retail network, and sales growth, AmorePacific still holds just 2.1 per cent of China’s total skincare market, according to data from Euromonitor International.
The company said its 2014 sales grew 21 per cent to US$4.3 billion, with China now its largest market outside South Korea. While accounting for 8.6 per cent of group sales in 2013, analysts project it could represent 30 per cent by 2020.
The company is also targeting substantial growth across Southeast Asia where fascination with Korean culture, music, drama and fashion is burgeoning.