Amore Pacific bets big on China

A researcher tests various herbs and grains harvested in Korea as part of efforts to develop new cosmetics products. The company is paying keen attention to Korean ginseng, beans and green tea. / Courtesy of Amore Pacific

A R&D center, plant to open in Shanghai later this month

By Park Si-soo

Sulwhasoo's concentrated ginseng renewing cream

Cushion Craze

LANEIGE's water sleeping pack

YONGIN, Gyeonggi Province — An unexpected smartphone ringtone broke the quiet, serious mood of Thursday morning's presentation by Park Jong-hee, a senior researcher at the main research and development center of Korea's leading cosmetics maker Amore Pacific.

"No, they cannot come in," she said. She was addressing a security guard at the center's main gate, and she spoke decisively. After she hung up, she breathed a sigh of relief.

Park, who guides visitors to the center 40 kilometers south of Seoul, said a group of Chinese travelers had appeared outside the gate without notice asking to look around.

"This is something I've never experienced ever before," she said. "They are thought to be consumers of our products from China. I was told that they came here in the hope of catching a glimpse of the R&D center that developed their favorite cosmetics."

This incident is evidence of Amore Pacific's popularity in China.

Last year, the company became the world's 17th biggest cosmetics company in terms of sales, according to Women's Wear Daily, a U.S. trade publication specializing in fashion. L'Oreal held on to top spot, Unilever ranked second, and Procter & Gamble was third.

The company is aiming for the No. 7 spot, a goal it hopes to achieve on the back of robust sales in China and the rest of the Asia-Pacific region.

In the quarter that ended June 30, the company's sales had grown 21 percent year on year to 966.7 billion won ($926 million) and operating profit had jumped 69 percent to 151.1 billion won. Its stock also reached a record high 2.34 million won last month.

"Brands popular in China are Laneige (a mid-priced line) and Innisfree (a road shop brand). Our high-end line Sulwhasoo is another sales booster, which flies off the shelves at duty-free shops," Park said.

Amore Pacific chairman Suh Kyung-bae recently said the company would customize more products for Chinese consumers. To that end, the company is set to open a 42,000 square meter factory and R&D center in Shanghai later this month.

"We will be able to develop products more customized for Chinese consumers," Suh was quoted as saying in The Wall Street Journal. "By locally producing them, we can also guarantee better quality. We want Chinese consumers to feel comfortable, as if the products are made by a Chinese firm."

The factory is expected to produce an additional 7,500 tons of products, 16 times the company's current production in China.

'Do something nobody has tried'

The Yongin-based R&D center is the biggest among the company's six facilities of this kind — the others are in Shanghai, Paris, Singapore, New York and Tokyo. Built in 1954, the center has more than 400 researchers and developers. They have carried out a variety of experiments under the corporate motto "Asian Beauty Creator."

"We are trying to do something that has never been done by rival companies," Park said. "If we do things the same way, it's impossible for us to outperform our rivals."

She pointed to the development of its "Air Cushion" liquid makeup — a smear-free formula that also includes sun block — as one of the company's biggest achievements, calling it an "innovation."

The company are trying to develop the next "it" item by expanding into Korean ginseng, beans and green tea, she added.

"These are new materials that nobody has looked into seriously," the researcher said. "We expect to see the results in the near future."

She added that developing products with new materials was not always successful, but persistent trial and error would pay off eventually.

She also said customization was one of the big issues in the cosmetics industry.

"To make products perfectly customized for a consumer, the person's skin condition is not the only information we need," she said.

"We should know everything about the consumer, including his or her overall lifestyle, weather conditions and even personality, just to list a few items. Perhaps it's not easy with existing technologies. But it doesn't necessarily mean that it's impossible."

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