By Lee Gyu-sun

Genic is a cosmetics manufacturer set up in 2001 and famous for the “Ha Yoo-mi mask pack” ― a hot seller on the home shopping television shows.

In the domestic cosmetics industry which divides into large corporations and those that manufacture to other companies’ order, Genic is growing fast with its own brand based on the “hydro-gel” technology and sales platform on the home shopping channels.

The hydro-gel facial mask ― a water-soluble product that improved the adhesive strength of existing masks ― is leading the domestic market, sold at a higher price than those of conventional ones.

Thanks to the outstanding technology, patents and direct sales channel, Genic’s revenue grew from 13.7 billion won in 2008 to 81.9 billion won last year.

The firm is expected to post a high growth this year as well. The revenue and operating profit in 2011 are forecast to increase to 118.7 billion won ― up 44.9 percent from a year earlier ― and 17.6 billion won ― up 44.2 percent ― respectively.

Due to the popularity, Genic has secured prime time slots of home shopping channels ― it supplies to all four major channels ― and the product gets sold in large volumes in each show.

In order to digest flooding orders, the firm has been building on a new plant, which is expected to be completed in November and to achieve about 80 percent of the full capacity of the main manufacturing facility.

The completion of the new factory in the fourth quarter will solve the problem of the shortage in supply, so the firm is expected to continue its high growth in 2012.

Overseas expansion

Although Genic is a just a medium-size company, it is independently exploring new markets while recording high profits on sales with its own technology, brand and manufacturing facilities.

Genic is seriously seeking to branch out to Japan, the U.S., Europe and Southeast Asian countries, which may result in growth in overseas markets next year.

The biggest and most successful overseas market is likely to be China. Once the blue print for the expansion to China has been established, the firm could expect a new growth engine there. It may even surpass the current earnings forecast, so investors should keep their eyes on the plan.

The cosmetics maker is mulling various ways to enter overseas markets. In Japan, it plans to sell products on home shopping channels while it has signed supplying contracts in Europe, North America as well as Southeast Asian countries, including Thailand and Singapore.

Genic is reviewing two approaches in penetrating the Chinese market. Firstly, it could sell via Dong Bang CJ, a major home shopping channel operator CJ O Shopping’s Chinese unit. Secondly, the company could produce and sell products in China by setting up its own local manufacturing facility.

The second plan is more likely to be carried out, considering the nature of China’s cosmetics market ― the complex process of registering foreign-made products and the resulting time consumption.

Genic is proactively evaluating options of setting up a manufacturing facility on its own or establishing a joint venture with a Chinese company. Once the business kicks off, the growth in China may surpass that in Korea because of the product’s competitiveness. It will be a matter of time when Genic enters the Chinese market.

Lee Gyu-sun is a leader at the small cap team at Daewoo Securities.