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Cosmetics firms eye Middle East, Latin America
The Face Shop outlet in Dubai, the United Arab Emirates / Courtesy of LG Household and Health Care
By Lee Hyo-sik
By Lee Hyo-sik
Amore Pacific and other cosmetics firms here are moving beyond China and Southeast Asia to find new business opportunities in the Middle East, Central Asia and South America, the companies said Tuesday.
Concerned about a China slowdown and the intensifying competition there, Korean cosmetics producers have begun setting their eyes on increasingly wealthy middle-class consumers in other emerging markets where “hallyu,” or the Korean cultural wave, commands a huge fan base.
Amore Pacific, Korea’s largest cosmetics maker, plans to open shops in Dubai and other Middle Eastern cities next year to boost their sales abroad. The company is also considering establishing a presence in Brazil, Mexico, Columbia and other South American cities in 2017.
“We believe that Korean beauty products have huge growth potential in areas beyond China and Southeast Asia,” an Amore Pacific spokeswoman said. “We are planning to open shops in large cities in South America and the Middle East where Korean pop culture is popular among young people. A group of employees have already been dispatched to major emerging markets to study their business potential.”
The Face Shop, a cosmetics shop franchise owned by LG Household and Health Care, has been most active in the Middle East, setting up 46 stores in four countries since 2006.
“We have stores in Jordan, the United Arab Emirates (UAE), Saudi Arabia and Oman, posting $4 million in sales last year,” an LG Household and Health Care spokesman said. “We will make inroads into Kuwait, Bahrain and other Arab nations next year. We are also eyeing North Africa and Turkey.”
The Face Shop has seen its sales soar in the UAE and Saudi Arabia in recent years, saying that its beauty products have become a household item among many middle-class female consumers there.
“We operate 20 shops in Saudi and 19 in the UAE. We think we can open more stores in these two rapidly-expanding consumer markets,” the spokesman said. “Arab women these days are paying more attention to skincare and other beauty products. The UAE and Saudi hold huge growth potential for us.”
In 2014, the Face Shop earned 161 billion won abroad, accounting for 25 percent of its revenue. The company, which opened its first overseas store in Singapore, now runs more than 1,300 stores in 29 countries.
In addition, TonyMoly, a mid-sized Korean cosmetics company, has been aggressive in setting up a presence in foreign markets.
In October, the company opened its first store in Mexico and plans to expand its reach to other Latin American nations.
“We will continue to set up our retail shops across the continent,” a company spokeswoman said. “We will also strengthen our presence in Russia and Central Asian nations.”
TonyMoly runs 30 stores in 10 Russian cities, recording a combined 6 billion won in sales in 2014, up from 1 billion won in 2013.
Nature Republic also opened a store in Almaty, Kazakhstan in September, its first shop in Central Asia. It’s Skin, which will list shares on the local bourse in December, has been running a shop in Ecuador and plans to open more there in 2016.