Lee Hyo-sik is Finance Desk editor at The Korea Times. He manages finance-related stories on macroeconomics, banks, stocks, bonds, crypto etc. He is passionate about covering what's happening in Korea's financial industry and explaining it to both Korean and non-Korean readers. You can reach him at leehs@koreatimes.co.kr. Your insights and feedbacks are always appreciated.
Has AmorePacific grown too quickly?
Surveillance camera footage shows a man in the back seat assault a taxi driver in downtown Seoul on Dec. 6. The man was found to be an employee at AmorePacific, while the woman in the back also works for Korea’s largest cosmetics firm. / Captured image from YTN
By Lee Hyo-sik
Questions raised over sustainable growth as employees fail to catch up
By Lee Hyo-sik
AmorePacific CEO Suh Kyung-bae
AmorePacific, headed by CEO Suh Kyung-bae, has grown too quickly into one of the world’s top cosmetics makers in a short period of time, according to industry watchers, who raise questions over its sustainability.
Unlike automakers, shipbuilders and other local manufacturers hit hard by the prolonged global economic downtown, Korea’s largest cosmetics maker has been booming in recent years on the back of China’s surging demand for made-in-Korean beauty products. Its revenue and operating profits have increased by double-digits.
Amore has soared to be the seventh-largest listed company on the nation’s main KOSPI, ahead of Kia Motors, SK hynix, LG Chem., Hyundai Heavy Industries and many other big name domestic manufacturers. Early this month, CEO Suh was even picked as the 2015 Businessman of the Year by Forbes Asia.
However, in contrast to its explosive growth in size, many Amore executives and employees haven’t caught up and still work as they used to when the company was a mid-sized enterprise several years ago, according to the industry watchers.
They say the cosmetics firm, which brands itself as “Asian Beauty Creator,” should make its workforce more capable of performing rapidly expanding tasks and assume more socially responsible roles. Otherwise, it could free-fall like struggling shipbuilders if Chinese and other Asian consumers cut their spending on its beauty products.
“I meet employees of many large companies for business. When I met AmorePacific workers a little while ago, I just couldn’t believe how they have transformed the company into a global cosmetics firm,” said an official at a major business association, who declined to be named. “They don’t know much about what they do and have no passion for their jobs. Worse, they were very cocky.”
The official said Amore workers seem to be under enormous stress. “Apparently, they have to take on more work than in the past as the company has expanded rapidly. They seem to struggle to do their jobs and I don’t think many of them are up to the task.”
Unless the company upgrades workers’ capabilities, it will face difficulties when the cosmetics market falls into a slump, he said. “A recent incident in which AmorePacific workers assaulted a taxi driver clearly reflects what the company is like. Unless Amore improves its software, it could soon be in trouble.”
On Dec. 6, two AmorePacific employees were caught assaulting a taxi driver by a surveillance camera.
At the time, the taxi was waiting for customers who had made reservations earlier when the two got into the vehicle. The driver asked them to leave but the man, who works at the company’s sales division, hit the driver. Even after the two exited the car, they came back, opened the driver’s door and assaulted the driver again.
The victim was diagnosed with an injury that required medical treatment for two weeks. Police officers are currently investigating the incident.
AmorePacific confirmed the two appearing on the footage are its employees, stressing it will take appropriate disciplinary actions against them when it completes the review of the incident.
“They are indeed our employees. The company will take proper measures against them,” a company official said. “But the incident happened after work and was a private matter concerning two individuals. Their deeds have nothing to do with the company.”
In August, AmorePacific was slapped with a 500 million won fine for abusing its sales subcontractors. The cosmetics maker has often come under criticism for its high-handed approach toward its small business partners and franchise store owners over contract terms and other matters.