AmorePacific eyes Middle East, Latin American market
Chairman undaunted by China’s economic downturn
By Park Si-soo
OSAN, Gyeonggi Province ― AmorePacific Chairman Suh Kyung-bae said Wednesday that the nation’s biggest cosmetics company will make greater inroads into the Middle East and Latin America.
With its global expansion strategy focused on megacities, Suh pledged to expand its sales at home and abroad to 12 trillion won ($10.9 billion) by 2020 from 4.71 trillion won last year.
Suh said the company sees huge growth potential in China despite an economic slowdown there. The Seoul-based firm saw nearly half of its overseas sales in China last year.
“The demand for high-quality cosmetics products is rising in the Middle East,” Suh told reporters during a ceremony for the company’s 70th foundation anniversary at its main plant here. “Unlike in the past when people there would shy away from doing makeup, these days there are a lot of people interested in self-beautification.”
He said AmorePacific will establish its first business foothold in the Middle East in Dubai next year and then expand into surrounding nations such as Saudi Arabia, Turkey and Iran.
Suh also expressed his commitment to entering Latin America, especially Brazil and Mexico.
“The urbanization and expanding mid-income bracket will give us an opportunity for expansion into the region,” he said. “In addition, Korean cosmetics brands enjoy a good reputation.”
He said AmorePacific will make inroads into the Latin American market with its five major brands ― Sulwhasoo, Laneige, Mamonde, Etude and Innisfree.
The chairman said his company is undaunted by the economic slowdown of China, the company’s biggest overseas market.
“Many people worry about China’s dismal economic situation. But I have a different point of view,” he said. “My positive outlook is based on an increasing number of cosmetics users in China and expanding mid-income earners who are interested in taking care of their looks.”
He said an estimated 150 million people use cosmetics in China and the number will jump to 200 million in the near future.
“I expect an estimated 500 million people will use beauty and skincare products in China in the long run,” he said. “Given this, the Chinese cosmetics market will continue to expand despite the economic slowdown.”
Suh said the company is intensifying research and studies on Chinese consumers to develop products that better fit their tastes.
The chairman didn’t rule out the possibility of doing business in North Korea. He said there was no concrete plan in his mind or in the making, but he said North Korea should be a market the company will enter someday.
Exporting of luxury goods, including cosmetics, to the North has been banned since 2006 by U.N. sanctions. Nevertheless, South Korean beauty products, including AmorePacific’s, are known to have been smuggled into the reclusive nation via China.