Amore expanding presence in US

Customers at AmorePacific’s Laneige brand store check out “Water Bank Essence” in Parkson, a department store in Shanghai, China, in November. / Courtesy of AmorePacific

By Park Ji-won

AmorePacific, the nation’s leading cosmetics maker, is expanding its presence overseas, particularly with its brand Laneige in the United States.

Laneige is the firm’s flagship brand and makes high-end moisturizing products backed by the firm’s significant research and development (R&D) efforts.

AmorePacific has been focusing on expanding Laneige by establishing local subsidiaries in Asian countries. But this expansion to the U.S. is different from its attempts in the past in that it will market its products at premium retailers.

The U.S. expansion for Laneige started in March with the introduction of its products at Target, the second-largest American discount retailer.

As of April 28, Laneige was sold in the premium cosmetics section of some 400 Target stores. AmorePacific plans to increase that figure to some 750 by this year. This expansion is the firm’s largest in a single country, according to its latest data.

The U.S. expansion is a part of the firm’s plan to target to developed countries, where the premium cosmetics markets are already mature.

“The American cosmetics market already has premium categories and has a high growth rate,” said AmorePacific spokeswoman Kweon Sung-hae.

“We expect that our premium brand will succeed in a developed market like the U.S.”

The firm began its U.S. expansion by introducing Laneige BB Cushion, a compact foundation. It plans to increase brand awareness by localizing the products, meaning it will introduce products tailored to the needs and preferences of the U.S. market. It will also increase marketing activities to become a global cosmetic brand.

The move to the U.S. is a step toward AmorePacific’s goal to make more than half of its sales in other countries, as well as to focus more on product quality since last year.

“We aim to sell more than half of our products overseas in the near future. Our products are growing in popularity among Asian customers,” Chairman and CEO Suh Kyung-bae said during the 68th anniversary of the company on Sept. 5.

“If we can continue providing beauty products that our customers want, we expect that the company will reach this goal,” Suh said.

The company has successfully established Laneige as a leading cosmetic brand in Asian countries. AmorePacific first introduced Laneige overseas in Hong Kong in April 2002, starting with a store in Sogo Hong Kong, a department store. Since then, it has expanded to other Asian markets, including China, Singapore, Vietnam, Taiwan, Thailand, Malaysia and Indonesia, in that order. As of March, it runs 862 stores overseas, including shop-in-shops.

The firm conducts R&D for each country in which it operates to make sophisticated cosmetic products tailored to each market. It also tailors its marketing for each country. For example, in Hong Kong, the firm promotes Laneige through Korean celebrities because people in Hong Kong admire Korean women’s clean and natural-looking skin. In Indonesia, it introduced the brand in one of the most expensive department stores to establish the brand as a premium product. According to market insiders, localization can boost the firm’s presence in Asian countries.

Laneige posted some 400 billion won in sales last year, more than half of its entire sales in 2013. The firm expects it will post sales of 500 billion won this year.

The brand posted two-digit increases in sales in its overseas markets. For example, it posted some 44 percent in sales growth in China and 31 percent in sales growth in Hong Kong year-on-year.

Laneige’s Water Sleeping Pack—EX facial cream accounted for more than 70 percent of its overseas sales in 2011, with more than 2 million units sold. Its Water Bank Essence moisturizing essence posted some 62 billion won in sales from 2011 through 2013.