Amorepacific chairman Suh Kyung-bae was on CNBC recently to talk about the company’s history and current expansion plans. Amorepacific owns 27 beauty and skincare brands and is the second largest cosmetics player in Asia after Shiseido. The company’s shares have been held by a number of the funds covered on this website, including the Scottish Oriental Smaller Companies Trust, Petra Capital, Arisaig and Coupland Cardiff.
You can watch the video here. Brief highlights below (any mistakes are my own):
- The company was founded by his father Suh Sung-hwan in 1945. He grew up alongside four sisters and was exposed to / developed an interest in cosmetics products from an early age.
- He took over at Amorepacific in 1997 and has seen revenue grow ~10x under his leadership. Some of that growth has been attributable to the globalisation of Korean popular culture, but the company has also worked hard at product innovation and staying on top of industry trends.
- The Chinese market currently contributes ~20% of Amorepacific’s total sales. They spend a lot of time understanding the preferences and beauty routines of Chinese customers and catering to them. For example, they found that Chinese customers were quite concerned about the dryness of their skin, so they developed a sleeping mask product for them.
- The other trend they see is that because their younger Chinese customers are career-driven and have busy schedules, they are increasingly looking for cosmetics products that are quick, convenient and effective.
- Recent tensions between South Korea and China have had some short-term impact on sales but he doesn’t expect this to be a long-term problem. They remain focused on the brand story and ultimately want Chinese customers to feel as if it’s a local brand.
- They have had to work harder in making their products more appealing to non-Asian customers. Their first foray into France many years ago failed because they tried to sell their brands as-was. Have realised they need to better understand the customer and communicate the brand story to them. They are also focused on aligning with new customer trends in the west – more interest in natural products, the shift to digital etc.