Cosmetics giant Amorepacific explores new opportunities in China
Amorepacific, a South Korean cosmetics giant, has been actively exploring the Chinese market for 32 years, in line with the growing pace of cooperation between China and South Korea. By introducing a series of "beauty codes," the company has been influencing the beauty habits of Chinese consumers.
Over the past three decades, Amorepacific has gained invaluable insights into the Chinese market, continuously breaking its "comfort zone" by charting a distinctive development path in China and fulfilling its commitment to "We Make A MORE Beautiful World" with a series of innovative products and strategic adjustments. Recently, its new brand AP Beauty was introduced to the Chinese mainland for the first time, generating significant interest in the market.
Leading the way: deeper roots in the Chinese market
Amorepacific's growth in China has included a number of pioneering developments. In 1992, with the establishment of diplomatic relations between China and South Korea, Amorepacific became one of the first Korean companies to enter the Chinese market.
The following year, it established a joint venture in Shenyang, Northeast China's Liaoning Province, and commenced sales of premium moisturizing skincare products, a pioneering move at the time to sell high-end products in non-first-tier cities in China. While the best-selling cosmetic products in northeastern Chinese cities were priced at around 20 yuan ($2.80) per unit, Amorepacific launched high-quality products priced at over 120 yuan per unit and achieved break-even sales in less than six months.
The strategic location and the high-end nature of its products enabled Amorepacific to establish a strong presence with its first station in the Chinese mainland, laying a groundwork for a comprehensive market layout in China and the establishment of a high-quality professional cosmetics brand image.
In 2000, Amorepacific stepped foot into Shanghai with the Laneige brand, making the city its second stop on its journey to approach Chinese mainland consumers. Two years later, Amore Beauty Park Shanghai held its grand opening and later developed into a comprehensive industrial park encompassing production, R&D and logistics. The same year, Laneige launched an innovative sleeping mask combining both mask and skincare effects, making it stand out from the hydrating products on the market.
In less than two years, Laneige was introduced to over 50 department stores, where it firmly seized the sales channels of mid-range and high-end department stores in China's first-, second- and third-tier cities. This also provided a solid foundation for Amorepacific's other brands such as Sulwhasoo, Innisfree and Mamonde to continue expanding their market share in China.
To reinforce its position in the Chinese market, Amorepacific also became one of the first cosmetics companies to establish global partnerships with Chinese e-commerce platforms. In 2019, Amorepacific formed a partnership with Alibaba to incubate new products, explore new retail strategies, and manage consumer insights, further enhancing the group's potential in the Chinese beauty market.
"Without a genuine understanding of Chinese consumers and the ability to foster meaningful relationships with them, it is challenging to make any significant progress. The most effective way to succeed in the Chinese market is to develop products that meet the needs of Chinese consumers," says the book 70-year History of Amorepacific.
It is this understanding of consumer needs that has helped Amorepacific achieve significant growth in China.
Revitalizing through tech: innovation as cornerstone
Currently, "technological skincare" has become a hot trend in China's beauty market, with consumers increasingly focused on the scientific attributes of such products. The newly released "2024 China Skincare Consumption Trend Report" shows that over 90 percent of consumers think that "whether or not the ingredients of the skincare products are safe and scientifically-proven" is of paramount importance, and more than 70 percent of consumers emphasize that they place significant weight on the "scientific evidence supporting the efficacy of skincare products" when making purchasing decisions. This has led to an increased demand for products that are scientifically proven to be effective.
Amorepacific has been dedicated to scientific and technological innovation for over seven decades, which has made it a leader in the industry in multiple aspects. It is the first cosmetics company to establish a cosmetics research laboratory in South Korea. It is also the first to introduce active concentrate, sleep masks and air cushion BB cream to the market.
In July, Amorepacific brought its luxury technology skincare brand AP Beauty to China, opening its first shop in Jiuguang Department Store in downtown Shanghai. AP Beauty's main collection comprises cutting-edge professional beauty technologies and the company's self-developed and patented ingredients. This provides comprehensive skincare solutions for consumers, addressing both the repair and maintenance needs before, during and after a professional beauty treatment, as well as the diverse and advanced skincare requirements for daily anti-aging and firming.
In addition to introducing new brands into China, other Amorepacific brands have also been active in the beauty market in recent years, introducing new images and positioning.
Sulwhasoo has set itself a new mission of "Building a world of beauty powered by art and heritage," realizing an all-dementional upgrade in the brand image. Laneige has also initiated a process of brand enhancement, shifting its positioning from "basic moisturizing" to "high-efficacy skincare" by launching the high-efficacy anti-aging essence "LANEIGE PERFECT RENEW 3X SIGNATURE SERUM" and twin products targeting dullness and yellowish skin "LANEIGE PEPTA-COLLAGEN SLEEPING MASK" and "LANEIGE SKIN VEIL BASE No.40."
Innisfree has identified a new opportunity to capitalize on the growing demand for natural skincare products with high efficacy. Mamonde will introduce a new brand image to China and launch a product line that better meets the skincare needs of China's young consumers. Ryo, the hair treatment brand, has launched shampoos with aroma perfumes to further expand into the high demand scented personal care segment.
Additionally, Amorepacific's brands have opened flagship shops on platforms such as Douyin to develop online channels and better communicate with consumers. The company has embarked on a new development path characterized by enhanced R&D capabilities, revitalized core brands and strengthened brand value.
Building on the past, growing for the future
In April, Amorepacific China welcomed Taeho Park as its new president. "Amorepacific will adhere to its 'Customers first' concept, continue to improve the sustainability of its products, respond accurately to Chinese consumer needs and enhance the product experience. It will remain committed to its sustainable development strategy and goals, moving forward together with customers and society, and coexisting responsibly with nature," Park said.
A few months ago, the Amorepacific (Shanghai) D&I Center launched the "Young Scientist Committee" initiative, which brings together think tanks in different fields with the goal of further expanding the dialogue with Chinese consumers in order to quickly respond to their ever-changing needs in the context of consumer upgrading. In June, Amorepacific China released its ninth consecutive "Sustainability Report," which outlined its efforts in continuing to unleash the positive energy contained in sustainable beauty, enhancing the environmentally friendly nature of its products, and engaging consumers in discussions about the future of green beauty.
It is foreseeable that, following the latest round of strategic adjustments, Amorepacific will see new opportunities for its beauty business growth in the Chinese market. In the long term, China's beauty market will provide substantial growth opportunities for the entire industry as a whole, and Amorepacific's continued commitment will be a crucial factor in driving innovation and development in this market.