Leading Korean cosmetics company Amore Pacific underlined its travel retail aspirations last month when it made its first ever appearance at the TFWA World Exhibition in Cannes.
With the support of its managing agent in Asian travel retail, premium brand specialists Jonathan Holland & Associates (JH&A), the company exhibited its Laneige and Sulwhasoo skincare brands.
Speaking to The Moodie Report, Amore Pacific International Travel Retail Division Vice President Joe Park said the Cannes show was a platform for building awareness of Laneige and Sulwhasoo and for establishing Amore Pacific as the number one brand in both Korea’s domestic and duty free markets. The company made its foray into travel retail with the launch of Laneige in 2008 and Sulwhasoo in 2010, leveraging on the brands’ stronghold in their native South Korea – and since then they have been growing from strength to strength.
With Laneige proving to be a major travel retail success thanks to its youthful positioning and affordable pricing, Park is now focusing on the ultra-premium Korean herbal medicine cosmetics line, Sulwhasoo.
“The two concepts are totally different: Laneige is suitable for everyone but Sulwhasoo is for customers who are serious about maintaining the best skin possible,” Park explained. “There are brands that are similar to Laneige but Sulwhasoo is unique – it uses very traditional Asian ingredients. We launched Sulwhasoo three years ago but I think it will take 1-2 more years to show our customers what the brand is all about. Its main ingredient is ginseng, so the smell etc. is very different from that of other skincare products.”
Park sees Procter & Gamble’s SK-II as Sulwhasoo’s biggest rival, and his personal goal for 2012 is to catch up with the powerhouse beauty brand in travel retail.
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With Laneige proving to be a major travel retail success, Amore Pacific International Travel Retail Division Vice President Joe Park (pictured) is now focusing on the ultra-premium Korean herbal medicine cosmetics line, Sulwhasoo |
Sulwhasoo has been a strong performer on the Korean market, especially with the introduction of the First Care Activating Serum in 1997. Since the product’s release, sales (in 2011) have reached a record-breaking 100 billion KRW (US$91.5 million). In addition to performing strongly in the domestic market, First Care Activating Serum has been Sulwhasoo’s best selling product worldwide.
Sulwhasoo began its expansion into the global market in 2004 by launching the brand in Hong Kong, including boutique stores and a Sulwhasoo Spa. In June 2010, Sulwhasoo opened a new location in New York’s luxury department store Bergdorf Goodman. In March 2011, Sulwhasoo opened China’s first boutique in Beijing; today it operates boutiques in upscale department stores in China’s five major cities, including Beijing and Shanghai. This September saw the launch of Sulwhasoo in Singapore, with expansion to follow in the Taiwanese and Thai markets within the year and then to Malaysia, Indonesia, Vietnam and the Philippines by 2015.
With plans for expansion in ASEAN’s domestic markets in place, Amore Pacific is keen to replicate the growth in travel retail – particularly in China. In its 2011 annual report, China* led sales growth in the overseas cosmetics division, making up 58% of sales, up +34% to 190.9 billion KRW (US$174.8 million). Asia* made up 14%, with +20% growth in sales to 47.3 billion KRW (US$43.3 million).
“Our local business in China dates back over ten years and we have now started expanding our travel business there. Our goal is to open airport shops in Beijing and Shanghai – it is the most important market to us,” Park underlined.
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Amore Pacific and Jonathan Holland & Associates with their Asian partners EVA Air (top) and China Duty Free Group (above) at the TFWA World Exhibition in Cannes |
In travel retail Laneige and Sulwhasoo, managed by JH&A, have made strong inroads in Asia.
Jonathan Holland elaborated: “Laneige was first launched in Singapore Changi Airport coinciding with T3’s opening in early 2008. Progressively over the past five years, we have listed the brand throughout Asia with 36 counters in the region’s airports. Its retail sales growth trajectory has been steep and the brand continues to build strong market share in every store where we are located. We shall continuously build on these successes to achieve our ambitious market share targets in the coming years.”
Holland continued: “Sulwhasoo’s initial listing was also in Changi Airport in late 2010. We now have counters in Hong Kong International Airport, Kansai Airport in Japan, Lotte Duty Free in Jakarta Airport, China Duty Free Group’s (CDFG) downtown store in Sanya, Ever Rich’s downtown store in Taipei, as well as a new boutique in King Power Thailand’s downtown duty free store. This is just the beginning for Sulwhasoo. We are exploiting all opportunities and believe the brand is well positioned to expand across the region and eventually, globally.”
Holland also indicated that JH&A is continuously reviewing its approach so as to step up the growth momentum for Laneige and Sulwhasoo in the travel retail sector outside of Korea. An “aggressive business plan featuring dynamic new launches and frontline activities” is in the pipeline for 2013, he told The Moodie Report.
Encouraged by its progress in travel retail, Amore Pacific revealed that it will launch three more cosmetics brands across the channel next year: Mamonde, Innisfree and Etude.
Mamonde, with its emphasis on bright and lively femininity, has been hugely popular in the Korean and Chinese markets, according to Park, with over 600 stores in China. With a price positioning in between Laneige and Sulwhasoo, the brand, which uses naturally-derived ingredients, has seen robust sales growth in 2011 delivered by store expansion and promotions.
Targeted at younger females, Etude holds the philosophy that makeup should be a fun and playful recreation; trendy products and pink-themed stores are part of its branding. Innisfree is a natural skincare brand based on green tea originating in Korea.
Park believes that the three brands have global appeal, and that their competitive duty free prices and introduction of travel retail exclusives underscore their potential in the channel.
Holland added: “Mamonde was launched in three CDFG stores in China a couple of months ago and we have seen rapid growth for the brand within this short period. We intend to launch in five more airports in China next month so as to expand the brand’s reach into new growth markets.”
“As for Innisfree and Etude, the plan is to launch them in Asian airport stores from early 2013 and we expect strong performances from both brands commensurate with their domestic success. JH&A is very excited about these additional Amore Pacific brands and we look forward to building their business in the travel retail sector where the target for Amore Pacific is to be a Top 10 Beauty Company by 2015.”
*Amore Pacific’s 2011 overseas cosmetics sales growth in France was boosted by the acquisition of French luxury perfume brand Annick Goutal last year. The move is expected to strengthen the company’s portfolio of perfume brands and expand its overseas perfume business in Japan and the Middle East. Amore Pacific also owns French perfume brand Lolita Lempicka.
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Amore Pacific is launching three more brands in travel retail: Mamonde, Innisfree and Etude |
