Food
AmorePacific, South Korea’s largest cosmetic company, has reaffirmed its commitment to China, seeing further room for growth in the rising middle-class consumers there, the firm said Thursday.
AmorePacific has shown stellar performance in China with a range of luxury and low-end brands, thanks to the rising popularity of Korean drama and pop. It logged 5.66 trillion won (US$4.93 billion) in sales last year, up 20.1 per cent year-on-year.
The Korean multinational owns the cosmetics and retail brands Etude House, Laneige, innisfree, and sulwhasoo, among others.
“By 2020, the middle class population is expected to reach 500 million, and its size and influence will greatly expand in the next decade,” AmorePacific CEO Suh Kyung-bae said during a monthly meeting with senior officials earlier this month.
While Beijing has applied non-tariff barriers, such as those on ingredients and the approval of foreign brands, Suh expects the focus of regulations will move to distribution to curb counterfeit items and the grey market.
“However, the tightened retail regulations will have a limited impact on companies that have already established distribution channels in the Chinese market,” Suh said.
While fledgling cosmetics producers have bloomed over the past years, Suh expects it will take time for them to match the level of its technology and brand power.
“We will have to keep an eye on the growth of emerging local companies, but brand power is not something they can get in a short period of time,” he said.
