Korean beauty brand Missha recently announced the closure of its Hong Kong outlets. However, its rival Amore Pacific—the largest beauty and cosmetics group in South Korea, has just strengthened its foothold here.
Amore Pacific launched its flagship brand — Amore Pacific – in Hong Kong last November. It also opened nine new outlets in prime districts such as Tsim Sha Tsui and Central. The stores include two Laneige and five Sulwhasoo shops.
Soaring sales have supported the company’s aggressive expansion. Amore Pacific Hong Kong’s revenue climbed 50 percent in the first half of 2014 when compared to the same period a year ago. The group’s business in the Asia Pacific region as a whole is also expanding.
Now, why the big difference in the fortunes of Missha and Amore Pacific?
Well, a main factor behind the success of Amore Pacific is its diverse brands and clear market positioning.
Amore Pacific offers a full range of products, from affordable lines (Etude House & Innisfree) to high-end brands (Sulwhasoo & Amore Pacific).
Customers can spend HK$117 (US$15 ) and pick up a bottle of Innisfree green tea moisture cream (50ml), or they can choose a box of Amore Pacific’s skin renewal cream (50ml) which costs HK$3,280.
Thus, the company caters to shoppers from different segments.
Also, each brand name has a clear position. For example, Laneige is pitching its hydrating power, Sulwhasoo is marketed as skin care products with ginseng essence, while the Amore Pacific line is touting the outcome of intensive scientific research.
Amore Pacific, meanwhile, also makes good use of the popularity of Korean drama and music to help boost its sales in Hong Kong, mainland China and other parts of Asia. All cosmetic products that Korean actress Jun Ji-hyun used in the drama “You who came from the star” have been sponsored by Amore Pacific.
Fion Ipp, managing director of Amore Pacific Hong Kong, has said that although the beauty and cosmetics market in Hong Kong is not big, it is still the bridgehead of the region. Hong Kong plays an important role in showcasing the brand in Asia and even other parts of the world.
The company plans to grow its international sales to around half of its total by 2020, and most of the revenue is expected to come from China.
At the moment, the market share of Amore Pacific is only 1.2 percent in China, compared with Procter & Gamble’s 13.5 percent and L’Oreal’s 9.1 percent, according to market researcher Euromonitor International.
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