Managing Asia

Managing Asia

South Korean beauty brand Amorepacific looks to global expansion

How Amorepacific broke into China
How Amorepacific broke into China

From popularizing "cushion foundations" to making snail slime an "It" ingredient in skincare, South Korean beauty trends have played a massive role in shaping the beauty industry in Asia in recent years.

One of the companies responsible for taking those beauty innovations beyond South Korea's borders is Amorepacific, which counts brands such as Sulwhasoo, Laneige, Innisfree and Etude House among its portfolio.

Suh Kyung-Bae, the company's chairman and CEO, now has his sights set on global expansion.

"Our company is operating in the Korean market, the Chinese market and the ASEAN market. The U.S. market will be our fourth pillar for our business, so we are very much committed to developing the U.S. market," Suh told CNBC's "Managing Asia."

A customer tries out lipsticks in an Etude House store in Myeongdong, Seoul, South Korea. Etude House is just one of the beauty brands in Amorepacific's portfolio.
SeongJoon Cho | Bloomberg | Getty Images

China was one of the markets Suh spearheaded the push into. The world's second largest economy is currently a major market for Amorepacific, amounting for around 20 percent of the company's sales.

Part of the secret of breaking into the lucrative market involved paying attention to the tastes of Chinese consumers.

"The Chinese customers are quite concerned about the dryness of their skin, so we developed a sleeping mask for these customers. We studied which color tones, shades and beauty routines most interest them," Suh explained.

"In China, there are many dynamic young people who are busy trying to build a career for themselves, so their main concern was how to effectively put on cosmetics in the most convenient way, in the shortest period of time."

An employee stocks shelves in an Amorepacific Innisfree brand store in Causeway Bay, Hong Kong.
Brent Lewin | Bloomberg | Getty Images

International exposure, however, also brought with it potential downside risks. Shares of Amorepacific fell, among other South Korean retail players, when tensions between China and South Korea ramped up over the implementation of the THAAD anti-missile system earlier this year.

Sales of Korean retailers on the mainland were also affected when Chinese consumers boycotted their stores in protest of THAAD. "In the short term, I think there (was) some impact," Suh said, referring to sales at the company.

Across the Pacific, Amorepacific is focusing on targeting millennials consumers in the U.S. market, even as Suh acknowledged that it was "one of the toughest markets" worldwide. The company has launched its Innisfree brand stateside in response to the interest in natural products among millennials.

The company is not shying away from Europe either, even though its first foray into France failed. Amorepacific has plans to re-enter the market in the second half of the year.

"The huge lesson we learnt (after failing in France the first time) was whenever we go into a new country, we need to first understand what our customers like and how best to communicate the brand story," Suh said.

South Korean pop culture evolves
South Korean pop culture evolves

With hallyu (the Korean wave) having generated more interest in everything from South Korean culture to Korean-made consumer goods, Amorepacific has benefited from the increased soft power the country wields. Consumers all the way in France are interested in Asian beauty brands, Suh added.

Still, while Suh acknowledged that the popularity of Korean popular culture has been a boon for Amorepacific, he said that creating value for the company's customers remained key.

"What's more important is how we we can develop the brands so that we can offer great products and experiences to our customers."