Amore Pacific has become the world’s 7th biggest cosmetics maker thanks chiefly to booming sales in Asia. Amore Pacific is the first Korean cosmetics firm to feature in the top 10 at all, beating even established behemoths Johnson and Johnson, Chanel and Avon, as well as Kao and Guerlain to rise five notches last year.
Perennial leader L’Oral took the top spot, followed by Unilever, Procter Gamble, and Este Lauder. LG Household and Healthcare’s global ranking also rose from 19th in 2015 to 17th last year.
Industry bible Women’s Wear Daily published the global rankings on Monday based on sales. It was only in 2007 that Amore Pacific entered the top 20.
Park Jong-dae, an analyst at Hana Daetoo Securities, said, “The cosmetics industry has been a leading top-end industry dominated by the U.S., Europe and Japan, and if Amore Pacific wants to make further headway it has to succeed not just in China but in the U.S. and Europe as well”.
The rapid growth is due to a successful strategy of focusing on cosmetics that highlight natural skin tones, differentiating itself from rivals who focused on color makeup.
Amore Pacific achieved sales of W6.7 trillion last year and a quarter of that came from overseas (US$1=W1,138). Adding in duty-free shop sales, which accounted for another 25 percent of 2016 revenues, almost half came from non-Korean customers. WWD attributed the success to the steady sales of its top five brands in China, which mostly focus on skincare products.
Now the firm wants to step up marketing in the U.S. and Europe. It plans to expand its product portfolio by making an additional brand available in Europe and in the U.S. in the second half of this year.
“The focus in the European market is shifting from color makeup and perfume to products that promote healthy skin, so our products have a competitive edge there”, a spokesman said.
The company also plans to diversify markets in Southeast Asia to deal with an unofficial Chinese boycott of Korean brands over the stationing of a Terminal High-Altitude Area Defense battery here.
Singapore, Malaysia and Thailand will be used as bridgeheads to expand sales networks into emerging markets like Vietnam, Indonesia and the Philippines. Amore Pacific also set up a Middle Eastern branch in Dubai last year and plans to expand sales with more diversified products there later this year.