SEOUL, Apr. 26 (Korea Bizwire) — South Korean cosmetics makers said Thursday they are making inroads into new markets as part of their efforts to diversify sources of income after being hit hard by China over a missile row last year.
LG Household & Healthcare, a major South Korean cosmetics and household goods maker, said its skin care brand belif has recently entered 17 European countries via French cosmetics chain Sephora.
“It is a significant step forward which shows that belif’s competitiveness has been acknowledged in Europe, the home of cosmetics,” a company official said. “It symbolizes the brand’s expansion into the global market.”
The announcement came two days after LG Household & Healthcare said its affiliate will purchase Japanese cosmetics firm Avon Products Co. for 10.5 billion yen (US$97.6 million) in its latest move to strengthen its foothold in Japan.
According to market researcher Euromonitor International, Japan is the third-largest beauty and personal care market in the world as of last year, with an estimated market size of $36.1 billion. The figure is expected to reach $38.5 billion in 2022.
“Korean (cosmetic firms’) expansion is gradually starting to show momentum with brands such as Amorepacific’s skin care brand Inisfree entering the Japan market and launching its first store in early 2018,” Sachi Kimura, an analyst at Euromonitor International, said.
Previously, Korean cosmetics had not shown significant growth in the neighboring country given the availability of products sold by local manufacturers, Kimura added.
LG Household & Healthcare’s acquisition is in line with local retailers’ broader moves to diversify their overseas business portfolios, which had been heavily reliant on Chinese customers.
Korean manufacturers and retailers suffered a plunge in revenues after China banned sales of Korea-bound group tours in March last year in retaliation over Seoul’s decision to deploy a U.S. missile defense system.