Two major Korean retailers, Hyundai Department Store and Shinsegae Group, are moving their competition stage from luxury fashion to premium cosmetics.
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Both companies realise that the luxury fashion market in Korea has become saturated, and that they need a new growth engine.
As of the first half of this year, the sales and operating profit of Hyundai Department Store’s fashion unit, The Handsome, reached US$556.7 million and US$59.2 million, respectively. Shinsegae’s fashion and beauty business, Shinsegae International, reached US$588.2 million in revenue and US$41.2 million in profit.
The companies expect that customers who have purchased their high-priced luxury items in the past will also show interest in their premium cosmetic brands.
Shinsegae International launched its premium cosmetics brand, Poiret, in March and The Handsome opened its first luxury skincare brand, Oera, at Hyundai Department Store in Apgujeong, southern Seoul, in July.
Oera uses top-of-the-line ingredients ― including water from Switzerland ― to produce its beauty items, and their prices range between US$171.51 and US$428.78, which is quite high compared to other local cosmetics brands. In particular, its iconic Signature Prestige Cream, which comes in a 50-milliliter size, costs US$1,029.07.
Poiret’s skincare products prices also vary from US$69.46 to US$617.34, depending on the type of item.
Apart from Poiret, which Shinsegae has been preparing to introduce for the past 10 years, the retail giant has been expanding its cosmetics business by importing popular global brands exclusively in the market or by acquiring them. In 2012, Shinsegae took over a 100 percent stake in Swiss Perfection, which runs Vidi Vici. Now, the retailer operates five in-house private brands and some 20 international brands.
LF started its cosmetics business even earlier, in 2016, when it first introduced the French perfume brand Buly 1803 into Korea. Three years later, the fashion unit of LG Group launched the men’s cosmetics brand Hazzys Men Rule 429 in September 2019, and the vegan beauty brand Athe one month afterwards.
For Samsung, instead of introducing a specific global brand, it launched Label. C, a curated shop of selected cosmetics brands, and imported individual beauty items based on the concept of “naturalism.”
“Cosmetics has already become an important growth engine in the fashion industry. Through continuous investments, the discovery of new brands with a high potential for growth and by fostering our private brands, Shinsegae will establish ourselves both in the local and global beauty markets,” a Shinsegae International representative said.
(Source: The Korea Times)