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Tag: Korea

  • South Korean Amore Pacific’s profit suffers from extended domestic slump

    South Korean Amore Pacific’s profit suffers from extended domestic slump

    Amore Pacific‘s first-quarter net profit shrank 15 percent from a year earlier, due largely to a protracted slump in the domestic market amid a rapid drop in Chinese tourists.

    Its net income came to 223.5 billion won (US$197.1 million) in the January-March period, compared with 262.9 billion won the previous year. The operating profit for January-March also slipped 6.2 percent on-year to 316.8 billion won, but sales gained 5.7 percent to 1.56 trillion won in the cited period from a year earlier.

    The company cited a drawn-out slump in its domestic sales, along with a decrease in inbound tourist inflow from China, which followed the ban on trip sales to South Korea by its authorities from mid-March as the main factors that weigh on the profit amid a slow economy. An increase in sales in other foreign markets, however, helped cushion a fall in sales stemming from Chinese consumers.

    South Korea has seen its tally on Chinese tourists plunge by nearly 40 percent since March 15, when travel agencies in China stopped selling tours to Korea on the behest of its government. Such a move by Beijing is seen as part of a string of apparent retaliatory measures against Seoul for the decision to station a U.S. anti-missile system, known as THAAD, on its soil.

    Its operating income from domestic sales, which include the revenue from duty-free stores, dropped 13 percent on-year to 234 billion won as of end-March. Market analysts predicted earlier that AmorePacific may suffer a blow from its mainstay duty-free sales as a result of China’s trip ban. Chinese tourists accounted for half of the foreigners who came into the country last year.

    In contrast, its overseas business posted an operating income of 88 billion won in the first quarter, up 11 percent from a year earlier, with the sales advancing 17 percent to 447 billion won over the cited period. AmorePacific will strive to improve the profitability by realigning the brand portfolio and sales channels in different markets, citing its European unit that logged a 7-percent on-year growth after it bolstered its fragrance lineup, drawing a contrast to the U.S. business which suffered a 16-percent decline in sales.

    The combined operating income of AmorePacific Group, which includes its smaller brands like Innisfree, Etude and other household products, reached 378.5 billion won in the first quarter, down 9.7 percent from a year ago. The sales on a consolidated basis also dropped 5.5 percent on-year to 1.75 trillion won.

  • Lotte refashions outlet to target families and kids

    Lotte refashions outlet to target families and kids

    The renovated branch of Lotte Premium Outlets in this suburban city about 30 miles south of Seoul looks more like an amusement park than a shopping mall for bargain hunting.

    At its Incheon outlet location, Lotte has opened a three-story complex catering to families with children. There are cafes with ball pits and slides, job experience zones where kids can pretend to be doctors and firefighters, and a large Toys ”R” Us store that anchors it all. The Incheon branch is not just for shopping but also for outdoor activities for families.

    Since opening the location in 2013, Lotte found that 75 percent of visitors were in their 30s and 40s. That’s 6 percentage points higher than the share of people who visit other outlet branches outside Seoul. The company figured that more shops and facilities for family visitors, especially kids, be better for customers.

    Another factor was the growing popularity of children’s products in Korea. Between 2012 and 2016, the industry’s revenue expanded from 27 trillion won (US$24 billion) to 39 trillion won. A good portion of the outlet’s new building is dedicated to play. On the third floor, a job experience zone lets kids experience diverse occupations, from veterinarian to firefighter and even urban planner. There is a fee – 22,000 won for kids between 5 and 13 and an extra 4,000 won for an accompanying adult – but there is no limit on time.

    In another play space, called Doctor Balance, children can test their physical strength, including muscle endurance and responsiveness, on playground sets that resemble gym equipment. Next to the job experience zone is a Toys “R” Us. Lotte is the Korean operator of the U.S.-based toy store, but so far, it’s only installed stores in its supermarket chain Lotte Mart.

    The location in the Incheon outlet is the first time Lotte is running a Toys “R” Us outside the mart. An outlet spokesman said the toy store will have about 6,000 products. The building’s second floor has more shopping areas, but even they’re dedicated to kids. Outdoor brands Nepa and Blackyak, for instance, are selling swimsuits and backpacks for children. Out of 47 brands in the new space, 32 are specifically kids’ brands.

    There’s something for the parents, too. Various fast fashion brands, including Uniqlo and Topten, have set up shop, and automaker BMW has opened one of its Motorrad cafes where car aficionados can enjoy coffee while browsing BMW-themed apparel.

    Lotte Premium Outlets’ Incheon location holds the title of biggest outlet in Asia with a floor space of 53,000 square meters (570,000 square feet). An average 15,000 people visit daily, and it has generated 1.2 trillion won in revenue since opening. The company expects the new Fashion & Kids Mall building to boost the number of visitors by 20 percent.

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  • South Korea’s Kia invests in Indian factory after China troubles hit profit

    South Korea’s Kia invests in Indian factory after China troubles hit profit

    South Korean carmaker Kia Motors Corp signed a deal on Thursday to invest about $1.1 billion to build its first factory in India, aiming to tap a fast growing market at a time when its China sales are sagging.

    The Hyundai Motor Co affiliate posted a 19 percent slump in first-quarter net profit as anti-Korean sentiment and a conflict with dealers hit its China sales, sending its shares down 2.2 percent in a flat market.

    Production at the factory in Anantapur district, Andhra Pradesh state, would begin in the second half of 2019, the company said.

    Kia is expected to leverage Hyundai’s supply chain network built around its factories in the neighboring state of Tamil Nadu to gain a foothold in the Indian market, tipped to become the world’s third-largest by 2020. Hyundai is India’s No.2 automaker by sales.

    The plant, which will have production capacity of 300,000 vehicles a year, will produce a compact sedan and a sport utility vehicle tailored for the Indian market, Kia said in a statement.

    It will break ground in the fourth quarter of this year.

    “Our new India plant will enable us to sell cars in the world’s fifth-largest market, while providing greater flexibility for our global business,” Kia Motors President Park Han-woo said in a statement.

    Reuters reported in February that Kia was close to finalizing Andhra Pradesh as the site for its first Indian factory..

    The announcement came after Kia and Hyundai Motor suffered a March sales slump in China, their biggest market, and sharply cut production in the wake of Seoul’s decision to deploy a U.S. anti-missile system, which angered China.

    “The fall in consumer sentiment in China is stemming from a political issue, a situation which is beyond the control of an individual firm and is difficult to be resolved within the short term,” Han Chun-soo, Kia’s chief financial officer, said during an earnings conference call.

    Kia would adjust its China production to reduce inventories, cut costs and launch new models including a small crossover to minimize the impact of the political row, he said.

    Kia also said its first-quarter profit was hurt by a cost of 160 billion won ($141.53 million) to recall vehicles over an engine issue in North America and South Korea.

  • Korean banks expand in Vietnam

    Korean banks expand in Vietnam

    Following Shinhan Vietnam’s successful acquisition of ANZ Vietnam’s retail business, fellow Korean banks have also expanded their sizes and market share in Vietnam, seizing the lead in the foreign bank race on the Vietnamese market.

    Shinhan getting stronger

    Shinhan’s takeover of ANZ Vietnam’s retail arm has made its competitors worry, as Shinhan seems to get closer to becoming the champion of foreign banks in Vietnam, especially as the growth rate of the current leader HSBC Vietnam has been wildly fluctuating over the last five years.

    Despite a relatively low chartered capital of only VND4.547 trillion (US$200 million) and being less active than HSBC Vietnam—the number one foreign bank in Vietnam in terms of chartered capital, total assets, and profit, in 2016 Shinhan Vietnam’s profit exceeded VND1 trillion (US$44 million).

    This amount far outstripped numerous, similar-sized domestic banks and all foreign banks in Vietnam. Shinhan Vietnam’s profit was lower than HSBC Vietnam’s only.

    According to the acquisition agreement with ANZ, Shinhan Vietnam will have eight ANZ’s branches and transaction offices in Hanoi and Ho Chi Minh City, carrying on the entirety of the ANZ retail banking staff and 125,000 individual clients in Vietnam, as well as AUD1.1 billion (US$824 million) in outstanding loans and deposits.

    With 20 years of experience on the Vietnamese market and the takeover of ANZ’s retail business, Shinhan Vietnam’s position is getting steadier.

    At present, Shinhan Vietnam has a large number of corporate clients, primarily made up of Korean investors in Vietnam.

    Before the agreement with ANZ, Shinhan Vietnam had been continuously expanding its network. At the middle of April 2017, the State Bank of Vietnam permitted it to open a representative office and four branches and transaction offices in Hanoi and Ho Chi Minh City.

    Korean banks make foray into Vietnam

    Following Shinhan Bank, many other Korean banks are increasing their influence in the Vietnamese market. This expansion is easy to understand, as Korea is the biggest foreign investor in Vietnam.

    Currently, two of the eight 100% foreign-owned banks in Vietnam are from Korea (Shinhan and Woori Bank). Besides, many big Korean banks are starting to join the Vietnamese market by establishing branches or representative offices.

    These include Kexim, KEB Hana, Industrial Bank of Korea, Kookmin, Busan, and Nonghyup.

    In terms of size and market share, Shinhan and Woori Bank are in the lead among all foreign banks in Vietnam. They are formidable competition even to well-established Vietnamese banks.

    By providing good services and competitive interest rates, Korean banks are luring away a large number of clients from domestic banks.

    For instance, in Shinhan Vietnam, the outstanding loan balance of Vietnamese corporate clients accounts for at least 50% of its total corporate credit.

    In addition, Shinhan’s interest rates for home loans, car loans and consumer loans are lower than in many domestic banks. This has attracted a huge number of individual clients, especially from the middle and high income bracket.

    Besides Shinhan, newbie Woori also plans to deploy plenty of retail products in Vietnam in the course of 2017, such as cards, unsecured loans, and mortgages.

    Abundant capital, modern technology inherited from parent banks, knowledge of the Vietnamese market, and the huge number of corporate clients make up the rare advantages for Korean banks to successfully join the Vietnamese retail market, likely making domestic and other foreign banks worry.

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  • Korea’s economic growth accelerates in Q1: BOK

    Korea’s economic growth accelerates in Q1: BOK

    South Korea’s economy grew at a faster pace in the first quarter than three months earlier due to increased construction investment and exports, central bank data showed Thursday.

    In the January-March period, the country’s gross domestic product increased 0.9 percent from the previous quarter, improving from a 0.5 percent on-quarter expansion three months earlier, according to preliminary data from the Bank of Korea.

    The on-quarter growth is the fastest since the second quarter of last year.

    The data also showed the services sector expanded 0.1 percent from the previous quarter, compared with a 0.2 percent on-quarter expansion three months earlier.
    The central bank data showed construction investment grew 5.3 percent in the first quarter from the previous quarter, and facility investments rose 4.3 percent on-quarter in the first quarter.

    Chung Kyu-il, director general of the Economic Statistics Department at the BOK, blamed the slower growth in the services sector on a decline in the number of Chinese tourists, poor consumer sentiment and people putting off buying smartphones ahead of the release of Samsung Electronics Co.’s Galaxy S8.

    Samsung started official sales of the Galaxy S8 and the Galaxy S8 Plus smartphones in South Korea last Friday.

    The service sector includes wholesale and retail trade, restaurants, and hotels.

    Local tourism-related businesses have taken the brunt of China’s ban on trip sales to South Korea in an apparent retaliation against Seoul over a US missile defense system.

    Seoul and Washington began to deploy the US missile shield in South Korea to counter North Korea’s evolving nuclear and missile threats.

    Still, China has repeatedly pressed South Korea and the US to cancel the deployment and withdraw the missile defense system, claiming the US missile defense system could hurt China’s security interests.

    Exports — one of the major pillars for the South Korean economy — grew 1.9 percent from the previous quarter, while imports increased 4.3 percent.

    Gross domestic income rose 2.3 percent in the first quarter from the previous quarter, compared with a 0.8 percent expansion three months earlier, the BOK said.

  • Bold bid for expansion by Food Capitals

    Bold bid for expansion by Food Capitals

    Food Capitals, Thailand’s franchisee for Domino’s Pizza and South Korean fried-chicken restaurant chain Kyochon, has acquired two companies for THB400 million (US$11.6 million) in a bid to expand both domestically and overseas.

    It has spent THB289 million to acquire Osha Group’s food business in the US, with the remaining THB121 million for its takeover of Bangkok-based G Enterprise.

    California-based Osha has five restaurant brands – After Osha, Lao Table, Osha Express, Osha Thai and Osha Thai 3rd Street – while G Enterprise’s four restaurant brands are Chingcha Chalee, Moom Muum Park, Pirate Chambre and Umami Falabella.

    Food Capitals CEO Tanakorn Angpubate expects the acquisitions to boost the group’s revenue by more than 50 per cent from THB714 million last year – following five years of red ink.

    The company has also set aside THB200 million to open two restaurants in Thailand and another two in the US.

    Food Capitals’ brands include Domino’s Pizza in Thailand and Cambodia, Kyochon in Thailand, and Red Planet Hotels across Asia.

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  • ANZ sells retail business in Vietnam to South Korea’s Shinhan

    ANZ sells retail business in Vietnam to South Korea’s Shinhan

    The Australian bank said it will focus on its institutional banking, its biggest business in the region. Australian lender ANZ has announced to sell its retail business in Vietnam to South Korea’s Shinhan to focus resources on institutional banking.

    The bank has entered an agreement to transfer all eight branches, including retail staff in Hanoi and Ho Chi Minh City, to Shinhan Bank Vietnam, part of the Seoul-based Shinhan Financial Group, Farhan Faruqui, ANZ international group executive, said in a statement on Friday.

    Faruqui said the sale will allow the bank to focus resources on institutional banking, its “largest business in Asia.”

    “We will be maintaining our presence through our institutional bank in Vietnam which will continue to support our corporate clients in the Greater Mekong Region,” he said.

    ANZ’s institutional bank has a presence in 15 different markets in Asia and was ranked as one of the top four corporate banks in the region by market intelligence provider Greenwich Associates in 2016.

    ANZ’s retail business serves 125,000 customers in Vietnam, and includes $241.2 million in lending assets and $603 million in deposits. The Southeast Asian country’s economy has one the world’s fastest growing rates.

    ANZ said the transfer is subject to regulatory approval and expected to complete by year end.

    Rumors about the sale have been circulating since late last year after the bank sold its wealth management and retail business in Singapore, Hong Kong and three other Asian markets to Singaporean DBS for nearly $80 million above book value.

    Vietnam’s credit growth this year is targeted at 18 percent to facilitate the country’s annual economic expansion of 6.7 percent, the central bank has said. Last year the economy grew 6.21 percent from 2015, the slowest in two years, even though the banking sector posted an annual credit growth of 18.39 percent.

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  • SKT partners with Bluebell on new business

    SKT partners with Bluebell on new business

    SK Telecom is teaming up with Bluebell Korea, a local subsidiary of luxury goods retailer Bluebell Group, as the mobile carrier seeks to step up on-demand services as part of its business expansion.

    The mobile carrier said Wednesday it signed a memorandum of understanding with Bluebell Korea to cooperate on new business opportunities, by bringing information and communication technologies to the local luxury retail industry.

    Bluebell Group operates luxury brands in Asia and specializes in consulting. The group has eight branches across Asia – in Korea as well as Hong Kong and Taiwan – to distribute products from more than 100 brands. Bluebell Korea distributes luxury goods – from cosmetics to clothes, jewelry, watches and accessories — to duty free shops and shopping malls in Asia.

    Under the deal, the two companies vowed to collaborate to connect offline shoppers over online services.

    For instance, a foreign traveler to Korea may receive the latest information about luxury goods on their smartphone through SK Telecom and shop at stores affiliated with Bluebell. The goods purchased from those shops are embedded with location tracking devices so that shoppers don’t have need to worry about losing them or having them stolen, SK Telecom explains. The top mobile carrier also plans to more actively mobilize its cutting-edge technologies including cloud-based digital signage platform, where information, images and videos about products sold are displayed to respective stores’ need and users may even interact what they see.

    “The luxury industry has so far strictly adhered to the craftsmanship of products and traditional sales channels,” SK Telecom said in a statement. “However, a slowdown in market growth coupled with the rise of young, tech-savvy consumers who are taking up a growing share of luxury spending is driving new changes in the conservative industry.”

    “The convergence between ICT and the luxury retail industry will not only create new business opportunities for both parties but also deliver enhanced value and experience for customers,” said Cha In-hyok, executive vice president and head of the Internet of Things business at SK Telecom.

    The global luxury industry is estimated at 300 trillion won ($263 billion) and its impact on related markets in the clothing and accessories is immense, he added. In this age of digital revolution, fashion and retail also have been undergoing significant changes, applying emerging technologies such as virtual reality, artificially intelligent chatbots and blockchains to their day-to-day operations.

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  • Bank of Korea begins effort to ditch coins

    Bank of Korea begins effort to ditch coins

    At convenience stores across the country, customers paying with cash will have the option of depositing extra change into public transit cards or converting them to rewards points. The bank’s goal is to reduce the number of circulating coins, which costs an estimated 60 billion won ($52.6 million) a year to mint.The Bank of Korea is starting with convenience stores as an experiment.

    The pilot project will run through 2019, after which the bank will decide whether to expand the option to other retail outlets.“After we review the results, we will consider whether to adopt the measure at drug stores and traditional open-air markets,” said Cha Hyeon-jin, head of the payment and settlement systems department at the Bank of Korea.

    Cha added the bank is considering a system that will let people send extra change directly to their bank accounts.About 23,050 convenience stores in Korea, including the chains 7-Eleven, CU and With Me, are participating in the project. Big discount chains like E-Mart and Lotte Mart are also part of the effort.

    The public transit cards in which customers can load their extra change include T-Money and Cash Bee. Customers can also convert the change into points on cardless rewards systems run by Hana Card and Naver Pay, a mobile payment service run by internet giant Naver. Shinhan Card will start servicing CU in May, and service for L.Point, the rewards system at 7-Eleven and Lotte Mart, will begin in July.Here’s how it works. Customers first pay for the transaction with cash. Then, if they want to load the extra change into their public transit card, they simply have to tap the card on the card reader. If they want to convert the change into points, they can also simply show a QR code from the corresponding mobile payment app.The Bank of Korea first proposed the idea of a coinless society last December, when it pledged to expand electronic payment methods to a majority of retail outlets by 2020.

    Cash transactions overall are already falling in Korea. The share of cash transactions decreased from 38.9 percent in 2014 to 36 percent last year, while credit card transactions jumped from 31.4 percent to 39.7 percent. When counting debit and prepaid cards, plastic has accounted for the most-used payment method.There are concerns that the move might hurt mom-and-pop shops and traditional markets that still deal heavily in cash. However, Cha said the coinless efforts will not likely have a big impact on them because it is still far from eliminating cash transactions altogether.

    “We will constantly discuss payment methods with smaller retailers and the possible digital divide phenomenon,” Cha said.

  • Woodland India eyes Japan, South Korea

    Woodland India eyes Japan, South Korea

    Footwear and apparel firm Woodland India plans to enter the Japanese and South Korean markets in the next 12 months.

    Owned by the Aero Group, the company is also expanding at home with plans to add 120 exclusive outlets across India by the end of next year.

    Woodland India MD Harkirat Singh says the company also plans to grow its presence in multi-brand outlets.
    He says the company clocked revenue of Rs 1200 crore (US$279.9 million) in the last fiscal year and is seeking growth of 15 to 20 per cent going forward.

    Woodland, which makes most of its products in house, is also looking to add to its employee strength.
    Currently, the company has 600 exclusive outlets apart from presence in 5000 multi-brand stores in India.

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  • UberEats Korea launch imminent

    UberEats Korea launch imminent

    App-based ride service provider Uber Technologies says it is planning to launch its on-demand restaurant delivery service UberEats in South Korea.

    UberEats Korea will partner with restaurants, with ordering conducted on the company’s web site or with a smartphone app.

    “The company is preparing the local launch of UberEats,” said a spokesman for Uber Korea, the local unit of Uber, on the condition of anonymity. “But at the moment, we have not decided on the exact launch date.”

    Industry sources expect the UberEats Korea delivery service to be introduced within the year.

    UberEats Korea is expected to join other local delivery apps such as Yogiyo, FoodFly and Baedal Minjok. Baedal Minjok is the market leader with more than 50 per cent market share, followed by Yogiyo and Baedaltong, which are both owned by Germany-based Delivery Hero.

    Ordering food by phone is commonplace in South Korea. However, delivery apps have become increasingly popular and now take up nearly 15 per cent of the total food delivery market which is estimated at around 12 trillion won (US$10.5 billion) annually.

    UberEats was launched as a delivery pilot in Los Angeles in 2014. Since then, it has expanded to 58 cities. The service also exists in other major Asian cities including Bangkok, Tokyo and Taipei.

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  • Lotte Group forced to drop $4.5bn IPO

    Lotte Group forced to drop $4.5bn IPO

    Following a 30 per cent drop in duty-free sales last month and the virtual closure of more than 100 supermarkets and discount shops in China, the Lotte Group has cancelled its US$4.5 billion IPO.

    Its woes are fallout from the mainland’s objection to South Korea’s new THAAD missile defence system, designed to knock out missiles from North Korea in the event of a war. China’s military claims the system can snoop on its installations as well. China is also angered that the system is on land sold by the Lotte Group to the South Korean government.

    These political moves have put the brakes on Lotte Duty Free’s booming South Korean sales, which rose a record 36 per cent last year to US$5.7 billion.

    Meanwhile, South Korea has protested to the World Trade Organisation (WTO) in an effort to persuade China to relax its stance.

    This means the Lotte Group will now dip out on funding for its expansion programs while its key competitor, Shilla Duty Free, has continued to expand its duty-free business overseas, including Hong Kong International Airport (HKIA), as reported.

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  • Diageo rolls out small Johnnie Walker Black Label

    Diageo rolls out small Johnnie Walker Black Label

    Diageo has launched a 20cl bottle of its Johnnie Walker Black Label as it looks to make whisky more accessible to consumers in South Korea.

    The new pack, which rolled out yesterday, follows a launch for a 20cl Johnnie Walker Red Label last October, the firm said. The 20cl bottle comes with lemon syrup and a recipe for a ‘Johnnie Lemon’ cocktail.

    “Diageo Korea has worked to promote a new drinking culture that makes whisky more accessible to local consumers in various ways,” said Diageo Korea CEO Cho Kilsoo. “Following a small format of Johnnie Walker Red launched last year, the new Johnnie Walker Black Label 20cl is expected to contribute to building a new whisky culture that enables people to enjoy whisky more casually.”

    The new product will be available through convenience stores and hypermarkets, nation-wide. Diageo said the packs will be priced at about KRW16,000 (US$13.99). Red Label packs retail at around KRW8,500.

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  • Jin Air ready to fly to lombok using Boeing 777

    Jin Air ready to fly to lombok using Boeing 777

    South Korean low-cost carrier Jin Air is ready to fly to Lombok in the Indonesian province of West Nusa Tenggara using a wide-bodied Boeing 777 plane to encourage the tourism industry there, an official said.

    “I have received an official (notification) from the chairman of Korean Air that its subsidiary, Jin Air, is ready to fly to Lombok using Boeing 777,” Chief of the Investment Coordinating Board (BKPM) Thomas Lembong noted following a meeting at the Coordinating Ministry for Maritime Affairs here on Monday.

    He stated that low-cost carriers are badly needed to boost the tourism industry in Indonesia.

    Although investment in the tourism sector is not large, it still plays a very strategic role in creating jobs and bringing in foreign exchange earnings from international tourists, he said.

    “This needs an extraordinary teamwork as many tourists depend on air connectivity. We need air connectivity, particularly through budget carriers, so that there will be low-cost flights from Korea, China, Japan, Australia, India, and so on,” he remarked.

    Besides low-cost carriers, the government must also prepare supporting infrastructures to boost the tourism industry, he pointed out.

    “Although the runways and terminals of airports are still good, we still need to upgrade them. We must check their electronic navigation system, so that planes can land and take off despite bad weather,” he stated.

  • South Korea making mark in global beauty markets

    South Korea making mark in global beauty markets

    South Korea is among the top 10 global beauty markets, estimated to be worth more than US$13 billion this year, according to London-based market research firm Mintel Group.

    Its research was released on the eve of the 27th edition of In-cosmetics Global in London, said to be the world’s foremost exhibition for personal-care ingredients. As well as spotlighting South Korea’s beauty market, the research looks at trends impacting the global beauty industry and innovations in textures, ingredients and product experience.

    Facial skincare accounts for 51 per cent of total market share with $6.5 billion in retail sales and a projected 5.8 per cent CAGR over the next five years to reach $7.2 billion by 2020. Much of the success of the category comes from an abundance of product development and the fact that 68 per cent of total skincare product launches in South Korea for 2015-2016 were facial skincare products, according to the Mintel Global New Products Database (GNPD).

    Colour cosmetics make up the second-largest beauty category in the South Korean market, valued at $2.3 billion this year. Mintel research indicates the market is actively supported by consumers with a per capita spend at $45, compared to $43 in the UK and $37 in the US, and more than double the global average of $21. With a projected CAGR of 8.1 per cent over the next five years, the market is estimated to reach $2.8 billion by 2020.

    “The Korean beauty market remains buoyant thanks to fast-paced innovations and highly engaged consumers who don’t hesitate to adopt novel products,” says Mintel senior beauty analyst Jane Jang.

    Several South Korean beauty and personal-care trends are set to impact global beauty markets, says Jang…

    Facial skincare

    For facial skincare, this will be a year of extreme segmentation, says Jang. Products will become increasingly targeted and multi-functional, responding to the needs of knowledgeable and demanding consumers.

    South Korean beauty routines can comprise up to 10 steps, with moisturising, brightening, whitening and anti-ageing specific obsessions.

    “Expect to see hybrid concoctions, such as daily exfoliating moisturisers, anti-wrinkle whitening tone-up creams and lightweight nourishing oil serums, but also transformative textures, like powder-to-serum, oil-to-foam and water-to-cream. Overall, lines are blurring in every possible way to deliver new experiences and create continuous excitement around skincare.

    “A strong focus on quality and safety supports a fascination for natural ingredients, in line with ‘hanbang’, the ancient Korean herbal medicine. Tradition is taken to the next level through scientific improvements, and 69 per cent of facial skincare launches last year featured herbal/botanical claims.”

    Jang says the sheet mask craze does not seem to be slowing down. “Moving beyond basic hydrating benefits, sheet masks and patches are now designed for each part of the body and every member of the family, babies included… Some interesting examples include masks inspired by oriental acupressure massage techniques, plus injection treatments at clinics featuring micro-needles and pressure points, and sauna-effect masks that lock in moisture while trapping body heat.”

    Make-up

    South Korea’s make-up rituals last year focussed greatly on lips and complexion, using products in a diversity of shades with a variety of contouring techniques. “As such, the number of  lip colour and face make-up product launches tend to be higher than the global average,” says Jang. Mintel GNPD says lip colour launches accounted for 30 per cent of all launches of colour cosmetics in South Korea last year, compared to a global average of 27 per cent. This is followed by foundations and fluid illuminators, accounting for 16 per cent of launches.

    “The boom of hybrid formats has spawned a variety of new lip products, like lip syrups, lip crayons, lip-quids and gel sticks,” says Hang. “Lip tints are also widely diffused, but contrary to their potentially drying Western counterparts, South Korean products are lightweight and glossy, and often come as oils.”

    A Korean success story for the past few years has been cushion compacts, breaking through the Western market last year. “New launches in South Korea include multi-functional skincare claims such as moisturising, anti-ageing, whitening and UV protection; foundation-like properties; and hygiene and application innovations.”

    Jang says the trend for hybrid textures and formats is borrowed from skincare. “South Korean brands are increasingly focussing on gels, jellies, mousses and watery oils. Moreover, transforming textures combine the benefits of two or more textures within one product. For instance, liquid textures such as cream and oil that provide high moisture and spreadability transform into a water or serum for fast absorption or into a powder to give a matte and lasting finish.”

    Summing up, Jang says that because of K-beauty’s growing popularity worldwide, Western brands are constantly looking to South Korea for inspiration.

    “The popularity of South Korean beauty products lies in their high performance combined with fun packaging and sensorial cues, as well as affordable prices.”

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