Former big names in K-beauty hope to regain former glory

The Korea Times

The Korea Times

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Sat, December 9, 2023 | 07:23

Industry

Former big names in K-beauty hope to regain former glory

Posted : 2017-07-05 14:42

Updated : 2017-07-05 20:48

It's Hanbul's factory in Huzhou, China

By Kim Ji-soo

K-beauty or Korean cosmetics are popular globally, to an extent unimaginable when our mothers and grandmothers first began using these domestic products.

The ever-increasing number of Korean brands and products are simultaneously a joy and an overload for consumers. Back in the 1980s and 1990s, just several domestics brands such as AmorePacific and Hankook Cosmetics with its Jutanhak brand serviced Korean consumers..

"I remember when I was in Korea in 1987, I would use Amore or Jutanhak products and I remember that they would be lemon-scented skin products in spring, followed by all cool products for summer and then whitening products in fall and winter," said Ahn, a 46-year-old female resident of Seoul.

These brands harbor nostalgic memories of times when services were very personal and affordable and where sales ladies would visit homes and prepare facial masks using their products and eggs before they launched sales. In that vein, these former big names have an advantage with a certain segment of the consumer market that remembers their history. The success of AmorePacific, the Korean beauty giant, spurred by R&Dand innovative products, is now solid.Their brands such as Sulwhasoo are well-known throughout the world.

But Hankook Cosmetics the maker of the Jutanhak brand went on a different path in the 2000s when so-called road-shop brands offering drugstore products began springing up. Hankook Cosmetics is now attempting a rebound with more modern and trending make-up brands such as "the Saem," even amid a general slump triggered by fewer China sales after the deployment of a THAAD missile system here and Beijing's reaction to it.

The struggles of Hankook compounded when it was forced to sell off its headquarter office in Seoul 2014. But in 2016, Hankook Cosmetics posted a 15.7 billion won in operating profit with brands such as the mid-to-lower priced the Saem products. The engine behind theSaem's upsurge was the popularity of its Urban Eco's Harakeke skin products and Waratah skin items. The Saem stores also increased in number to 289 nationwide, up 49 percent from the previous year. The brand also exports to over 15 overseas markets including three East European nations, the United States, Canada and China.

The Saem most recently opened a shop in the Ginza district in Tokyo. It also has a shop in Shinjuku.

Hanbul Cosmetics merged with It's Skin and Hanbul Cosmetics changed its name to It's Hanbul. The company is also working to reclaim market share. It's Hanbul established in the late 1980s. After having hard time maintaining sales, the source for turnaround came when its affiliate It's Skin hit it big with a snail mucin item, the Prestige Cream D'escargot, which has seen huge success since going on the market in 2009.

This year, it has completed building a factory in Huzhou, China, envisioning operation by second half of the year. Measuring about 13,058 square meters, the company invested $250 million into the factory. The company forecast that annual capacity out of the factory to be at around 35 million per year.

That would mean that the company would first produce "in-China" manufacturing of its snail mucin line products and sales of it in China.Long popular, but having faced delays in getting hygiene accreditation required from the Chinese Food and Drug Administration, the products have mostly been sold through bag merchants.

The company however was cautious about an immediate rebound, saying that anticipations for better economic waters between South Korea and China with the onset of Moon Jae-in administration were already reflected through rising stock prices in early May.

"But we are going to see real figures, most probably when we hear that Chinese tourists receive visas or the news arrives that group package tour products have been sold out or we physically see increase in the number of Chinese tourists in Myeongdong," a PR official for the company said.

Coreana, another company that dominated early on with its mud-packs, is working to reclaim market share even amid the general slump of the K-beauty industry. After a few years of founding ground in China, Coreana finished building a factory there last year in Tianjin. Coreana's affiliate, Biocos, has joined hands with Songjeong to clinch a 60 billion won contract to export to China.

The Saem shop in Ginza, Tokyo /Courtesy of the Saem

janee@ktimes.com