laitimes

Amorepacific China's New Growth Flywheel

China's skincare market is entering the era of technology skincare 3.0. Cutting-edge technology and constantly updated and iterative product capabilities have become the most stable moat for beauty companies, and they are also the key capabilities to attract and effectively communicate with consumers. Recently, global beauty company Amorepacific has dropped a bombshell in this key market in China, announcing that its high-end high-tech skincare brand AP Yanbin has officially entered the Chinese mainland market, and the first store in the mainland has landed in Shanghai Jing'an Jiuguang Department Store.

At the beginning of this year, Amorepacific announced that its namesake beauty brand 'AMOREPACIFIC', which was established in 2002, will be rebranded and upgraded to 'AP Hybin', a high-end high-tech skincare brand that focuses on cutting-edge anti-aging technology to meet consumers' daily anti-aging needs.

AP's entry into the market will not only enrich Amorepacific's brand lineup in the Chinese market, but also help it further expand its footprint in the high-end technology beauty field, which is an important step in its global strategic layout.

01

"Darling" AP Yan Bin is making efforts in Chinese mainland, and Amorepacific's technology strategy is upgraded

It is understood that Amorepacific's full range of products carry the strength and crystallization of Amorepacific's more than 70 years of skincare research, and are committed to applying the results of epigenetic research on skin aging. As the "darling" carefully built by the group, the R&D and efficacy strength of AP Yanbin Technology can be seen.

For example, to address specific skin needs that arise after a consumer has undergone a professional beauty program, AP Double Repair & Firming Cream (M.D. Hot Shock Cream) combines two core patented ingredients, PDRN Water Light Repair Factor and EXOYNE Firming Collagen Microspheres, to deal with barrier damage with repair effect, to promote firming and lifting with triple collagen self-generation, to repair the barrier externally, to promote collagen internally, and to use a unique dosage form of patented closed superconducting membrane to promote ingredient absorption, so as to achieve synergy after photoelectric projects, and provide a new idea for efficient skin care after professional beauty.

Amorepacific China's New Growth Flywheel

At present, AP has launched three major product series, positioning high-end and medical aesthetic synergy professional beauty and skin care (M.D. Solution) series (priced at 1150-2680 yuan), Prime Reserve series (priced at 1650-4020 yuan) positioned as ultra-high-end all-round anti-aging, and rejuvenating skin rejuvenation (A.O. Anti-Oxidant). Among them, the A.O. series is currently only available as a single product, and the full line of products will be officially launched in 25 years.

CBO's AP Yanbin offline counter boutique in Shanghai learned that since the brand's launch, its store customer flow, order turnover and consumer response have all been higher than the group's expectations. Wu Pinyi, general manager of AP Yanbin brand in China, said in an interview with CBO reporters that AP Yanbin requires business personnel to have more than 8 years of sales experience in the formation of talents, which aims to provide customers with higher quality and high-quality services.

Amorepacific China's New Growth Flywheel

● AP Yanbin Shanghai Jing'an Jiuguang Department Store counter

In terms of sales strategy, AP Yanbin will not choose large-scale traffic promotion, but from the perspective of focusing on scientific and technological research and development, pay more attention to the opinions of the main customer groups, drive the brand reputation through the quality of product resistance, and slowly drive the "line" of brand technology skin care through the "point" of the main customer group, and weave the "face" of the group's famous science and technology brand in China.

There is no doubt that the introduction of AP is a strategic upgrade of Amorepacific in the Chinese market, which is meeting the growing demand for high-quality, high-tech beauty products from Chinese consumers, and will bring new growth points to the company's growth.

02

Technology-driven products accelerate brand renewal and upgrading

In 1992, when China and South Korea established diplomatic relations, Amorepacific officially entered the Chinese market and introduced well-known brands such as Sulwhasoo, Laneige, innisfree, Dream Makeup, Lui, and Mei Shangxuan.

In recent years, with the beginning of the "era of change" in the cosmetics industry, Amorepacific's brands have entered a new stage of development, and the global brand has been rebranded from a top-down perspective to upgrade brand value and drive growth.

So far, Amorepacific China's brand matrix has been rejuvenated and adjusted by major brands such as beauty brands such as Sulwhasoo, Laneige, innisfree, Dream Makeup, and Ryo Toiletries.

Amorepacific's Sulwhasoo, a global high-end beauty brand, has launched a new mission of "Pioneering Art and Inheriting Boundless Beauty", and has rebranded and upgraded its brand from all dimensions to help it expand its innovative influence through multi-channel brand events. In 2023, Sulwhasoo launched the Essence Collection with Ginseng Essence SR as a new masterpiece of its ginseng luxury anti-aging.

Amorepacific China's New Growth Flywheel

Since 2020, Laneige has embarked on a brand refresh and upgrade. With the support of "Unique Korean Beauty Care", "Mid-to-high-end Positioning" and "High-Efficacy Formula", the brand has insight that "aging and rejuvenation" is a skin problem that local consumers are focusing on, and the multi-effect, efficient and convenient anti-aging product market is a blue ocean to explore and conquer. Therefore, Laneige has changed the basic route of traditional Korean moisturizing, and put keywords such as "youth" and "high efficacy" into the priority of the brand development strategy.

In 2022, Laneige released its exclusive anti-aging ingredient "Synoxine" in a high-profile manner, and launched a representative high-efficacy anti-aging product "Golden Three-Tube" serum. In the following two years, Laneige took advantage of the victory and upgraded and iterated its star products sleeping mask and base makeup products, and successively launched new anti-aging products - "Night Cat Purple" Firming Sleeping Mask and the fourth generation of Snow Yarn Isolation to meet the needs of Asian consumers.

Amorepacific China's New Growth Flywheel

By focusing on scientific and technological strength and brand renewal strategy, Sulwhasoo and Laneige have developed a set of combination of "high efficacy and youthful positioning" and "equal emphasis on scientific and technological strength and unique brand charm", relying on the hard core strength of star products to effectively enhance the brand competitiveness.

In 2023, innisfree has undergone a comprehensive brand refresh to more directly convey the concept of natural and high-performance skincare to consumers, while the brand has launched a new and upgraded range of moisturizing and repairing green tea hyaluronic acid and anti-oxidant and anti-wrinkle black tea peptides in the Chinese market. These two series have been widely praised for their gentle, natural and high-efficacy skincare.

Amorepacific China's New Growth Flywheel

Its skincare brand Dream Makeup will also undergo a brand upgrade in the second half of this year. At the same time, the product line that is popular in Korea and meets the skin care needs of young Chinese consumers has been launched, with the brand image of "Hyper-Flora Transcendent Flower Plant" as the core, and innovative products that break through the boundaries to help young consumers bloom the natural beauty full of personality.

Amorepacific is promoting the renewal of its skincare brand, and it is also expanding its focus to the skincare brand 'Yu). This move reflects Amorepacific's commitment to a multi-brand strategy and its strategic intent to explore specific market segments.

According to a conservative estimate by Market Data Forecast, an authoritative data analysis agency, the global hair loss market will grow to US$13.44 billion (about 89.6 billion yuan) by 2026, with an average annual compound growth rate of 8.8%. In addition, according to Frost & Sullivan's analysis, China's hair loss market is expected to reach 41.2 billion yuan in 2026, with an average annual compound growth rate of nearly 12%.

In order to cater to this market trend, the brand "Lu", which focuses on anti-hair loss and scalp care, has conducted in-depth research on ginseng, developed a unique application process to strengthen the strength and nourishment effect of ginseng on the scalp and hair, and plans to add this unique ingredient to its subsequent product series to enhance the technological and functional image of the "Lu" product line, better connect with consumer needs, and enhance the market competitiveness of the brand.

Amorepacific China's New Growth Flywheel

It is easy to see that Amorepacific is steadily advancing the deep integration of its brand image with cutting-edge technology through a series of well-planned brand renewal and product innovation measures. These initiatives include not only the upgrading of existing product lines, but also the introduction of cutting-edge technology elements to enhance the technological content and user experience of products. In this way, Amorepacific aims to build a more modern and technologically advanced brand image that will enable it to differentiate itself in an increasingly competitive market environment.

03

Continue to deepen the Chinese market and explore the best solution for local play

Since Amorepacific's entry into the Chinese market, it has regarded the Chinese market as one of its major strategic development markets. According to Korea's Amorepacific 2024 first quarter financial report, its total sales in the first three months of this year reached 911.5 billion won (about 4.8 billion yuan), and the Chinese market accounted for 16.3% of the share, continuing to lead the overseas market.

China's consumption potential and market share continue to drive Amorepacific's investment in core R&D capabilities and the exploration of new operating models and technologies.

In 2011, Amorepacific invested in the construction of Amorepacific Beauty Garden in Malu Town, Jiading District, Shanghai, which was completed and put into operation in 2014 in order to provide consumers with a wide range of products and services, from skin care and makeup to hair care.

Amorepacific Shanghai Beauty Garden is Amorepacific's largest production and R&D logistics base outside of Korea. The total investment of the project is 750 million yuan, with a total construction area of 41,001 square meters. Equipped with global standard operating systems and environmentally friendly equipment, the average annual production capacity is 13,000 tons, equivalent to an annual output of about 100 million products, and the production capacity is 10 times that of the original Shanghai factory.

Amorepacific China's New Growth Flywheel

● Amore Shanghai Beauty Garden

Amorepacific (Shanghai) R&D Center, located in Amore's Shanghai Beauty Garden, has become one of the company's important global R&D bases, playing an important role in the "China-Korea Integration" R&D platform, focusing on developing products that meet the preferences and needs of Chinese consumers, and establishing a research and R&D system centered on the Chinese market. Taking the R&D of Dream Cosmetics Essence Rose Fruit Peel Liquid Mask (small bottle) as an example, in response to the relevant regulations of the Mainland's "Safety and Technical Specifications for Cosmetics" for acid-based skin care products, the local R&D team applied gluconolactone to the product, and carried out innovative research on the impact of acid-containing skin care products on different skin types, which greatly balances the safety and efficacy of the product.

Amorepacific China's New Growth Flywheel

At the same time, in order to further strengthen effective communication with Chinese consumers, Amorepacific is promoting medical research co-creation and implementing cooperation and research with local institutions. In 2023, Amorepacific (Shanghai) R&D Center signed a contract with Weipu, a major domestic research-based testing organization, to carry out multi-dimensional strategic cooperation in the fields of human safety and human efficacy testing. In April this year, Amorepacific (Shanghai) R&D Center announced the official launch of the 'Aesthetic Research Expert Committee' program to further expand the dialogue with Chinese consumers by bringing together "think tanks" from different fields.

While deepening R&D and investment in the Chinese market, Amorepacific is also exploring a management team and operating model suitable for the Chinese market to cope with the challenges of its declining performance in the Chinese market.

In addition to "brand image remodeling", "expansion of high-efficacy products" and "strengthening brand technology positioning" as the focus of transformation, it also seeks the best solution in China in terms of organization and management. In April this year, Taeho Park, who has 24 years of practical experience, was appointed as the president of China, and was fully responsible for the development and management of China's business. Amorepacific said, "In the future, we look forward to Mr. Park Tae-ho continuing to lead the Chinese business to take off again with his outstanding leadership skills and rich management experience." ”

In terms of channels, Amorepacific also has a corresponding product layout and sales strategy to meet the consumption habits of Chinese consumers who prefer online shopping. They are actively promoting the layout of multi-dimensional e-commerce platforms, not only consolidating the brand's influence and image on major e-commerce platforms such as Tmall and JD.com, but also actively exploring social e-commerce platforms such as Douyin and Kuaishou to seek new opportunities for business growth.

Taking Sulwhasoo as an example, the brand currently has official flagship stores on Tmall, JD.com, Douyin, WeChat, and Vipshop, and simultaneously opens brand-operated live broadcast rooms on the above platforms, actively participating in shopping festivals such as 618 and Double 11.

Its Laneige, innisfree, Mengxiang and Lu brands are also actively deploying various social e-commerce platforms, such as continuously optimizing the self-operated live broadcast on the Douyin platform in the future, so as to respond more directly and quickly to consumer needs, so as to achieve online business growth.

For online marketing activities, Amorepacific collaborates with social media KOLs to promote and market products through live broadcasts, short videos, social media advertisements, etc., to show product features and usage effects more directly and vividly, so as to attract more consumers' attention and purchases. Use big data technology to analyze consumer portraits and behaviors, grasp the needs and preferences of consumers, and accurately push them on social media and e-commerce platforms to optimize marketing effects.

In addition, Amorepacific said that in the future, it will leverage the social attributes and user ecology of social e-commerce to further aggregate public and private domain traffic, create a new live broadcast room scene to interact with consumers, achieve full-link transformation, and improve sales conversion rate.

Amorepacific's transformation shows that Amorepacific is actively responding to the "pain times" of market changes and changes in consumer demand, and is striving for long-term sustainable growth through multi-dimensional upgrading of brands, products, technologies, and business models.

Amorepacific China is ushering in a new era of growth in this key market. In the face of an increasingly mature consumer base, Amorepacific China is rediscovering its "growth flywheel" through a series of "localization" initiatives.

Read on