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According to the Seoul-based company, Amore Pacific Global Operations incorporated Amore Pacific Hong Kong, a joint venture firm, as a subsidiary by expanding its shares to 77 percent earlier this year. When the joint venture was established in 2001, Amore Pacific owned only 30 percent of total shares.
Until recently, the Korean company has been promoting its business in Hong Kong by investing in shares in the joint venture rather than direct involvement in management.
The latest acquisition, however, is expected to allow Amore Pacific to be more active in Hong Kong. The company expects business in Hong Kong to expand for its Sulwhasoo, Laneige, Mamonde, Etude and Innisfree global brands.
The Hong Kong unit has 302 employees and operates 25 Laneige stores and seven Sulwhasoo stores, including a flagship that opened in the center of the city on Canton Road in Tsim Sha Tsui. Its sales last year in Hong Kong were 84.8 billion won ($79.2 million).
“Based on our acquisition of Amore Pacific Hong Kong, we expect our overseas sales this year to reach 800 billion won, which would be more than 20 percent of our total sales,” the company said yesterday.
The local cosmetics market is considered to be saturated, with more foreign brands making inroads and luring consumers.
Big operators and competitors of Amore Pacific are L’Oreal, Estee Lauder and P&G.
One of the strategies Amore Pacific adopted was to enter overseas markets where there is strong potential for growth, such as Asia.
As of late last year, Amore Pacific’s overseas sales reached 539.9 billion won, up 27.8 percent from the previous year. Sales from its business in China last year were 338.7 billion won, up 29.1 percent from the previous year.
Sales in other Asian countries also increased 64.1 percent to 126.6 billion won over the same period.
Sales in Western countries have also increased in recent years.
In France, Amore Pacific’s revenues were 85.5 billion won in 2012, but the following year sales jumped to 90.4 billion won, an increase of 5.7 percent.
Sales in the United States grew by 30.5 percent from 18 billion won to 23.5 billion won.
BY LEE EUN-JOO [angie@joongang.co.kr]
