South Korea's Amorepacific sees pretty prospects, profitability across China
Speaking highly of China's consumption potential, technological innovation and fashion leadership, South Korean cosmetics giant Amorepacific is confident about China's market and will continue to focus on serving its consumers, said its top executive in the country.
"Since entering China in 1992, Amorepacific's beauty business has continued to grow, and China has become one of Amorepacific's most important overseas markets. With the favorable policies frequently introduced by China for foreign investment enterprises, we are confident about increasing our investment in China," said Mike Hwang, president of Amorepacific China.
Hwang said that as a globally significant consumer cosmetics market, China — within the framework of dual circulation — plays a positive role for the company in terms of technological innovation, fashion leadership, consumer insights, new product development and other aspects, both internationally and domestically.
Amorepacific has been deeply rooted in China for more than 30 years. Based on a consumer-centric principle, it has formed a Chinese consumer-oriented research and development system, which helps the company gain in-depth insight into market trends, fully understand consumer needs and further expand its localized innovation footprint.
The group established a global R&D center in Shanghai. Through big data exploration, consumer behavior surveys, product blind tests and clinical tests, the R&D center explores cosmetics trends in the Chinese market, as well as the specialized technical content that meets the needs of Chinese consumers, integrating it into the entire product lifecycle.
Meanwhile, in the digital era, Amorepacific has been accelerating its digital transformation in China. By actively promoting full-link digital strategies, it is further shaping its sustainable competitiveness and forming new business modes to stimulate consumption.
Working with experts and partners in the ecosystem, the company is deepening digital applications in the cosmetics market. Teaming up with Ali Cloud, the company has developed Dashboard, a multidimensional visualized digital platform that organically combines data from the various sub-brands of the group, helping it make better business decisions.
The company is also working with mainstream e-commerce platforms, such as Tmall and JD, and new social media platforms to better interact with Chinese consumers and offer smarter products and services to customers, both existing and potential.
Driven by many factors such as the upgrading of consumption structure, the enhancement of aesthetic concepts and a desire for higher-end livelihoods, domestic cosmetics consumption continues to grow.
According to the latest report released by market consultancy iiMedia Research, China's cosmetics industry in 2023 totaled 516.09 billion yuan ($71.68 billion), growing 6.4 percent on a yearly basis. It is expected that the market will reach 579.1 billion yuan by 2025.
Fu Yifu, a senior researcher at the Star Atlas Institute of Finance, said: "In recent years, China's economy and society have been developing rapidly, and household disposable incomes have continued to rise. Currently, there is still great consumption potential to be tapped into. Judging from the consumption data from this February's Spring Festival and the recent consumer price index data, China's consumer confidence is constantly improving. With favorable policies to promote consumption being implemented, the consumption potential is expected to be further released."
For foreign cosmetics companies in China, Zhan Junhao, founder of Fujian Huace Brand Positioning Consulting, suggested they deeply learn about demand and consumption trends within the Chinese market, and adjust their business strategies and brand positioning accordingly.
"They should place emphasis on innovation and R&D to satisfy consumers' pursuit of quality and individuation. They should also have good communication with consumers to establish good reputations. In addition, as China pursues green development, such firms would do well to focus on sustainable development," Zhan said.
Hwang from Amorepacific added: "In the future, we will continue to implement the three core strategies of 'consumer-centric product innovation', 'continuously advancing digitization', and 'future-oriented sustainable development' to provide Chinese consumers with more diverse and satisfying products and services that meet their consumption needs. Furthermore, Amorepacific will adhere to corporate social responsibility, and actively promote sustainable actions suitable for the Chinese market, such as carbon neutrality, plastic reduction, sustainable products and consumption."
