Amorepacific aims to be top 3 in U.S. skincare market by 2027

(Yonhap)

South Korea’s Amorepacific, once primarily an Asia-focused company, is transforming into a Western-oriented global enterprise. CEO Kim Seung-hwan emphasized the shift, saying, “We are now ready to evolve from a regional company centered on Asia to a global company focused on the West.” His comments are backed by data: revenue from Western markets, which accounted for just 1 percent of total sales in 2021, has surged to an average of 20 percent in the second and third quarters of 2024 - a twentyfold increase.

Western markets are now overtaking China in the company’s overseas revenue share., Western markets contributed 40 percent as of the third quarter of 2024 surpassing China’s 31 percent, as the gap steadily widens.

To solidify its position as a global player, Amorepacific is ramping up efforts to penetrate Western markets. The company has designated its U.S. subsidiary as the North American Regional Headquarters (RHQ) to enhance market intelligence. Plans are also in place to expand into Canada and Latin America while entering new product categories such as derma cosmetics and makeup. The company aims to achieve an average annual sales growth rate of 10 percent and an operating profit margin of 12 percent by 2027.

In an interview with the Maeil Business Newspaper last Friday at the company’s headquarters in Seoul, Kim and Giovanni Valentini, CEO of the North American RHQ, discussed the company’s strategies.

Addressing criticism that Amorepacific’s growth in the United States has lagged behind the success of smaller indie beauty brands, Kim acknowledged areas for improvement. “Indie brands excel in their agility and the variety of ODM (original design manufacturing) options they leverage,” he said. To tap into this expertise, Amorepacific acquired COSRX, a leading indie brand. “We are integrating COSRX’s success DNA into Amorepacific’s system and infrastructure to create a differentiated competitive edge,” Kim added.

Kim highlighted Amorepacific’s unique strengths, including its ability to scale via strategic partnerships with distributors and its robust omnichannel presence - capabilities he believes are difficult for indie brands to replicate.

The company is already seeing results. Amorepacific launched a Mamonde line exclusive to Daiso in just five months, for example, a feat that would have been impossible under its previous operational methods.

The company has set ambitious goals for the U.S. skincare market, where it is currently ranked sixth with a 3.7 percent market share. Amorepacific aims to reach a 10 percent share by 2027, becoming one of the top three players in the industry. “K-beauty is entering a ‘second wave,’ with U.S. consumers recognizing the quality and trendiness of our products,” Valentini said.

Amorepacific also plans to introduce new brands to fuel its growth. The company will increase its skincare brand portfolio from six to ten by 2027, starting with two launches in the first half of 2025. Two products in this lineup, priced under $50, aim to attract a broader audience.

Meanwhile, in the Chinese market, which has taken a backseat to Western expansion, Amorepacific is focusing on profitability. Most restructuring efforts are expected to conclude by the end of 2024, the company said.