The South Korean beauty and cosmetics giant, Amorepacific Corp., has unveiled an ambitious plan to expand its brick-and-mortar presence in the country, aiming to quadruple its current number of stores. Notably, it intends to launch a hundred of these stores in collaboration with Reliance Retail Ventures Ltd.
The company behind well-known brands such as Innisfree and Etude House has entered into agreements with Reliance Retail to distribute its products through Reliance’s beauty store—Tira.
Read More: Reliance Retail ventures into beauty and personal care with Tira, targets 100 locations nationwide
“We have signed for 100 store-in-store outlets inside the Tira stores that will be opened over the next three years,” said Paul Lee, managing director and country head, Amorepacific.
Lee’s visit to India aligns with the significant milestone of the group’s leading brand, Innisfree, reaching a decade of operations in the world’s most densely populated market.
Additionally, it markets three other brands: Laneige, Sulwhasoo, and Etude House.
The 78-year-old conglomerate rode the K-beauty trend to ascend as one of Asia’s most influential cosmetics empires, surpassing Chanel and LVMH in beauty sales. However, it has recently faced challenges due to a deceleration in its business operations in China.
To compensate for the sluggish sales in China, the company is intensifying its expansion efforts in alternative markets, with a particular focus on India. In the past decade, the company primarily entered the Indian market through partnerships with local retailer Nykaa. Nevertheless, Amorepacific is now strategizing to utilize the extensive distribution networks of the Tata Group and Reliance to broaden its presence.
“We have high expectations from the Indian market,” said Lee. “While we have a very strong partnership with Nykaa, we are now also building profound partnerships with Tata, Reliance, and other multibrand retailers like Lifestyle and Sephora.”
The cosmetics and beauty giant is in the final stages of securing distribution contracts for its Laneige products in Sephora stores.
According to Lee, the company presently operates 80 multi-brand outlets in India and intends to triple this number to reach 240 within the next 3-4 years.
The decision to broaden its presence through multi-brand outlets represents a departure from the company’s previous approach of establishing exclusive stores. As part of this shift, the company has closed approximately 20 exclusive outlets and currently maintains only two within the Delhi-NCR region.
Lee also said that plans to roll out more exclusive stores are on hold. “That is because we believe the trend of offline as a channel of beauty has shifted to multibrand concepts, similar to what we see in the West.”
“In India, we are also seeing a shift from what used to be a Nykaa-dominated market, both online and offline. Today, the likes of Tata CLiQ Palette, Reliance’s Tira, and big retailers Shoppers Stop and Lifestyle are expanding rapidly,” he said.
India’s contribution to Amorepacific’s group sales currently stands at under 5%. Nevertheless, Lee indicated that the company’s business in India has been experiencing remarkable annual growth, nearly reaching 25%. Lee anticipates that this growth rate will gradually taper down to around 15% due to fierce competition from both domestic and international brands, although this still exceeds the industry’s overall growth rate.
According to Euromonitor, India ranked as the world’s seventh-largest cosmetics market in 2020, with sales amounting to approximately $15.8 billion.
The market research firm anticipates that by 2024, India will rise into the top five cosmetics markets globally, with sales volume projected to increase by 8.3% to reach $21.6 billion.
Other than tapping the stores of local retailers, Amorepacific has also unveiled a new look for Innisfree to mark its 10th anniversary. “The rebrand also includes a refreshed website and much-awaited new product updates,” said Lee. It has introduced a new tagline that embodies the brand’s commitment to embracing nature and pioneering healthy beauty.
“Indian consumers are exposed to a lot of international brands. As for just the Korean brands, the count today stands at about 30–40,” said Lee, referring to the heightened competition in the beauty and cosmetics market.
However, despite these challenges, the budget-friendly skincare brand, Innisfree, has consistently maintained its top position among Korean brands in the Indian skincare market since 2015, according to Lee. He also noted that the brand commands a significant 15% share of the K-beauty market.
“We want to invest more in India to remain ahead of the competition,” said Lee. Amorepacific is also scouting for an Indian face to promote its brand. “In India, Bollywood has a big demand. So, we are in the process of tying up with a celebrity. We are already doing lots of promotions with the help of Indian models … So, more local collaborations would be the way forward.”