Two major Korean retailers, Hyundai Department Store and Shinsegae Group, are moving their competition stage from luxury fashion to premium cosmetics.
Both companies realise that the luxury fashion market in Korea has become saturated, and that they need a new growth engine.
As of the first half of this year, the sales and operating profit of Hyundai Department Store’s fashion unit, The Handsome, reached US$556.7M and US$59.2M respectively. Shinsegae’s fashion and beauty business, Shinsegae International, reached US$588.2M in revenue and US$41.2M in profit. The companies expect that customers who have purchased their high-priced luxury items in the past will also show interest in their premium cosmetic brands.
Shinsegae International launched its premium cosmetics brand, Poiret, in March and The Handsome opened its first luxury skincare brand, Oera, at Hyundai Department Store in Apgujeong, southern Seoul, in July. Oera uses top-of-the-line ingredients – including water from Switzerland – to produce its beauty items, and their prices range between US$171.51 and US$428.78, which is quite high compared to other local cosmetics brands.
“Cosmetics has already become an important growth engine in the fashion industry. Through continuous investments, the discovery of new brands with a high potential for growth and by fostering our private brands, Shinsegae will establish ourselves both in the local and global beauty markets,” a Shinsegae International representative said.
