Unilever paid €2.27bn for its stake in Carver, a fast-growing skincare business which reported a threefold increase in revenues last year to €321m.
Robert Waldschmidt, a consumer industries analyst at Liberum, told the Financial Times that the deal was not just about the South Korean market. “This industry has a strong influence on neighbouring countries such as China and Japan, so I’m sure Unilever plans to leverage this into their Chinese business, for example.”
Political tensions between Korea and China, however, have had an adverse effect on some Korean brands – retailer Lotte, for example, has announced it will sell a number of its Chinese stores with the possibility of withdrawing from the country completely – and analysts appear divided on how this will play out in the beauty sector.
Some argue that a company like Carver is safe from a backlash thanks to the popularity of its products in China, while others take the view that there is a serious threat and that South East Asia is a better bet for expansion.
Amorepacific is inclined to the latter approach, as, Bloomberg reported, it is pushing into Indonesia, Singapore, Malaysia, Thailand and Vietnam with new product lines that take into account the region’s range of skin tones, weather conditions and religious practices such as Muslim women washing their faces five times a day before prayers.
So, for example, Muslim women want lighter, washable makeup that can be removed easily before daily prayers and then quickly reapplied, while those wearing the hijab may prefer to highlight the visible areas of their face with more vibrantly coloured lipstick and eyeshadow.
“The diversity of Southeast Asia was a challenge,” acknowledged Robin Na, head of Amorepacific’s operations in Southeast Asia. “The region is a melting pot compared with China and Korea.”
Data sourced from Financial Times, Bloomberg; additional content by WARC staff