April 24, 2024

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[THE INVESTOR] Competition in the Korean cosmetics industry is likely to become fiercer, as E-mart has launched a cheap but high quality cosmetics brand, Sentence.

Currently, the cosmetic market is led by Amorepacific. Suh Kyung-bae, Amorepacific’s chairman since 1997, has been able to keep his company’s position as No. 1 in the industry largely thanks to the success of Sulwhasoo. It was the first domestic beauty brand to reach sales of 1 trillion won ($883 million) in 2015 and has maintained its No. 1 position in sales at domestic department stores for the past 10 years.

 

A Sentence store at E-mart

The company is also known for its success in the global market with its five popular brands: Sulwhasoo, Laneige, Mamonde, Etude House and Innisfree.

However, the recent retaliation by China against Korea’s decision to deploy the US Terminal High Altitude Area Defense system here has reduced the firm’s sales in the Chinese market. Stagnation in its domestic sales and tax exemption channels have also led to some difficulties.

Chung Yong-jin, vice chairman of Shinsegae Group, led the launch of E-mart’s ecofriendly cosmetics brand Sentence last July. 

After two years of collaborative research with cosmetics manufacturers, such as Kolmar Korea and Cosmax, Sentence became the first cosmetics brand of a category called “mart cosmetics.”

Unlike typical cosmetics sold at large retail stores, mart cosmetics have their own independent stores that provide one-to-one customer consultations.

Since its launch, the brand has held promotions such as events to test scents as well as free scalp and skin diagnosis services.

Industry watchers have speculated that Chung plans to develop Sentence into an independent brand.

The recent success of E-mart’s private brands, such as its affordable grocery brand No Brand and home meal replacement brand Peacock, has encouraged the company to expand its low-priced products.

Peacock has become a representative brand in the Korean food industry by enlarging its distribution channels to e-commerce and home shopping. A similar strategy is to be applied to Sentence.

The first Sentence store opened in Jukjeon, Yongin, and seven more stores have since been added. Its products are sold online as well.

Chung has also not shied away from public attention, communicating with the public through social networking sites to promote new trends. 

By Min Sang-seek, Lee Se-jin and Yim Ji-min/The Superrich Team(jiminy@heraldcorp.com)