Amore Pacific Seeks New Growth in Clean Beauty
- Chaileedo Press
- Aug 2, 2022
- 4 min read
Updated: Aug 25, 2022
Abstract: Mamonde launched its first clean beauty product line - Smart Clean Re-Balancing Series, claiming to add unique black yeast extract from Jeju Island in Korea, Ganoderma lucidum, and other herbal extracts respectively. The set is priced at $42.7 in its flagship store on the Chinese e-commerce platform Tmall.
Mamonde claimed that the new product will be launched in the first batch of 4 new products, which will not add risky ingredients and contain more than 90% natural ingredients. For the product's efficacy, Mamonde said that it can quickly soothe the skin stimulated by the outside, improve the skin temporary redness and maintain the skin balance state. The series is currently available in China. It is sold in Chinese e-commerce platform Tmall and Mini Program on Chinese social platform Wechat.
CHAILEEDO learns that Mamonde comes from the Amore Pacific. In 2019 and 2020, Amore Pacific launched a new brand of gentle skincare that promotes clean beauty, "SOON+" and a pragmatic lifestyle brand, "Enough Project". This is also a change strategy that Amore Pacific is seeking for new growth points.
Judging from the market data, clean beauty is on the rise. The global clean beauty market is expected to reach $6.01 billion in 2021 and $11.56 billion by 2027. Clean beauty is expected to reach $100 billion in the next decade. Data from NPD, a leading market research firm in the United States, shows that beauty product sales fell 14% during the epidemic. But sales of clean beauty products rose 11% against the trend. This shows that the future development prospects of clean beauty can be described as good and the market demand for this category of beauty products will also continue to further expand.
In recent years, Shiseido, L'Oreal and other major giants in Europe, the United States, Japan and South Korea entered the game in the clean beauty market. For example, Drunk Elephant acquired by Shiseido in 2019 focused on clean beauty makeup entered the Chinese market in September of the same year. Currently, in Drunk Elephant's flagship store in the Chinese e-commerce platform Tmall Global, the highest sales of its product is Drunk Elephant B-Hydra Intensive Hydration Serum which is priced at $59 with the total sales volume of 20,000 +. L'Oreal has also made a commitment to shift to clean and sustainable beauty by 2030 with 95% of its ingredients coming from renewable plant sources.
And for the popular sector of clean beauty, Chinese companies are also taking advantage of the trend. However, there are not many Chinese brands that focus on clean beauty, such as My ClorisLand, LAN and Dewy Lab. But their brand proposition and product performance are all noteworthy. It is reported that LAN has completed two rounds of financing in the past one and a half years with a total of $29.6 million for product development and brand system improvement. As for Dewy Lab, the highest-selling product in Dewy Lab's official flagship store on Tmall is Dewy Lab concealer palette. It is priced at $27.9 with total sales of 100,000+.
The entry of Mamonde into this promising clean beauty market may indicate the brand's intention to reverse its unfavorable situation in China. In fact, in recent years, the performance of Korean cosmetics in China has been declining year by year. According to the Korea Cosmetic Industry Institute, from 2013 to 2016, the growth rate of Korean makeup exports to China was as high as 66%. But the figure began to decline in 2017 dropping to 20% in 2018 and again to 14% in 2019. Euromonitor International data shows that against the backdrop of the continuous decline, Korean makeup will have a share of only 3.6% of the Chinese market in 2021. Korean makeup in China was initially driven by the trend of Korean and Korean dramas. But Korean companies have not kept up with the changing consumer philosophy in China. Furthermore, the rise of Chinese brands in recent years has led to the decline of Korean makeup in China.
Since its entry into China in 2005, Mamonde has taken the department store channel as its entry point. At the same time, it laid out franchise outlets. With certain advertising campaigns, it maintained high growth in the early stage. Data show that in 2011, Mamonde has 650 department store counters and 2200 franchise outlets in China. As of now, Mamonde's official public account on the Chinese social platform WeChat shows that the brand has registered 345 offline department store counters and 831 Watson's counters. Its parent company, Amore Pacific Group, is underperforming with the latest Q2 earnings report showing a 39% decrease in sales in Asia and a loss of $3.4 million. Mainly due to a decline in the Chinese market, it accounts for over 50% of the Asian business.
China's clean beauty market is promising and has attracted major international brands to enter the market. Amore Pacific branching out its brands to the clean beauty market may intend to ease the group's loss pressure through this sector. But whether Chinese consumers accept it still remains to be seen.
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