L'Oréal keeps door open for more K-beauty acquisitions

L'Oréal S.A., the leading global cosmetics maker, is considering more acquisitions and partnerships in the beauty sector of South Korea, the world’s fourth-largest makeup product exporter with competitive manufacturers and trend-setting innovators for future growth, its executives said.

South Korea plays a key strategic role in North Asia, which generates about 30% of the total sales of the beauty giant, as the country has an advanced ecosystem with biotechnology and bioinformatics, they told reporters in Seoul on Friday.

“We are always everywhere in the world looking at opportunities obviously the sector of the acquisition,” Fabrice Megarbane, L'Oréal president for North Asia said at a press conference to mark the 30th anniversary of its business in South Korea. “K-beauty is definitely a place where we are looking actively as well when it comes to acquisition.”

The French company acquired South Korean online beauty e-commerce operator Stylenanda including its cosmetics brand 3CE for 500 billion won ($389.2 million) in 2018.

L'Oréal has seen success with 3CE in North and Southeast Asia, Megarbane said.

“We think that there is still a lot of potential behind this brand,” he said, without offering any details such as names of brands or companies.

South Korea is a key growth engine for North Asia whose customers are innovative and savvy enough to lead and inspire the global beauty trend, he said.

MORE COOPERATION

L'Oréal is seeking more cooperation with South Korean companies for future growth, said Samuel du Retail, CEO of its business in the country.

“It has a strong beauty ecosystem powered by some of the world's largest ODMs and a rich innovation ecosystem for biotechnology and beauty tech,” du Retail said, referring to original design manufacturers. “With this setup, we have the right ingredients to influence and inspire our beauty and innovation here in Korea in North Asia and the world.”

L'Oréal’s innovation center in South Korea has developed popular products in North Asia. Yves Saint Laurent Beauty’s Touche Éclat Glow-Pact Cushion topped the list of the region’s best-selling items in the category as of the second quarter. Lancôme’s Clarifique Pro-Solution Serum ranked No. 5 on the best-selling brightening serum table during the period.

The company has been already expanding partnerships with South Korean companies such as oil refiner GS Caltex Corp., cosmetics ODM Cosmax Inc. and Kakao Healthcare Corp. to develop raw materials and technology.

L'Oréal has been enjoying K-beauty’s strong growth in the world since Ginna Jun, a popular South Korean actress, wore Yves Saint Laurent Beauty’s lipstick on global-hit K-drama "My Love from the Star" in 2014. Jun had the role of Cheon Song-yi, the heroine of the series.

Write to Ji-Yoon Yang at yang@hankyung.com
 

Jongwoo Cheon edited this article.