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Influencer marketing

Cosmetics brands shift to video influencers from celebrities

Influencer video platforms enjoy soaring valuations with investments from cosmetics firms and retailers

By Dec 03, 2021 (Gmt+09:00)

An audition program for content creators hosted by Leferi, a video influencer marketing firm (Courtesy of Leferi)
An audition program for content creators hosted by Leferi, a video influencer marketing firm (Courtesy of Leferi)

 
As influencers on YouTube and social media platforms are becoming central to the marketing efforts of companies, South Korean cosmetics brands are stepping up efforts to find and train influencers or content creators, instead of relying on celebrity marketing.

AmorePacific Corp., the country's No. 1 cosmetics company, is preparing audition programs in a project worth about 20 billion won ($17 million) to nurture new influencers regardless of their nationality, according to the cosmetics industry sources on Dec. 2.

The influencers who pass the auditions will be tasked with creating video content for AmorePacific's products, targeting both domestic and overseas consumers. 

LG Household & Health Care Ltd., a leading Korean beauty product brand, started the "Natural Beauty Creators" program in 2018 to nurture influencers, through which over 100 content creators have debuted up to now.

The program offers tuition-free education about shooting and editing videos, as well as giving away LG's beauty products. LG expects their pieces of video content will help significantly promote its products.

CHANGE OF COSMETICS MARKET TRENDS

As post-purchase comments by online influencers became a key factor that influences consumers' buying decisions, the era of celebrity marketing appears to have come to an end.

Instead of being captivated by the products endorsed by celebrities, consumers now keep their ears open to video influencers who go into details about the ingredients, functions and colors of products. 

The rise of live e-commerce platforms as a new retailing channel is behind the companies' shift toward the influencer marketing scene, targeting consumption-oriented MZers, or millennials and Generation Z.

Consumers' reliance on video influencers has increased further in the prolonged pandemic situation, where in-store experience such as makeup tryout was restricted.  

"An increasing number of consumers are buying cosmetics products on live commerce platforms after confirming their colors and ingredients from YouTube videos," said a cosmetics industry source.

Content creators selling cosmetic products, scarves and handbags on DMIL platform (Courtesy of DMIL)
Content creators selling cosmetic products, scarves and handbags on DMIL platform (Courtesy of DMIL)

According to the Korea Trade-Investment Promotion Agency and Nasmedia, a digital marketing company, South Korea's influencer marketing segment is estimated to have expanded to 2 trillion won in 2020, about a tenfold growth compared with 200 billion won in 2016.

INFLUENCER MARKETING STARTUPS

Accordingly, Korean startups such as Leferi and Different Millions (DMIL), which manage beauty influencers and connect them with marketing and e-commerce players, saw their valuations soaring.

Leferi is the country's first and largest influencer management firm, managing 280 content creators. It has established a so-called influencer value chain, where it trains influencers who take charge of product planning to marketing and selling.

It received 10 billion won in investment in 2019 from GS Home Shopping Inc., a leading home shopping channel in South Korea and other investors at a valuation of 65 billion won. 

Another influencer video platform DMIL attracted 15 billion won in Series A funding from AmorePacific and Hyundai Home Shopping Network Corp. in 2020. DMIL boasts about 700 partner creators who have 25 million followers in aggregate.

As a multi-channel network (MCN) that works with other video platforms, DMIL collaborated with 500 brands, including foreign companies, and created 4,000 pieces of video content for their products.

Recently, it launched an e-commerce app dubbed Millions in cooperation with AmorePacifc and Hyundai Home Shopping, as well as with Microsoft Korea. The app analyzes and compares the ingredients and prices of cosmetic products.

Going forward, DMIL will expand its territory into the private labels market, rolling out beauty products under its own brand name, while offering tailored recommendations to customers, according to the company.

Write to Jong-kwan Park at pjk@hankyung.com

Yeonhee Kim edited this article.

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