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Announcement on Business Strategy for the Growth of Global Prestige Brands

Global 2010-06-28

In a media conference at Grand Hyatt Hotel in Hong Kong on May 15, AMOREPACIFIC Corp. (President and CEO, Suh Kyung-bae), a leading company in domestic beauty & health market, announced major overseas business results and a future business strategy for the growth of its global prestige brands to achieve its vision toward "Global Top 10 Companies in 2015." 
- "We'll pave "our Asian Beauty Road" to create the essence of Asian esthetics primarily around advanced beauty market." 
"AmorePacific has been committed to beauty & health business on the basis of Asian profound wisdoms about nature and mankind over last 6 decades, and is now meeting customers worldwide across Pacific Ocean through our global brands, while searching for ways to communicate with them in a language of "Asian beauty," said President Suh Kyung-bae in the conference, "We are the pioneer of Asian Beauty Road and will make a channel to deliver our own Asian beauty to create its essence around the world." 
And he stated in a determined way, "Korean global brands have converged on specific industrial sectors including electronics, automobile and construction, but fashion and beauty industry have often limited to market in particular advanced countries or have not succeeded to create strong brand power beyond Korea, despite their high effects on creating added values. AmorePacific will make an effort to create a proud global brand to stand for Korea and create Korean Premium as well." 
- Turn global economic slump into a chance for our further leap, and strengthen the brand premium of AmorePacific with its differentiated strategies for each market
President Suh also emphasized, "We'll take current global economic slump as an opportunity for our further leap, and differentiate our business strategy for each market to strengthen the brand premium of AmorePacific - aggressive growth strategy for Asian and emerging markets in parallel with brand convergence strategy to maximize our high-quality images in advanced markets. Especially, we'll place our prestige brands like "Sulwhasoo" and "AmorePacific" strategically on the front of advanced beauty markets including Hong Kong, Japan and USA, aiming ultimately to realize remarkable business growth of reputable global brands." 
Japan, Hong Kong and USA are representative advanced beauty markets crowded with worldwide beauty care brands. There are great implications as strongholds of "Asian Beauty Road" to enhance AmorePacific's brand competitiveness and expand its impact on neighboring markets. AmorePacific has already launched its flagship brand AmorePacific in advanced cosmetics markets, USA in 2003 and Japan in 2006; and has discovered the growth potential of AmorePacific as a global high-end brand. The brand performance has been gradually more visualized. Besides, it has released a Korean reputable cosmetics brand Sulwhasoo in Hong Kong in 2004 to demonstrate esthetic superiority of Korean medicinal herb. 
As a part of detailed strategy for growth of its global prestige brands, AmorePacific plans to open Sulwhasoo SPA at a grand flagship shop in Hong Kong in coming June and provide customers with high values of Korean traditional herb esthetics, plus exquisite services to enhance its brand loyalty of Sulwhasoo. At the same time, AmorePacific will advance into American market on a full scale through its initial placement in American premium department stores in the first half of 2010, and will also advance into a channel of Chinese premium department stores in the second half of 2010. Starting with these entries, it will take a leading initiative of globalizing Korean traditional herb medicine and establish a solid foundation of "unique premium brand unmatched by any other brands" in the heart of women around the world. 
Particularly, a flagship brand AmorePacific has recorded wonderful results of highest sales growth rate in a super-premium department store favored by high-class consumers in the US. In March, starting with placement in 16 shops of Sephora, a worldwide cosmetics distribution chain, AmorePacific accelerates propagating its brand awareness as a prestige brand into the world. And it has gained a foothold to target advanced markets on a full scale by additional placements of 4 shops across Japanese super-premium department stores during the first half of this year in Japan. 
Meanwhile, Chinese speaking areas are a typical emerging market with a key part of growth potential for overseas business of AmorePacific, and also bring outstanding results to the company. Last year, AmorePacific has achieved 60% higher business growth in Chinese market on year-to-year basis primarily owing to Laneige, a brand attracting the heart of Asian women, and Mamonde, another brand that aggressively expands its shops in the market. This achievement has great implications in that it came from high growth of sales and profit despite the decelerated domestic growth in China due to global economic slump. Keeping business growth high in Singapore and Taiwan beyond China, AmorePacific plans to achieve sales revenue of 400 billion won across Chinese speaking areas in 2012. 
- "We'll do our best to fulfill our duties and qualify for global corporate citizenship to communicate with world customers." 
"For true and open-hearted communication with our world customers, AmorePacific has to conduct in-depth studies on them and make more efforts to understand their needs. And we also need to practice green and philanthropic management with corporate responsibility for mental prosperity of global customers, and transform into a global corporate citizenship to carry out our social duties for mankind," emphasized Mr. Suh. 
In 1993, AMOREPACIFIC Corp. has already declared a motto of "unlimited corporate responsibility" for environment to keep true health and beauty of customers, and has been implementing green management to minimize potential environmental impact of every business processes from product development, manufacturing, distribution, consumption through disposal. Particularly, AmorePacific is the only cosmetics maker that has reclaimed and cultivated about 3.31 km2 of wasteland into green tea farm over last 3 decades. By achieving outstanding results in reducing CO2 emissions, it has taken a step forward to cope with global climate change. And the company plans to establish a new green plant in Osan, Gyeonggi province for completion by 2011 and acquire eco-friendly production system to establish a foundation of sustainable management on a global standard. Also in November 2007, AmorePacific became the first domestic cosmetics maker that has joined the UN Global Compact (UNGC), an international agreement to facilitate voluntary social responsibility of corporations, and has been implementing sustainable management. 
Additionally, AmorePacific keeps in mind a strong pledge to repay love to customers and continues to participate in a variety of social contribution activities including Pink Ribbon Campaign, MAKE UP YOUR LIFE Campaign, AmorePacific Woman Scientists Award, Hope Store and Donation for Helping North Korean Children in Need. Among others, AmorePacific is a leading domestic cosmetics maker in participating in Pink Ribbon Campaign, a global campaign for improving prevention awareness of breast cancer, and tries to improve women's health and mental prosperity by conducting MAKE UP YOUR LIFE Campaign with a view to inspire woman breast cancer patients with their positive minds on life in beauty care of their appearance.