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Who Needs the Chaebol Anyway?

Global 2003-09-04

Korea's midsize companies are finally coming into their own an omission of interior parts; Most of the midsize leaders had to learn some tough lessons before finding their way. Cosmetics maker AmorePacific Corp., for instance, tried to follow the footsteps of the chaebol, expanding into electronics, advertising, and financial services. But when Estée Lauder, L'Oréal, and Chanel began to unseat its brands at Korean department stores, AmorePacific managers refocused their business on health and beauty -- cutting the number of affiliates to 6 today from 23 in 1991, and slashing the workforce to 4,500 from 12,500. At the same time, AmorePacific brass knew they needed to expand overseas to grow. So in 1997, they started a push into France, and by last year, the company's Lolita Lempicka perfume commanded 2.6% of the tough French fragrance market -- making it the fourth-biggest seller in the country. Now, the company is launching a line of skin-care products in the U.S. and hopes to increase overseas sales to $150 million by 2005, from $60 million last year. "Global growth is the key to our future success," says Baek Jeong Gy, senior vice-president for corporate strategy at the company. - By Moon Ihlwan in Businessweek Seoul