Amore Pacific mulls entering the Colombia market
The team charged with this mission is headed up by Changkoo Lee, Executive VP of the group strategy unit with Amore Pacific Global Operations. Cosmetics Design caught up with Lee while he and his team were attending the recent Health & Beauty Expo, held in Bogota last month. We asked what the strategy is all about.
Currently the Colombian cosmetics industry shows plenty of scope for expansion, albeit from a small base. It is currently valued at approximately $3.9bn, but with a projected CAGR of 2.5% the projected value should reach $4.3bn by 2018, giving Amore Pacific no small amount of opportunity.
In the first of a two part article, we look at why the South Korean company wants to expand beyond Asia, and why it is Colombia in particular that seems to have caught the team’s attention.
Colombia looks like a hot contender
Thinking outside of the box, the plan is to firstly identify the best market or markets to enter first and then to find a unique position for the company in that market.
“At Amore Pacific Global Operations our mission is to check the potential in the markets throughout the Americas,” explained Lee.
“We are already strong in the Korea and China markets, but now our new mission is to expand on a global basis beyond these markets. And that’s why we are here in Colombia.”
Part of plans to diversify the business globally
Lee explained how the company’s focus has been in the Asian markets until now, but the next logical step for the development of the business is to diversify into other global markets.
“We have no brand recognition here in Colombia so we will be starting from scratch, but we feel that there is potential here in terms of the market size and the high growth rate and that we should be present in this market, which is why we are here,” he explained.
The team’s global mission has encompassed research on all markets in the Americas in an effort to better understand the region, and thus far there is no firm decision on which market the company will enter first.
However, this is the second research mission the team has undertaken in Colombia, and the feedback about the dynamics of the market is largely positive.
Making notes on Mexico and Brazil
The team has paid significant attention to what is going on in the two biggest markets in Latin America – Brazil and Mexico – but these are established and highly competitive markets. Beyond that, Lee explained that the most interesting markets are Chile and Colombia.
“We are trying to establish which market is the stepping stone or window into the Latin American market, and in terms of the population and economic development, as well as the demographic characteristics such as the middle class, high levels of education and the interest in beauty, Colombia is very interesting. “
In the second of this two-part interview, we look at how Amore Pacific may position itself in Colombia and what categories will be of most interest.