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Hera Case Study: Amorepacific Is Bullish on Amazon

July 02, 2021 Faye Brookman
July 02, 2021
Hera

Amorepacific's recent US launch of Hera underscores why Amazon is attractive for the South Korean beauty giant. Hera debuted in March on Amazon initially with a lip collection and has already broadened the assortment.

Ranked as the 16th-largest global beauty company with estimated sales of more than $4 billion by WWD, Amorepacific has been expanding more of its portfolio via the online powerhouse over the past few years.

For example, Amorepacific and a recent US transplant, Mamonde, launched full ranges on the Amazon Premium Beauty store last year. Enough Project, Bros&Tips, and Rarekind are also on Amazon. Many of Amorepacific's other brands, such as Sulwhasoo, Laneige, Innisfree, and Iope are also available on Amazon either directly from an Amazon store or through third-party sellers.

Hera is a case study of why Amorepacific likes the platform. The push to bring Hera to the US came from continuous requests from global consumers to make the luxury brand that debuted in Korea in 2015 to the US. "With the brand's awareness and reach continuing to grow, it helped in the decision to focus on the US market in 2021," says Sohui Park, Sales Manager, Global E-Commerce Team, Hera.

For a high-growth brand there's only one thing worse than not being on Amazon, that's not owning your brand's presence.
By Alex Beer, Co-Chief Executive Officer and cofounder, Fortress Brands

The loudest requests were from Amazon customers. "The Amazon community was vocal in wanting Hera to be available on the platform. Our lip line and foundation lines have been very well received by US Amazon shoppers. In particular, the Sensual Spicy Nude Gloss has become the best seller and topped the Amazon list of its category since its launch in March," explains Park.

Beyond moving products, Amazon serves up rich consumer shopping trends. "K-Beauty is a hot category on Amazon and since more and more people tend to shop on Amazon, we deemed it a great channel for us to test and accumulate consumer insights from the US market in order to understand our consumers better," Park says. Launching on an official store on Amazon, she adds, protects from counterfeits. "People have a trusted channel to buy authentic Hera products."

While Amazon has done heavy lifting to halt fake or unauthorized products, the issue remains. "For a high-growth brand there's only one thing worse than not being on Amazon," says Alex Beer, Co-Chief Executive Officer and cofounder of Fortress Brands. "That's not owning your brand's presence."

Amorepacific hasn't had to worry about one thing that hamstrings beauty sales on Amazon—reviews. Reviews on Amazon are mostly five stars across the board on most of the company's brands.

Whether prescient or just lucky, Amorepacific's strategy to pull back on physical stores in favor of Amazon looks pretty savvy following COVID-19. With many physical stores shuttered, Amazon's share of beauty swelled.

At the height of the K-beauty boom in 2015, Amorepacific projected to have more than 100 Aritaum doors in the US. The company spruced up the stores and converted existing ones from the former Amore logo as a showcase for all of its brands under one roof. Amorepacific has since trimmed its physical stores, and there are now only 52 Aritaum stores listed on the company's website, down from 75 six years ago.

The company also trimmed its Innisfree store portfolio. Dovetailing what that, many of the prestige stores that sell its brands, such as Sephora, which has Sulwhasoo, were closed for some of the past year. Building online, especially Amazon, helped offset some of the decline in sales from physical doors. Online was also important in its home market where online sales jumped 50%. Amorepacific's worldwide beauty sales, however, were estimated to have declined almost 22% between 2019 and 2020 and dipped almost 18% in North America, according to WWD. Sales were also hampered by the reduction in international travel.

Amazon accounts for more than one-third of all online beauty product sales, and the category is the third fastest-growing on the platform, according to eMarketer. Interest in online sales is expected to stay buoyant. The 48-hour period during Amazon's Prime Day saw online volume jump 6.1% to more than $11 billion, according to Adobe Analytics (which also included results from Walmart, Target, Best Buy, and Kohl's, who offered competing offers to Amazon).

Other prestige brands that scoffed at selling on Amazon just two years ago are now fans, such as Caudalie and Dermalogica. Capturing even just 1% of the $386 billion in sales Amazon registered last year (a 40% year-over-year increase) can translate into significant revenue for beauty brands. Brands also gain access to valuable sales data and can leverage that knowledge to formulate positioning, marketing, and development strategies.

With beauty gaining traction on Amazon, especially with Gen Z and Millennial shoppers, Hera is expected to generate interest thanks to K-pop group Blackpink's Jennie Kim. She's been the brand ambassador since 2019 and she is linked to many of the items as "Jennie Picked."
K-pop has been embraced in the US through groups like BTS and Blackpink. "Blackpink's Jennie is the epitome of 'Seoulista' which aligns with our brand image. She is dynamic in her style and can handle all looks," says Park, noting Kim has international influence. In a recent virtual concert, Kim wore Hera's Rouge Holic lipstick.

Hera has been selling well on Amazon, with its lip products often selling out, says Park. The best sellers include the Sensual Power Matte and Sensual Spicy Nude Gloss. "We also see much potential in our foundations, as well," she says. The brand also had a big push on Prime Day. There are currently no plans to add brick and mortar at this stage, according to Park.

Emboldened by success since March, Hera recently expanded beyond lip products with facial items. One of the heroes is Hera Black Foundation ($67.99), a concealing, oil-controlling liquid foundation that lasts 12 hours and helps wearers to achieve a semi-matte look without it feeling heavy on the skin. The formula features a "magnet-fit covering technology" to keep the foundation color fresh all day without needing to reapply It also contains hyaluronic acid, raspberry, and rose to lock in moisture. The new assortment is rounded out with a foundation brush, priced at $44.99, a setting mist for $36.99, and a cleansing foam also retailing for $36.99.

In July, Hera will be launching its Sensual Fresh Nude Tint lip gloss on the Hera US Amazon store, with the tagline "Beyond Naturalness Beyond Sensuality." The tint features Magnet Fit Pigment Powder technology to seamlessly blend on lips.

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