South Korea is generally regarded as a global pioneer of cosmetic innovation, setting the trends that the rest of the world will soon follow. Its skincare innovation alone is cutting edge, South Korean women typically follow an 11 step skincare regime, focused on health, hydration and a preferred lack of pigment – something the West is waking up to after years of sun destruction. Products are highly sophisticated, efficacious as well as innovative and in cute packaging and formats, a key trend!
No wonder then, that Unilever, who have repeatedly stated their acquisition-led expansion strategy in personal care, were keen to snap up a majority stake in the fastest selling skincare business in the fourth largest skincare market – Carver Korea, for $2.2 billion. Acquired from a consortium of Bain Capital Private Equity and Goldman Sachs, who themselves only acquired 60.39% last year for roughly €421 million. A nice profit!
Carver Korea was founded in 1999 originally as an aesthetics company supplying professional products to beauty salons. Its flagship brand A.H.C (Aesthetic Hydration Cosmetics) is focused on anti-aging and hydration and nourishment, two key trends in the global beauty world, and is promoted by a number of South Korea’s most popular celebrities. Carver is the number three brand in the market, but the brand has seen exponential growth in the last five years, with sales worth €321 million last year alone, and a quadrupling of net profit to €98.5 million. It exports to over 11 markets, including the US and China, where it’s hugely popular due to its use of natural ingredients. China is the largest and fastest growing beauty market in the world, according to Euromonitor.
The company is an ideal fit with Unilever’s existing business. “[Carver Korea] is an impressive business that is completely aligned to our personal care strategy,” says Alan Jope, Unilever president of personal care. “It will significantly strengthen our position in north Asia, the largest skincare market in the world, and will complement our existing portfolio, enabling us to offer luxury skincare products at attainable price points.”
The Asian cosmetics market is booming, largely driven by a growth in premium products due to a rising middle-class population with increasing disposable income who are demanding higher quality products. A trend that looks set to continue with 58% of the world’s population forecast to be middle class by 2025, versus 25% in 1995, according to Ogilvy’s “The Velocity 12 Markets” report.
South Korean beauty brands in particular are in huge demand. Skincare sales alone in South Korea are forecast to reach €5.3 billion in 2017, while the South Korean beauty and personal care market has grown faster than the global average over the last five years.
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