The History of Whoo, a premium cosmetics brand of South Korea’s LG Household & Health Care Ltd., which had annual sales of 203.7 billion won (US$181.55 million won) in 2013, achieved the 1 trillion won sales milestone in 2016 and then it has become the first South Korean cosmetics brand that exceeded 2 trillion won (US$1.78 billion) in sales this year. The cosmetics industry, which still suffers from the aftermath of the US anti-missile system known as Terminal High Altitude Area Defense (THAAD), has written “History of King” despite the sluggish market as a whole.
The History of Whoo was launched by LG Household & Health Care with the motto of “luxury herbal-based skincare brand” in 2003. There was no big difference from Sulwhasoo, which came out first by Amorepacific Group, until this point. The sales of The History of Whoo stood at 10.3 billion won (US$9.18 million) when launched.
LG Household & Health Care Vice Chairman Cha Suk-yong, who took office in 2005, said, “We need to differentiate it as a royal cosmetics brand symbolizing hallyu from global brands, beyond a herba-based skincare brand.” His words changed the fate of The History of Whoo.
The new strategy was transplanted into the Chinese market the next year when LG Household & Health Care first launched the brand in the country. LG Household & Health Care pursued “premium strategy” and “VIP marketing strategy” in its Chinese cosmetics business. The company’s strategies worked as Chinese women saw their level of income increase and increasingly prefer high-priced high-end products.
In addition, LG Household & Health Care increased the number of stores at major department stores in major cities and bases in China. The company opened the store mainly in high-end department stores in major cities in China, such as Babaiban in Shanghai and SKP in Beijing, and increased the number of stores from 47 in 2012 to 203 now. It also carried out various marketing activities to target the top 5 percent of customers in China, including beauty events for VIP customers at five-star hotels.
LG Household & Health Care focused on branding a royal image into its products. The herbal medicine research center of The History of Whoo actually applies herbal medical prescription for the royal family to many products of the brand after analyzing tens of thousands of royal medical books. The company also designs packaging with the motif of actual royal cultural heritage, concentrating on delivering stories rather than visual splendor
Amorepacific Group’s Sulwhasoo surpassed the 1 trillion won (US$891.27 million) mark in annual sales for the first time. Sulwhasoo, which was launched in 1997, exceeded 100 billion won (US$89.13 million) of sales in 2000 and was the first firm joining the 1 trillion won club in 2015. The History of Whoo and Amorepacific’s Innisfree surpassed 1trillion won (US$891.27 million) of sales the next year.
However, The History of Whoo is the only skincare brand that has shown a clear growth since then. The sales of K-beauty products peaked in 2016 thanks to Chinese tourists, commonly known as youker, but the domestic cosmetics industry was caught in the mire of stagnation due to the THAAD issue. However, there was no recession for The History of Whoo which has been building a high-end image.
The History of Whoo, which is only firm putting up a good show, is now aiming at global brands. Its sales amounts to 3 trillion won (US$2.67 billion) this year based on retail price, which is comparable to those of the top three global luxury cosmetics brands, including Lancome with 5.3 trillion won (US$4.72 billion), Shiseido with 4.7 trillion won (US$4.19 billion) and Estee Lauder with 4.4 trillion won (US$3.92 billion). The History of Whoo is planning to increase the number of stores not only in China but also Taiwan and Hong Kong and accelerate targeting VIP customers in Southeast Asia next year.