Sephora, a world-renowned beauty retailer, is set to enter the Korean market.
Sephora Korea announced on April 15 that it would open its first domestic store in Parnas Mall, Gangnam-gu, on Oct. 24. Sephora Korea said it plans to open six stores, including an online store, in Seoul by 2020, with seven more to be opened by 2022.
Sephora decided to advance into the Korean market as consumer interest in multi-brand distribution channels is growing. Its differentiation points are a prestige brand product lineup including exclusive brand products that can be purchased abroad only and omni-channel services that are available both on and off line. There are also a number of Korean consumers who ordered Sephora products from overseas, so some analysts say that Sephora will be able to land smoothly in Korea early.
However, business conditions in Korea are not so favorable for Sephra as the domestic beauty market has been slumping since 2016, and some experts say Sephora’s merits are no longer merits. Actually, Euromonitor International says that the sales volume of Korean beauty specialty stores fell to 3.57 trillion won in 2017 and 3.21 trillion won in 2018 after peaking at 4.0 trillion won in 2016.
Consumers in Korea are able to purchase Sephora’s private brand (PB) products which Sephora promotes as its main weapons by ordering them from overseas and the Korean beauty care market is crowded with online shopping giants. Hong Kong's Watsons that tried to expand its presence in Korea with its PB products, failed to appeal to Korean consumers and withdrew from the Korean market.