Olive Young is an icon in Korea’s beauty industry. It operates over 1300 stores and sells both manufacturer brands plus in house developed marques.
Founded in 1999, Olive Young now has a commanding 15% of Korea’s beauty market.
K-Beauty has extraordinary global influence. One reason is innovation, think sheet masks or cushion compacts, another the cultural impact of K-Pop or K-Drama. In a world where authenticity and simplicity is valued, K-Beauty is renowned for natural ingredients and gentle formations.
Olive Young’s product and brand development capabilities are strong, brands like Bioheal BOH, WakeMake and BringGreen have gone from mere private labels to fully fledged brands, sold online globally.
Earlier this year Olive Young announced plans to expand its business in Japan.
Japanese customers tend to expect higher quality than other shoppers do, often conducting unusually thorough testing and research before committing to a brand.
Shin Eun-yeong, senior vice president, Olive Young
Several Olive Young brands are sold in specialists like Loft and @Cosme, Japan’s top online site that also has some physical stores.
According to retail audit company, Intage, Korean beauty products have around 3% share of the Japanese market currently. In base make up their share is higher. Whilst these numbers sound small, the entire beauty category is worth over $15b according to numbers I’ve seen.
Unlike the food industry where there are very few big foreign brands, there are more in the Japanese beauty industry. France’s L’Orėal is a big player not to forget Nivea or P&G. Lush from the UK started in Japan in 1999, and now has over 100 outlets. Thailand’s Cathy Doll has a following and is currently listed by Donkihote.
Olive Young’s Korean rival, the Face Shop, has several stores in Tokyo but seems to have hit a plateau.
Personally I find Olive Young stores easier to navigate than many Japanese drug stores, which tend to have thousands of SKUs packed into every aisle. I also like the Olive Young brand name which evokes stronger natural and holistic connections than a “Sugi” or “Matsukiyo” (yes even for Japanese it’s a mouthful to pronounce).
We know that Olive Young has set up an entity here and now await to see what shape the business will take. Do they go for the mass market to stay focused on tourist areas leveraging their brand’s latent awareness? Will the range be entirely female focused or can they differentiate further with some male K-beauty products?
Loft seem to believe this is an under exploited segment.
