Estee Lauder has acquired a stake in Korean skincare products maker Have & Be Co. to grow in South Korea’s nearly $600 million online beauty products market. Skincare and fragrance maker Estee Lauder Cos. is making a concerted move to acquire market share in South Korea’s beauty products e-commerce market.
Estee Lauder, No. 73 in the Internet Retailer 2015 Top 500 Guide, purchased an undisclosed stake in Have & Be Co., a Seoul-based cosmetics and beauty products maker that develops the Dr. Jart+ and Do the Right Thing brands of moisturizers and skin renewal products.
Have & Be was started online in 2005 by Chinwook Lee, a South Korean dermatologist. Today the company sells online and in stores in 15 countries, including the U.S. In its core market of South Korea, Have & Be has e-commerce sites for Dr. Jart+ and Do the Right Thing. In the U.S. Have & Be sells through other retail e-commerce sites including Sephora.com.
Estee Lauder isn’t saying much about how it intends to grow Have & Be Co and Dr. Jart+ online, but Dr. Jart+ will remain a stand-alone e-commerce site. “Dr. Jart+ will remain an independent company and it will not be integrated into any ELC operations, including e-commerce,” says an Estee spokeswoman.
But growing online in general and in Asia e-commerce markets such as China and South Korea specifically is a top priority for Estee Lauder. For the 2015 fiscal year ended June 30, Estee Lauder disclosed that e-commerce accounted for 8% of all sales of about $10.78 billion and that e-commerce sales increased year over year by 28%. Based on those metrics, Internet Retailer estimates web sales for Estee Lauder totaled $862.4 million compared with $673.8 million in fiscal 2014.
In China the overall e-commerce market for skincare product sales is projected to grow 41.7% to an $8.36 billion in 2015 from $5.90 billion in 2014, according to research firm Frost and Sullivan. In comparison, in the more mature and concentrated South Korea e-commerce market, web sales for skin care products will grow more slowly, according to research firm Euromonitor International. This year e-commerce sales for skincare and related products in South Korea will reach $594.8 million, up 8% from $550.0 million in 2014, says Euromonitor.
In China in fiscal 2015, web sales for Estee Lauder doubled, the company reports. In South Korea Estee Lauder will use its investment in Have & Be to build market share with an established brand, CEO Fabrizio Freda says. “This investment gives our company a strategic opportunity to develop a partnership with one of Korea’s most promising high-growth skin care brands,” he says.
