Lotte Duty Free Creates 'Sapphire-Like Cosmetics'... Tackling COVID-19 and Redefining K-Beauty

Interview with Noh Seon-min, Head of Domestic Cosmetics Team at Lotte Duty Free
Amorepacific Anti-Aging Technology + Lotte Duty Free DB Power
One Year of Effort... Unexpected COVID-19 Variable
Marketing Conducted from a Long-Term Perspective

Lotte Duty Free and Amorepacific's joint luxury cosmetics brand 'Siyenu'

[Asia Economy Reporter Cha Min-young] "Through the success of Siyenu, we aim to write a new win-win case of K-beauty where distribution channels and manufacturers coexist harmoniously."

Amid the unexpected adversity of COVID-19 sweeping across the globe, Lotte Duty Free partnered with Amorepacific to launch the luxury cosmetics brand 'Siyenu.' After more than a year of deliberation, this is the first private brand (PB) in the duty-free industry. With the continued demand for young luxury cosmetics in China, they plan to focus intensively on this market and create a new chapter in K-beauty history.

On the 18th, at Lotte Duty Free headquarters in Sogong-dong, Seoul, No Sun-min, head of the domestic cosmetics team at Lotte Duty Free, appeared busy with a tight meeting schedule due to the emergency situation caused by COVID-19. He said, "Korean cosmetics have a high dependency on Chinese consumers, so the impact from COVID-19 was inevitable," adding, "Average daily sales in February dropped by about 70% compared to January."

Noh Seon-min, Head of Domestic Cosmetics Team at Lotte Duty Free, is giving an interview at the Lotte Duty Free headquarters building in Seoul on the 18th. Photo by Lotte Duty Free

First unveiled on the 31st of last month, Siyenu is an anti-aging specialized functional cosmetic brand meaning "the pinnacle of timeless art." Noting the high demand for luxury cosmetics among China's MZ generation (a combination of Millennials and Generation Z), 'serum' and 'ampoule' were selected as the main products. Mask packs were considered difficult to upscale, and the skincare product category had already become a red ocean, so the focus was placed on specializing the main products first. The brand’s main color, 'blue sapphire,' was also a strategic choice to convey both luxury and a youthful vibe.

Despite the unexpected variable of COVID-19, the launch of Siyenu proceeded as planned. Originally scheduled for December last year, the launch was postponed once to January this year due to the need for improvements in the visual merchandising (VMD) section. Since the cosmetics target the young luxury consumer segment, rather than expecting short-term sales growth like general mass-market brands, they plan to steadily increase brand value through collaborations with Wanghong (Chinese influencers) and other marketing efforts.

Team leader No said, "We are focusing on creating a brand that can only be purchased at Lotte Duty Free rather than on profits or sales," adding, "We plan to promote it as the best functional cosmetic." Accordingly, Siyenu is preparing for an official launch event aimed for the end of March, with the exact timing to be adjusted depending on the progress of COVID-19.

Lotte Duty Free intends to develop Siyenu into a brand that offers a 'special shopping experience' at its flagship store in Myeongdong. The Myeongdong flagship store is the number one mega store in Korea in terms of annual sales of 5.7 trillion KRW and 8.3 million customers per year. Cosmetics sales have also seen a vertical rise from August 2018 through the first half of last year. The collaboration with Amorepacific was made possible based on mutual trust between the best and the best.

They drew a clear line not to repeat the precedent of distribution channels rushing into the beauty business, considered as 'golden goose eggs' that lay golden eggs. Team leader No said, "We first considered a PB in 2015, but we saw that distributors who jumped in with only low prices such as 'cost-effectiveness' failed to capture customers' hearts," explaining, "I believe a win-win is possible between Amorepacific, which has the best technology, and Lotte Duty Free, which has marketing know-how."

He continued, "We have incorporated Amorepacific’s anti-aging technology, the best in Korea, into the product, and now we want to sell it well at duty-free stores," raising his voice, "Although the popularity of Korean cosmetics has declined in China, we will do our best to create a good win-win case with new capabilities."

This content was produced with the assistance of AI translation services.