Revlon, Inc. was founded in 1932 and is an American multinational fragrance, cosmetics, personal care, and skin care company. The company operates under three key strategic pillars that are aimed to drive its future development and growth. First, it aims to strengthen its brands by creating relevant portfolios for its products as well as through innovation. Second, the company aspires to build its capabilities through effective communication with its customers and third, it aims to ensure that its products are available for its clients, both online and in-store (Revlon, Inc., 3). South Korea is viewed as a leading economy in the Asian region, with outstanding growth experienced in ICT and electronics industry. This research paper will highlight the reasons why it is of high significance for the firm to expand into the South Korean beauty market.
Revlon, Inc. should expand to the South Korea market since it provides a huge economy in the Asian market. It is basically the fourth largest economy in the region and ranked 11th globally. Furthermore, it is amongst the fastest growing nations after the Great Recession-making it be listed among the 11 nations that are considered to dominate the global economy in the mid-21st century (Www.globaltenders.com, 1).
It is a successful market in the beauty sector as evidenced in the 2017 beauty per capita spend globally. For instance, its beauty per capita spend in 2017 was about $45. This was much higher compared to the values retrieved from the U.K, U.S, and the global average beauty per capita spend of $43, $37, and $21 respectively. By the end of 2020, the Compound Annual Growth Rate (CAGR) is expected to be 8.1%, with the beauty sector predicted to be worth $13 billion and expected to increase by $2.8 billion by 2020 (Chitrakorn, 2). It provides among the world’s leading beauty market in the world, and thus, it is a critical market for cosmetics, fragrance, and skin care firms like Revlon, Inc.
The International Market Advisor (5) notes that the population of South Korea, especially the youths in their 20s and 30s comprises of cultured, prosperous, and globally informed customers who yawn to experience the emerging fashion trends and products. They tend to associate higher prices and imported brands to high quality. Furthermore, they will give more emphasis to a brand’s nation of origin, particularly preferring beauty products imported from the U.S and European nations over Asian imports. Culturally, being associated with luxurious brands is a mark of a higher social status and wealth. Consequently, the nation provides a highly skilled source of human resource created by an efficacious learning system, a high quality infrastructure, and a solid banking system.
For multinational firms like Revlon, an approximately $289.1 million organization (Revlon, Inc., 13), South Korea is a lucrative market for beauty products. This is because of the spending power of its consumers as well as its tourism status, particularly for other Asians like the Chinese clients who spend approximately $73 billion annually (approximately a third of the world’s spending power). In respect to these figures and advantages, the future for the industry seems to be lucrative and legit, and thus, Revlon, Inc. should consider investing in the country.
Chitrakorn, Kati. "Why International Beauty Brands Are Piling into South Korea." The Business of Fashion, 19 Dec. 2018, www.businessoffashion.com/articles/beauty/why-international-beauty-brands-are-piling-into-south-korea. Accessed 11 Nov. 2019.
International Market Advisor. "Doing Business in South Korea Guide." http://www.southkorea.doingbusinessguide.co.uk, 2014, www.southkorea.doingbusinessguide.co.uk/media/769230/South_Korea_Guide_Brochure.pdf. Accessed 11 Nov. 2019.
Revlon, Inc. "REVLON 2018 ANNUAL REPORT." https://investors.revlon.com, 2019, investors.revlon.com/static-files/adeabe36-437f-4661-8fe9-316ef5b8a43a.
Www.globaltenders.com. "South Korea Economy South Korean Economy, Business Opportunities in South Korea Government South Korea Business Opportunities Import and Export Opportunities." Global Tenders Bids Global Tender Public Tenders, Private Tenders Bids and Rfps Tender Notices International Competitive Bids Usa Rfp India Rfq Europe, 2019, www.globaltenders.com/economy-of-south-korea.php. Accessed 12 Nov. 2019.