The new firm called Shiseido Korea Co., Ltd. was officially established Aug. 1 and will start operations in September. Among the lead investors in the venture is Sung-Whan Suh, chairman of Korean cosmetics maker Pacific Corp, whose subsidiary Youmee Cosmetics Inc. has been selling Shiseido cosmetics in Korea until now.
Shiseido said it is stepping up its operation in South Korea with the new venture because of the expanding cosmetics market in the country.
"In 1996, (South) Korea was the largest cosmetics market in Asia after Japan, with sales of approximately $3.2bn (based on factory shipments), a 12% increase over the previous year," Shiseido said.
The prestige cosmetics market in department stores grew more than 50% in 1996, due to strong marketing activities by leading international manufacturers and Korean women's increased interest in high-class products.
Currently, Shiseido products are sold at 25 department stores throughout Korea. Recently, the company's business in Korea has undergone huge expansion - net sales on a wholesale basis in South Korea for 1996 were at about $8.5m. For the new venture, Shiseido has set a sales goal of $32.2m by 2000.
The new company will have capital of $7.28m, with Shiseido holding a 60% stake in the venture.
The chairman of the new company, with a workforce of 110, is Byung-Chul Park, the former president of Youmee Cosmetics. Koji Uchino, the former general manager of Shiseido's International Business Department, is the venture's president.
Copyright August 1997, Crain Communications Inc.