S. Korean cosmetics retailer The Face Shop

One air-traffic route that hasn’t slowed amid the recession has been the one between Japan and South Korea. In February, Japanese tourist arrivals in South Korea were up 70% from a year ago, accounting for 48% of all visitors. Numbers were also up from China and Southeast Asia. The primary attraction is shopping, especially cosmetics.

Until now, the reason was the exchange rate, with the won tumbling and the yen soaring, making Seoul an attractive shopping destination. Although the exchange rate has since leveled off, South Korea remains attractive for Japanese, who see it as accessible and safe, and because many South Koreans in retail and hospitality speak Japanese.

The most appealing products are cosmetics, with Korean brands such as Missha, The Face Shop, Skin Food and Nature Republic selling high-quality products at affordable prices for Japanese. At the Nature Republic store in the Myeong-dong shopping area, around 80 percent of customers in April were from Japan, according to the JoongAng newspaper.

In February, the Korea National Tourism Organization chose IKKO, a Japanese transgender makeup artist, as an official ambassador. IKKO has advocated Korean cosmetics in the past.

IKKO, makeup artist and tourism ambassador

“Korean women have better skin than Japanese women,” IKKO said when appointed to the role. “I want to introduce the lifestyle of Korean women, who constantly detox their bodies and minds, to Japan.”

It’s not only the government that has wised up to the revenue potential. Retailers in Myeong-dong are adding Japanese- and Chinese- speaking staff and signage.

The most popular product is Korea-originated BB cream, short for Blemish Balm, which was Japan’s seventh most popular brand last year, according to the Nikkei newspaper. Some 2.6 billion yen (US$26 million) of BB cream were sold in Japan after its launch in April, according to its manufacturer, Hanskin. Eyeshadow, mask packs, mascara and lip gloss from mid-to-low range local brands like Etude House and Missha are also top sellers. Their focus on natural ingredients is an added appeal.

Photo: JoongAng newspaper

“Whenever I come to Korea, I buy around 10 BB creams and refrigerate them so I can use them over a year or so,” Japanese tourist Yoko Wada, 22, told JoongAng at a Hanskin store in Myeong-dong. The price is about half that in Tokyo.

With South Korean brands seen as increasingly trustworthy and desirable in Japan, and Japanese consumers being increasingly cost conscious, the opportunities for South Korean cosmetics brands are obvious. The exchange rate advantage they have enjoyed since October is evaporating, so instead of waiting for the Japanese customers to come to them, they will find it increasingly necessary to target Japanese consumers on their home turf.

To request a sample of Five by Fifty’s Korean Beauty Report, 2009, contact us.

Your message here? (AP Photo via The Daily Beast)

Without wanting to minimize the seriousness of the health issues at hand, the reality is that people around the world are considering how to protect themselves. The prospect of having to wear a face mask if Swine Flu continues to spread may be no big deal in Japan and Asian countries that experienced SARS in 2003. However, for consumers elsewhere unused to such things, the face mask poses a serious fashion dilemma.

The result is the mask becoming a canvas for personal expression. Individuals in affected areas who want to be victims of neither health nor fashion have begun to get creative and decorate their masks, as this photo gallery from The Daily Beast shows.

Mint Designs' cheeky chimp face mask

Some manufacturers like Kimberly Clark already put out limited numbers of colorful masks decorated with Disney cartoon characters for children. Japanese brand Mint Designs has fashioned a cheeky monkey-style mask, and artist Yoriko Yoshida was recently inspired to create a set of beautiful, witty and sometimes faintly morbid face mask illustrations.

Mt. Fuji face mask by Yoriko Yoshida

What’s next? The face mask covers the most important area of the body for communication, and the natural target of the eyes of others. So if face masks do become de rigueur in some places for a while (and it’s far too early to say that they will), the blank white space will become a unique marketing opportunity for the right brand with the right design and the right message.

Contact us to find out more.

The latest in a series of mineral water products popular in Korea.

In September, Jinro released Aqua Blue, positioned as a premium grade in its Seoksu mineral water line. The new products come during a time when mineral water sales are booming in Korea as the sale of bottled tea drinks slip.
Aqua Blue is made from desalinated deep sea mineral water extracted from 1,032 meters below the surface or Kangwon Province’s Yang Yang Bay. The water boasts 50 varieties of minerals found in deep sea water, and a pH level of 7.3-8, which is claimed to add in it being easily absorbed into the body. The blue gradation on the bottle is designed to represent the ocean getting darker at lower deepths.

This new premium line comes at a time when mineral water is booming in Korea. Bottled tea drinks, which peaked in 2004 during a wellness trend, with some hit products enjoying 40% sales growth per year, have stalled, and this market is predicted to begin shrinking by 10% per year.

Meanwhile, the mineral water market has skyrocketed from 3.5 billion won ($2.5 million) in 2006, to a projected 4.5 billion won ($3.2 million) in 2008. Many of the popular brands such as Blue Marine, Momejouenmul, and Ulleung Minewater are, like Aqua Blue, produced from desalinated deep sea water. Blue Marine, a premium water line by Lotte Chilsung, is enjoying sales success despite a price of 1,400 won($1) per .5 liter bottle, about 40% more than the market average. Ulleung Minewater sells for 2,000 won for a smaller, 330 milliliter bottle, which was recently redesigned to give it a more premium look.

The move from bottle tea to mineral water might be linked to a recent consumer backlash against genetically modified ingredients, which appear in some tea drinks. Mijin An

Ulleung Minewater is one the more expensive products on the market, as has new package design with a premium look.

Jinro has released a new brand targetting young women.

Jinro, founded in 1924, is the largest producer of soju, a Korean distilled alcohol similar to Japanese shochu and vodka.

This year the company is celebrating several milestones, with the 10th anniversary of the Chamisul, currently the highest selling variety of soju in Korea, and the launch of a new drink, named simply “J,” which targets young women.

Chamisul was launched on October 19th, 1998, when Korean was deeply mired in financial crises. Rather than rely on  traditional advertising, Jinro employed “human bomb marketing,” announcing the new drink by sending representatives directly to bars and hip nightlife spots. Until that time, it had been an unwritten rule that soju contained at least 25% alcohol by volume. Chamisul, targeting a younger demographic, broke this tradition by introducing a milder drink with 23%, which has been gradually reduced over the past decade to the current 19.5%. Since its launch, over 14 billion bottles, which laid end to end, would stretch from Seoul to the southern city of Busan, according to the Jinro website.

The new “J” variety of Jinro was launched September 26, also has a relatively low alcohol content of 19.5%, and is distilled with mineral water extracted from 1032 meters below sea level. The launch was announced through a series of print and TV ads featuring popular actress Song Hei Gyu, and using key words such as slim, trendy, and cool. This and other Jinro products are now prominently advertised as being free of genetically modified ingredients.

September also saw the launch of Aqua Blue, a new mineral water in Jinro’s Seoksu water line. Mijin An

Ten years of Chamisul. The alcohol content has been gradually reduced to 19.5%.

Learn more:
Other Jinro products
Jinro official site (Korean)

Seoul Fashion Week begins today, with top Korean designers presenting their Spring/Summer collections over at the Seoul Trade Exhibition Center (SETEC), Daechi-dong, southern Seoul.

The eight-day event will include two days (October 18-19) of men’s collections from designers such as Chang Kwang-hyo, Park Jong-chul and Song Hye-myung. October 20 with feature an international fashion exchange with shows by designers around Asia presenting shows, as well as London-based team, Steve J & Yoni P, who have worked with British fashion brand Topshop in the past. There will be a fashion forum on the 20th, with a keynote speech on trends and prospects for the fashion industry in Asia by Nicole Fall of Five by Fifty. The week will round out with five dates of womenswear collections from designers such as Song Jain, Gee Choon-hee, and Lee Young-hee.

A sign reading

Signs and packages with smatterings of English have long been ubiquitous in Korea. It seems young Koreans no longer find the attraction of English advertising copy, and marketers have been turning to more exotic languages such as French and Italian.

Samsung

Samsung has released a new line of MP3 player named “La Fleur,” and decorated with floral patterns for a romantic French feel. Restaurants have been adding splashes of Italian, French, and even Latin to their menus, and shop signs in Japanese have been popping up around Seoul.

In shopping streets in the trendiest sections of Seoul, “Sale” signs are nowhere to be found, but there are plenty of “Saldi” signs can be seen in shop windows. “As we carry Italian fashion items, a sign in Italian is a natural choice,” says a fashion shop manager. “A sign in Italian helps convey a chic and high-end image to our female customers.”

Third language marketing strategies appeal to consumer’s desire for products and shopping experiences that are unique, and have appeared only recently as the English abilities of the average Korean have improved in a competitive job market.

Jeongmae Choi

This spring, three high-end jewelry brands, Tiffany, Van Cleef & Arpels and Cartier, held competing exhibitions in Seoul. These events, held in an art gallery, a department store and a national museum, were crowded with wealthy women and art connoisseurs. Koreans heartily embrace Western luxury brands:

• Van Cleef & Arpels’ sales increased by 130% from 2006 to 2007.

• Chaumet’s sales have increased as much as 500% since 2000.

• Tiffany’s sales grow 10-15% every year.

• In one day in 2007, Audi Korea sold 20 units of the R8 luxury sports car, which was all the units allocated to the country for that year.

• Premium home appliances such as Bang & Olufsen audio, Boss home theater and the De’Longhi espresso machine also show a steep rise in sales.

Rich Koreans are spending more on luxury products and services, while middle-class and poor Koreans worry about rising inflation and food prices. This ongoing socio-economic polarization raises concerns that Korea could be divided into three: North Korea, Rich Korea and Poor Korea.

Jeongmae Choi