P&G believed the competitor was misleading consumers in an advertising campaign which ran during 2012, by suggesting its premium SK-II product was directly comparable to Missha’s ‘Time Revolution, the First Treatment Essence’, which retails at a much cheaper price.
Although a lower court originally ruled in P&G’s favour, an appeal by the competitor brand has now been upheld by the Supreme Court, and the international beauty manufacturer is now required to pay the costs of the legal proceedings.
Details of the claim
Missha launched its product in South Korea in 2011, at a time when P&G’s SK-II treatment was already established in the region.
To mark the launch, the domestic beauty brand ran a campaign which appeared to dissuade consumers from purchasing competitor products: the advertisements stated; “You no longer need to rely on expensive imported cosmetics”.
It also ran a month-long promotion, which allowed consumers to swap an empty bottle of SK-II for a full sized sample of Time Revolution; in its claim, according to The Korea Times, P&G sought $94,000 in compensation for it considered a public comparison of the two products with subsequent damages to its reputation.
The Supreme Court rejected the claim, ruling that because Missha’s campaign lasted only a month, and left it to the consumer to compare the two products, the marketing was not unlawful.
Korea’s cosmetics market
The cosmetics, skincare and toiletries market in Korea is forecast to grow at a compound annual growth rate of 2.4 per cent until 2015 as women's incomes increase, according to the country’s Health Industry Development Institute.
It is a market which remains dominated by domestic brands, many of which recorded double-digit growth in the most recent report by research firm Euromonitor.
Indeed, the firm states, it is fairly unaccommodating to international brands: in 2012, “growth of international players and domestic mid-sized players, which mainly distribute premium brands, contracted or stagnated.”