Amusing move: Shinsegae’s AMUSE acquisition represents efforts to expand globally, improve profitability

The South Korean company manages a diverse portfolio of high-end fashion, beauty and lifestyle brands, including beauty brands such as Diptyque, Hourglass, and Oribe.

It also has launched own its own brands YUNJAC and VIDIVICI and acquired luxury beauty brands such as Swiss Perfection and Poiret.

On August 2, Shinsegae announced that it had acquired a 100% stake in colour cosmetics brand AMUSE for USD51.6m.

“This is a very strategic acquisition by Shinsegae, a company which has historically had a strong portfolio in the luxury space. AMUSE represents a shift in focus for the portfolio, being a mass market offering with lip tints – the brand’s signature product – starting from around KRW20,000,” said Lauren Lee, founder of K-beauty distributor and consultancy StyleStory and the beauty brand Jelly Ko.

Founded in 2018, AMUSE is a vegan beauty brand with a strong fan base among Generation Z consumers with products such as the lip product Jel-Fit Tint.

“The acquisition makes sense when you consider AMUSE’s popularity among Gen Z, its strong appeal overseas and significant presence on social media platforms,” ​said Lee.

The brand has over 320,000 followers on Instagram and over 100,000 followers on TikTok.

“Virality on social media has become an important battleground for beauty brands,” said Lee.

According to the firm’s statement, AMUSE has achieved a five-year compound annual growth rate (CAGR) of 176%. It recorded an annual revenue of USD26.6m last year and USD18.4m revenue in the first half of this year.

Laying out global groundwork​

Lee noted that this acquisition was a departure from the firm’s previous acquisitions.

However, it was in line with the company’s global expansion ambitions and the acquisition also represents Shinsegae’s efforts to enhance profit margins by lessening its reliance on imported brands.

“Shinsegae has been trying to reduce its dependence on imported beauty products for the past few years in an effort to improve profitability. CEO William Kim has confirmed that this acquisition will provide ‘significant momentum’ for the firm to expand Shinsegae’s global business. It also mirrors moves being made by competitors in the domestic Korean market, like Amore Pacific, with its recent acquisition of globally popular beauty brand COSRX,” said Lee.

The company has signalled its international ambitions with previous acquisitions.

“Poiret heralded Shinsegae’s shift from a local importer of luxury brands to its foray into the global cosmetics market. After acquiring the trademark for Poiret in 2015, in 2021 Shinsegae released a range of Poiret-branded cosmetics, rolling out the new collection in its own Shinsegae Department stores throughout Korea as well as overseas, including at a contemporary arts fair in London,” said Lee.

With the acquisition, Shinsegae could also accelerate the expansion of its own brands, such as YUNJAC, which Lee noted was considered a smaller brand by Korean standards.

“Shinsegae has been trying to grow its brands overseas for some years with varying degrees of success. The acquisition of AMUSE represents a real opportunity to succeed given the brand is already globally popular – particularly on social media – and has a proven track record of sales in Japan, North America and South East Asia. AMUSE’s hero product, Dew Tint, ranked first in Amazon’s lip stain category.”

YUNJAC has two successful products Skin Perfecting Protective Base Prep and Whole Plant Effect Concentrate, which account for about 50% of the brand’s total sales.

According to Lee, the Skin Perfecting Protective Base Prep has been ranked first and second in the base and primer categories on various online platforms in Korea since its launch in 2019. 

In 2023, the brand reported that its sales increased 79% year-on-year in the period from January to October.