Color cosmetics company Clio is ambitiously re-entering the Japanese market. Clio is well known for its clever overseas strategy. After quickly withdrawing from the Chinese market, which was doing well, it began to advance overseas to North America and Southeast Asia using online channels, and sales have skyrocketed despite COVID-19.

The Japanese market accounts for the largest portion of Clio’s overseas sales, but sales have been declining since 2022 as global cosmetics companies flock to Japan. Clio is aiming to rebound in the Japanese market once again this year by acquiring Japanese convenience store 7-Eleven and local distributors. Accordingly, the cosmetics industry predicts that Clio will achieve annual sales growth of about 25% in Japan this year due to the effects of marketing and channel sales utilizing local personnel.

◆ Rapid withdrawal from China, performance ‘soaring’ despite pandemic

Clio is the first color cosmetics company in Korea, established in 1997. Its predecessor was 'Clio Corporation', established in 1993, which launched and sold a color cosmetics brand for professionals. As demand for color cosmetics increased among general consumers, Clio Corporation was established in 1997 and began full-scale business. Since then, it has rapidly expanded its distribution network by opening stores in the color cosmetics section of department stores and in front of universities.

In the late 2000s, as road shops such as Missha, Etude House, and The Face Shop gained popularity, Clio also continued to grow. In addition, in 2013, it established a Chinese corporation, ‘Shanghai Clio Cosmetics Co., Ltd.’, and entered the overseas market. In particular, Clio’s sales in Korea and China skyrocketed in 2015 when actress Gong Hyo-jin used Clio products in the drama ‘Producer.’

In fact, sales, which were 42.4 billion won in 2014, increased by 152.3% to 107 billion won in 2015. During the same period, operating profit increased by 3,650% from 600 million won to 22.5 billion won.

Thanks to this, the company attracted an investment of 57 billion won from L Capital Asia, a private equity fund affiliated with the LVMH group, in 2016. In November of the same year, it successfully entered the KOSDAQ market.

However, Clio was hit hard by China’s retaliatory measures against THAAD (Terminal High Altitude Area Defense) just two years after listing. In 2018, sales decreased slightly by 3.2% year-on-year to KRW 187.3 billion, but operating profit turned into a deficit from KRW 10.8 billion to minus KRW 1.5 billion. At the time, the company was operating 64 offline stores (Club Clio) in China, so fixed costs were a big burden.

Because of this, Clio quickly withdrew from the Chinese offline market. In Korea, it also focused on online channels such as the Health & Beauty (H&B) channel and its own platform (Club Clio online mall), while simultaneously closing all offline stores and undertaking a large-scale channel adjustment.

Instead, it expanded into markets outside of China, focusing on e-commerce such as Amazon, and entered North America and Southeast Asia. It also expanded its brand portfolio, which focused on color such as Clio and Peripera, to the basic sector such as Goodal and Dermatory.

Source: News Top ( https://www.newstof.com )