The Face Shop

The Market Leader Transforming the Landscape of the Korean Cosmetics Industry

Sunwoo Kim

Business Case
Source: Bloomsbury Fashion Business Cases
DOI: 10.5040/9781474208796.0026
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Korean cosmetics brand The Face Shop, launched in 2003 as a small business, has grown into a leading brand in the competitive Korean cosmetics market. The Face Shop is currently leading the K-beauty phenomenon by expanding its business into global markets, and is especially focused on Asian countries. The key factor to this success is the application of SPA (specialty retailers of private label apparel) strategies to the cosmetics industry, providing new value to consumers that were not previously available in the Korean cosmetics market. At the time of launching the brand, The Face Shop developed high-quality products with reasonable prices and distributed them only through its own specialty stores. The specialty stores provided experience-based environments (e.g., free-to-use testers, knowledgeable salespeople) that increased consumers’ awareness of the newly launched brand. However, The Face Shop gave rise to companies that copied their strategies for success. Latecomers imitated The Face Shop to develop high-quality and low-price products and spread similar brand concepts and images through their specialty stores. As of 2017, The Face Shop has the largest market share among SPC (specialty retailers of private label cosmetics) in Korea. However, it cannot guarantee its market position due to intense competition. Through the case of The Face Shop, the extension of the SPA strategy of the apparel industry to other industries will be examined. In addition, brand differentiation by an industry front-runner to successfully compete with imitators will be explored.

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