LG H&H Co., a South Korean company, has announced its acquisition of a 75% stake in Vivawave, the owner of the domestic premium makeup brand “Hince.” The acquisition is valued at 42.5 billion won ($31.5 million).
Hince, launched in 2019, is a makeup brand that focuses on natural colors and embodies a mood concept. It has gained a strong following among young consumers born between the early 1980s and the early 2000s who appreciate its unique style. With 212,000 followers on Instagram in South Korea and 83,000 followers in Japan, Hince has established a significant presence on social media.
In 2020, Hince generated sales revenue of 21.8 billion won ($16.2 million), with an even split between domestic and international markets. The majority of international sales come from Japan.
LG H&H aims to enhance its makeup portfolio through this acquisition, aiming to solidify its customer base among young consumers. Furthermore, the company seeks to strengthen its market presence, particularly in Japan, which is the world’s third-largest beauty market, capitalizing on Hince’s strong brand recognition.
According to Euromonitor, a global market research firm, the global makeup market is projected to grow at an annual rate of 8%, reaching $95 billion by 2027, up from $64.5 billion in 2020. LG H&H’s acquisition of Hince aligns with the company’s strategy to capitalize on the promising growth prospects of the makeup industry.
According to its latest financial report, LG Life & Health’s sales in the second quarter amounted to 1.8 trillion won, down 3 percent year-on-year; operating profit was 158 billion won, down 27.1 percent year-on-year; and net profit was 96 billion won, down 23.5 percent year-on-year.
Its Q4 2022 earnings report specifically cited the rapid spread of the new Crown Pneumonia outbreak in China, which had a significant negative impact on the overall performance of the beauty division, as well as on commercial and travel retail within China. Against this backdrop, LG Life Health appears to be intentionally ramping up its presence in other markets, while reducing its dependence on the Chinese market.