South Korea’s leading beauty store chain, CJ Olive Young Corp., is planning to establish a subsidiary in Japan during the first half of this year, signaling its entry into the neighboring market.
Japan, alongside the US, holds significant strategic importance for the company internationally. CJ Olive Young intends to provide its private label products to local distributors in Japan, as stated by the company on Thursday. The decision regarding the potential opening of directly managed physical stores in Japan has not been finalized yet.
The decision to establish a subsidiary follows a substantial increase in cosmetics sales of CJ Olive Young’s private brands in Japan, which have surged by an average of 125% over the past four years, beginning in 2020.
In 2023, CJ Olive Young saw a 39% year-on-year increase in sales, reaching 3.8 trillion won, driven by robust performance in overseas markets. In the first quarter of 2024, the company’s sales experienced a notable 76% increase compared to the same period in the previous year.
Presently, the company distributes its products via online platforms in international markets, opting not to operate physical retail stores. In 2018, CJ Olive Young established a business entity and launched ten outlets in China. However, the company later exited the Chinese market due to sustained financial losses.
CJ Olive Young has established a dominant position in the Korean market, holding approximately 90% market share and operating more than 1,300 stores across the country. Due to CJ Olive Young’s dominant position in the South Korean market, the competitiveness of Sephora, under LVMH, has been declining in South Korea. Sephora began withdrawing from the South Korean market starting in May of this year.
