What: L'Oréal acquires Korean skincare brand Dr G's parent company Gowoonsesang Cosmetics from Swiss retailer Migros, strengthening its position in the innovative K-beauty market.

Why it is important: This move strengthens L'Oréal's portfolio with an established Korean brand at a time when K-beauty continues to gain global popularity, despite recent market challenges faced by international retailers in Korea.

L'Oréal has made a strategic move to expand its presence in the Korean beauty market by acquiring Gowoonsesang Cosmetics, the parent company of skincare brand Dr G, from Swiss retailer Migros. This acquisition capitalises on the growing global demand for K-beauty products, known for their innovation and effectiveness. The French cosmetics giant sees significant potential in Dr G, particularly for its ability to meet rising consumer demand for effective yet affordable skincare solutions. Alexis Perakis-Valat, global president of L'Oréal's consumer products division, emphasised the company's long-term interest in the brand and its success, expressing plans to accelerate growth both within South Korea and internationally. The deal comes amid a broader context of market dynamics, including a slowdown in China, previously one of the fastest-growing beauty markets. This strategic acquisition builds upon L'Oréal's previous ventures in the Korean beauty sector, following their 2018 purchase of makeup firm 3CE.

IADS Notes: L'Oréal's acquisition of Gowoonsesang Cosmetics comes at a pivotal time in the global beauty landscape. While Sephora's exit from the Korean market in March 2024 highlighted the challenges of this competitive sector, Korean beauty brands have demonstrated remarkable international success, with companies like Olive Young reporting 125% growth in annual sales over four years as of July 2024. This acquisition aligns with L'Oréal's recent strategic moves, including their October 2024 investment in beauty tech startup Noli, showing their commitment to combining Korean innovation with global reach. The timing is particularly significant as major retailers worldwide are investing heavily in dedicated beauty spaces, as seen in November 2024 with Chanel's standalone beauty store launch, suggesting strong distribution potential for L'Oréal's expanded K-beauty portfolio.

L’Oreal buys Dr G’s parent, Korea’s Gowoonsesang Cosmetics