Invest KOREA

Intercos Group, the world’s No. 1 cosmetics OEM/ODM manufacturer, was founded in Italy in 1972. With its unique and innovative technologies for the development of Color Cosmetics, Skincare, and Hair & Personal Care products, the company works with over 550 cosmetics brands around the world, including beauty giants such as major multinational companies, as well as "indie" brands and retailers.

In 2015, the Group expanded its business to the Korean market in the form of a 50:50 joint venture with Korean luxury retailer Shinsegae International and had been operating as Shinsegae Intercos Korea since then. Following the company’s success, Shinsegae and Intercos Italy made additional investments to build a greenfield manufacturing site, the Osan Beauty Hub which was inaugurated in 2017; in June 2020, Intercos decided to purchase 100 percent of the share capital of the Korean subsidiary, being rebirthed as Intercos Korea.

Alessandro Recupero was appointed CEO of Intercos Korea in February this year after serving as its Board Member since 2017, and played a decisive role in the full acquisition of the shares and the consequent transformation of the company into the new Intercos Korea. He first joined the Italian Intercos Group in 2012 acting as Senior Vice President of the global Business Unit Skincare, Hair & Personal Care. Shinsegae Intercos Korea achieved sales of KRW 12.5 billion in 2017, KRW 26 billion in 2018, and KRW 51 billion in 2019. Under Recupero’s leadership, despite the highly uncertain market situation linked to the pandemic, Intercos Korea is set to achieve an additional 50 percent growth in sales in 2020, with even stronger growth in profitability. In addition, thanks to his global network and the global business experience, exports will grow ca. 120 percent compared to 2019.

Consequently, the excellence of Korean cosmetics represented by “K-beauty” has been introduced to North America, Europe, China and the other Asian markets. Leveraging these accomplishments, the company is now ready for its second phase of growth, with additional significant investments in the pipeline in the areas of Innovation and Operations, in order to become the Strategic Innovation Hub for the group’s business development in its most important market, Asia.

Read on to learn more about Recupero’s insight on doing business here as well as the many opportunities K-Beauty will bring to potential investors.

Can you tell us about Intercos and its history?

Intercos is one of the top global business to business operators in the creation, production and marketing of Color Cosmetic products (make-up), skin treatments (Skincare) as well as Hair and Body care. Our mission is to create lasting partnerships with the most relevant and iconic cosmetic brands, offering a complete range of products across the Beauty & Personal Care industry, with a global approach.

Founded in 1972 by Dario Ferrari, the Group, with a client base of 550 brands including all major players of the cosmetics industry, is made up of a global staff totaling approximately 5,800 employees, with 11 research centers, 15 production plants and 15 sales & marketing offices located across three continents. For over 45 years, Intercos has been interpreting beauty, creating innovating cosmetic products and positioning itself as the undisputed trendsetter, capable of predicting, anticipating and influencing new trends in the world of cosmetics, thus satisfying the requests of all types of customers with products for all price ranges, market positioning and distribution channels.

Intercos’ ambition is to continue developing its role of being a trusted partner to the major brands in each respective market, offering increasingly innovative and high quality products. We rely on our creative and technical teams, our laboratories specialized in advanced research activities and dedicated to the development of new raw materials, active ingredients or technology platforms, and we strive to continuously invent new formulations, delivery systems and finished products to ultimately create Hero Products and best sellers for our clients.
 

Due to implications of the COVID-19 pandemic, many companies are scaling back or postponing their investments. Why, then, did Intercos decide to expand investment in Korea?

Given our long term vision and commitment for Korea, we were not too preoccupied by COVID-19; rather, we saw it as an opportunity. While our competitors might slow down, we thought this was the best timing for expanding our investments to get ahead and strategically secure our future development. That’s why we decided to purchase 100 percent of share capital of Shinsegae Intercos Korea, and we are currently increasing our investments for expanding our R&D and Innovation activities in Korea.

Intercos typically fosters specific areas of strengths and expertise for each region and develops and manufactures products tailored to local characteristics, thus following local requirements and trends. In this context, we do have a long-term vision for Korea as a Strategic Hub for Asia.

Korea has an excellent position in the development and production of emulsion-type products such as foundations, skincare, hybrids, etc. driven by the strong domestic demand and the appeal of K-Beauty in the international markets. The outstanding ecosystem in this field makes Korea a perfect location for the scouting and the development of new innovative raw materials, packaging solutions or creative marketing & product concepts. Also, it’s a great environment for hiring talented researchers and skilled human resources. That is why Intercos decided to expand investment here, and foster Korea as the strategic hub for the Group’s global business development and growth within the entire Asian region.

What makes Korea an attractive investment destination?

When we first entered Korea, our goal was mainly to consolidate and expand our presence within the Korean domestic market and to develop innovative products in the areas of Foundations and Skincare. We realized that Korean products and Korean trends were receiving great attention from consumers in China and neighboring countries in Asia, as well as in the U.S. and EMEA, and this became one of the reasons behind the decision to increase our investment here.

Korea has very suitable conditions to become a strategic hub for Asia and a global center of excellence for the Group in the categories of complexion, namely foundations, skincare and hybrids. Indeed, the country has various benefits and advantages when exporting to a third country, on top of an easy entry into other Asian markets including China and Japan, and now, into the U.S. market as well.

More particularly, we highly value some characteristics of the specific Business Model adopted within the Korean cosmetics industry, with a high focus put on creativity, speed and fast time-to-market, customer centricity and an excellent service-level. We believe that combining these values with our deep dedication and global expertise on Innovation and Technology, Quality, Sustainability and Clean Beauty, will put us in a very unique position to leverage Intercos Korea as the strategic driver for the Group’s next phase of growth.

Are you working with any local partners to expand your network or presence here?

Since Intercos plans to foster Korea as an innovative hub, we are hoping to grow our scope of cooperation with various local companies. We also aim to collaborate with innovative and high-tech startups in different fields and to evaluate various forms of industry-academia cooperation with universities.

We also plan to recruit more and more skilled employees as a result of our ambitious growth plans for 2021 and the following years, and our consequent continuous need for expansions in the areas of production facilities and R&D lab. In this regard, it would be nice to take advantage of the support offered by KOTRA. I’m aware that Invest KOREA holds an annual job fair for foreign-invested companies to help businesses like us find great local talent, and I look forward to taking part in this once the conditions are suitable.
 

What are some future plans/goals that Intercos has in terms of doing business in Korea?

As said, we are working to make Intercos Korea a global center of excellence in the complexion category, meaning that we will continuously focus on developing and producing the most innovative foundations and skincare products. This will also include the so-called hybrids, or in-between, products where we can combine our unique and deep expertise in both skincare and makeup. To this end, on one side we will continue to expand our R&D laboratory—in particular strengthening our Advanced Research teams—on the other side, we are already undergoing an upgrade and scale-up of our production facilities, also with the aim to improve our process efficiency according to Intercos global standards, and to exploit the significant synergies existing with the rest of the Group.

Also, we are gradually introducing more manpower and human capital from HQ and our other subsidiaries around the world, not only for enabling the above mentioned upgrade within operations, but also for facilitating technology transfer and introducing additional technologies and know-how from Intercos in Korea. As an example, thanks to the Group’s well established expertise, we aim to boost our local efforts in the areas of Sustainability and Clean Beauty, where we want to be a trendsetter for Asia.

Lastly, and more importantly, we intend to leverage our cultural mix for enabling further organizational development, upgrading our policies and practices to global best practices, while continuing fostering diversity and cultural evolution.

By Grace Park
Executive Consultant
Investment Public Relations Team / Invest Korea
Korea Trade-Investment Promotion Agency (KOTRA)
gracepark@kotra.or.kr