Earlier this year, SKS Capital announced that it would Invests USD5 million in GRACE, South Korea’s largest aggregator of international Health and Beauty brands. The move is intended to expand Grace’s business operations and pursue growth opportunities in the region, focusing on scaling operations, hiring personnel, and developing new service offerings. GRACE is currently the largest supplier of South Korean beauty giant Olive Young, and supplies online channels and more than 50,000 points of sales in the country. The company partners with and exports Korean brands to more than 60 countries via B2B and D2C channels.
Abe Cho, the chief executive officer at GRACE speaks to LUXUO in an exclusive interview where he clues us in how GRACE adapted with shifts in e-commerce over recent years, the brand’s partnership with the SKS group and the future of GRACE beyond the Southeast Asian region.
GRACE is one of the most remarkable entrepreneurial successes in Korea over the past 15 years. Can you tell us about your background and what led you to establish GRACE?
Growing up, I channeled my competitive nature into sports, which eventually led me to pursue a degree in finance. I’ve always been attracted to dynamic industries for the thrill they promised. During a tough recession, an internship at a strategy consulting agency ignited my passion for management consulting. Engaging with diverse business cases, I became enthralled with problem-solving, solution designing, and execution. I began my entrepreneurial journey humbly by starting a marketing and distribution business centered around a single product. It was a transformative period for the health and beauty industry in Korea. The shift from local stores to brand-centric outlets and then to multi-brand drugstores was significant. It felt like a perfect storm of timing and opportunity — and I’d be remiss not to acknowledge the role of luck in it.
What gaps in the existing Korean beauty product distribution space did GRACE address?
Although Korea was making strides on the international stage, its cosmetics sector was predominantly controlled by a handful of conglomerates. These organisations steered products through diverse marketing avenues, including TV shopping, door-to-door sales, and boutique stores. The health and beauty segment wasn’t traditionally considered one of Korea’s strong suits. However, as Korean students and tourists ventured out globally over two decades, a generation arose that was attuned to international standards. This bred a demand for both local and international high-quality products. With a knack for localisation and market comprehension, GRACE stepped in, bridging this void, and introduced over 50 brands in a relatively short span.
With a portfolio of leading cosmetic brands, as well as niche & independent brands, what sets GRACE apart when it comes to the range of products & brands it offers?
When scouting brands suitable for both the Korean and global markets, I emphasise uniqueness, competitiveness, and the brand’s narrative. A triumphant brand either strikes a chord with its audience or enthralls them. Beyond mere functionality, I weigh the aspirational factor: Does this product evoke desire? In my view, the products people use often mirror their identity and the persona they seek to present to the world.
GRACE has a “phygital” approach, melding both physical stores and a burgeoning e-commerce platform. Could you highlight the principal shifts in e-commerce over the past five years?
Earlier, e-commerce was largely a platform to procure familiar products, occasionally at discounts, accepting the trade-off of waiting for shipping. Today, it has evolved into an informative portal, a brand exploration zone, and a space to nurture brand allegiance. The paramount shift lies in its expanded role — transitioning from simple transactional interactions to a holistic, immersive experience. The vast expanse of the internet allows brands to engage with like-minded consumers, ensuring precise targeting and fostering enduring, significant relationships.
How did the behavior of online consumers morph during and in the aftermath of the COVID pandemic?
There are a plethora of theories dissecting consumer behavioral shifts post-COVID on both macro and micro scales. In our sector, the most profound change was the extension of online shopping horizons. Previously, certain categories like luxury items or fragrances were predominantly linked to tactile shopping experiences. The pandemic era witnessed even these segments transitioning online, with consumers adapting to diverse business models — subscriptions, group buying, and drop shipping, to name a few.
Korea has been pivotal to GRACE’s rapid advancements over the past decade. Could you shed light on your future development plans?
Cultural exports from Korea, spanning entertainment, literature, and beauty, have found enthusiastic audiences worldwide. Our blueprint involves collaborating with content creators and IP holders from various domains, ranging from webtoons to dramas. We’re poised to captivate a global audience, enamored by Korean culture, with products that resonate and foster enduring bonds.
How is your partnership with the SKS group and its recent investment in GRACE propelling growth in the SEA region?
Our alliance with SKS is transformative. The SEA region, brimming with growth potential, draws heavily from local content. Assisted by SKS, we’re adapting our strategies to resonate with local tastes. Even advanced markets, including Korea, have seen retail tumults, with established titans navigating challenges. The SEA market, burgeoning in both population and economic scope, is invaluable. Working in tandem with our regional counterparts, I’m optimistic that our collaboration will herald innovative, strategic unions in the coming times.
To encapsulate, what have been the linchpins of your success?
Looking back, our success is a synergy of serendipity and strategic vision. Being in the right place at the right time undeniably factored in. But our relentless pursuit of identifying challenges, crafting innovative solutions, and passionate, precise execution cannot be understated. An intrinsic inclination towards optimization, be it in human resources, business models, marketing initiatives, or even personal pursuits, has consistently guided my path. While I cherish our achievements, my gratitude extends to our devoted team and loyal clientele for their unwavering faith and support.
Where do you envisage GRACE five years from now?
Recent hurdles, particularly the pandemic, tested our tenacity and highlighted the resilience of our portfolio strategy. With the backing of over 300 brands and partners, we stood resilient, united in our mission, weathering the challenges. Five years from now, I picture GRACE strengthened with even more robust B2B collaborations, leveraging sophisticated direct-to-consumer channels, and deploying avant-garde customer relationship management techniques. Our goal remains unwavering: to amplify the value for every stakeholder — be they customers, suppliers, or partners — not merely in Korea but on a global canvas.
What will dominate your focus in 2024?
Occupying a distinct market niche, buoyed by a commendable organic growth of over 20% annually, places us in a privileged position, a result of our trailblazing endeavors. Representing over 300 brands, some of which are irreplaceable pillars, confers upon us both a responsibility and an expectation. As we progress, our focus will be on solidifying this unparalleled stance. Our B2B initiatives and direct-to-consumer outreaches, especially in Northeast Asia and North America, have been fruitful, and we’re primed to augment this momentum. The pandemic, while daunting, underscored our resilience. Our multifaceted sales channels — spanning mobile, offline, wholesale, B2B, D2C, and international terrains — bear witness to our adaptability and visionary approach. In essence, our aspiration for 2024 is to metamorphose from a singular e-commerce entity to an integrated platform that infuses value into every stakeholder in the ecosystem.
On the topic of inspirations, do you have a mentor who has deeply influenced your journey?
Throughout my entrepreneurial voyage, numerous business stalwarts and personal mentors have bestowed invaluable insights upon me. Their collective wisdom has been a guiding light, especially during turbulent phases. Among them, my father’s influence remains unparalleled. Business isn’t just about numbers or growth — it’s the solitude of decision-making, the onus of responsibility, and endless nights of introspection and strategy formulation. Only those who’ve treaded this path can truly empathize. My father, with his extensive business acumen, understands these intricacies intimately. He’s been both a mentor and a guide, ceaselessly emphasizing the virtues of humility and receptiveness. More significantly, he’s illustrated that while businesses inherently aim for profits, their loftier purpose is to enrich human lives and foster connections. He’s not merely an exemplary father but also an enduring mentor, echoing in every business decision I make.
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