June 27, 2017 5:32 am JST

South Korea's E-Mart takes makeup store chain to Saudi Arabia

Growing Middle East beauty market draws supermarket operator

KENICHI YAMADA, Nikkei staff writer

South Koreans shop at an E-mart superstore in Seoul. © Reuters

SEOUL -- South Korea's E-Mart will join with a Saudi Arabian retailer for a foray into the surging Middle Eastern cosmetics market.

The Seoul-based supermarket operator will open a Sugar Cup makeup store in the Saudi capital of Riyadh through a franchise with Fawaz Alhokair. The cosmetics market in the Middle East is projected to double in size from 2015 to $36 billion in 2020.

This is the South Korean company's second overseas franchise business after its namesake supermarket chain entered Mongolia last summer. The retailer will supply products and provide know-how on store operations to Fawaz, while receiving royalty income from the business.

Fawaz plans to open Sugar Cup locations in other Saudi cities such as Jeddah and Dammam. Company executives will decide on dates during an upcoming trip to South Korea, but E-Mart said that both sides have agreed to open the stores "as early as possible." Saudi Arabia spends the most on cosmetics in the Middle East, according to E-Mart.

Other South Korean cosmetics companies are also moving into the region. AmorePacific Group will launch its first store this year in Dubai through a partnership with major Kuwaiti retailer Alshaya Group. LG Household & Health Care is also in the process of opening up multiple shops in the United Arab Emirates.

Meanwhile, E-mart has lagged competitors in expanding its international business, which consists only of supermarkets in China, Mongolia and Vietnam. And those operations are set to shrink as the company plans to exit the Chinese market amid deepening losses.

Asia300

E-Mart, Inc.

South Korea

Market(Ticker): KRX(139480)
Sector:
Industry:
Retail Trade
Discount Stores
Market cap(USD): 6,125.05M
Shares: 27.87M
Asia300

AmorePacific Group, Inc.

South Korea

Market(Ticker): KRX(002790)
Sector:
Industry:
Consumer Non-Durables
Household/Personal Care
Market cap(USD): 9,841.31M
Shares: 88.90M
Asia300

LG Household & Health Care Ltd.

South Korea

Market(Ticker): KRX(051900)
Sector:
Industry:
Consumer Non-Durables
Household/Personal Care
Market cap(USD): 15,019.29M
Shares: 17.71M

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