2015 will be a milestone year for budget cosmetics-maker TonyMoly chairman Bae Hae-dong.
The company, ranked fourth in the segment last year, is finally going public in July.
A meeting with investors was held in Shanghai on Monday. “Major Chinese investors reside in Shanghai and we thought this was the right time to explain the company’s vision and prospects,” a Daewoo Securities official who leads TonyMoly’s stock-listing plan was quoted as saying to a local newspaper.
If all goes to plan, the public offering will make Bae one of the most successful businessmen in the cosmetics industry, analysts say.
TonyMoly chairman Bae Hae-dong. (Yonhap)
Not only is he the chairman of TonyMoly, but he is also chairman and 50 percent shareholder of Taesung CNC, which owns 100 percent of TonyMoly and supplies cosmetics containers to TonyMoly. The remaining shares in Taesung are shared by Bae’s wife and children.
Bae has become the epitome of a rags-to-riches story, starting from his arrival at Seoul bus terminal with only 50,000 won ($45) in his pocket in the 1980s from faraway Gwangju.
Bae, who majored in product design at a local university, started his career in the cosmetics industry by working as a container designer for then-popular domestic beauty product maker Julia.
After absorbing the know-how to make beauty products, he established Taesung CNC in 1994 and started supplying cosmetic containers to not only domestic firms but also global giants such as Estee Lauder Companies.
“When our client just gave me a vague concept, I would turn up shortly with a perfect product. That’s how people believed in me,” he later recalled to the press.
With the success of Taesung CNC, Bae established TonyMoly in 2006 amid the budget cosmetics craze.
Bae from the beginning made it very clear that he wanted the customers to fix their eyes on the product design ― the best-selling lip balm comes in a plastic container in the shape of red lips and hand cream in the shape of peaches and apples.
He delegated the product development and production to original equipment manufacturer Cosmax, and focused on the marketing, sales and container development. In order to cut the cost and remain price-competitive, Bae built a plant inside the Gaeseong industrial complex and became the spokesman of the businessmen there.
His budget cosmetics business has quickly scaled up. TonyMoly reported 310 billion won in sales from 600 offline outlets and online stores last year, becoming the fourth biggest in the industry, trailing only LG Household and Healthcare’s The Face Shop, AmorePacific’s Innisfree and ABLE C&C’s Missha.
The company is forecasting sales to reach 400 billion won this year with the penetration into overseas markets. It will stretch out in to the Middle East ― the first Saudi Arabian store is scheduled to open later this year ― alongside planned branch offices in China and Vietnam.
The company was also named one of the best up-and-coming rookie companies by giant cosmetics retailer Sephora, and its products are sold at more than 16 countries around the world.
But there have also been a number of setbacks. The Fair Trade Commission of suppressing its franchisees. Bae, accused TonyMoly who has been rumored to have had troubled relations with managers, saw four CEOs quit in two years, fueling rumors that he was not keen on sharing the spotlight.
The recent plummet in Chinese tourists to Korea, fearing the spread of Middle East respiratory syndrome, can also threaten the success of the IPO, analysts say.
“TonyMoly has proved that with the right amount of coordination and the right vision, you don’t always have to know how to produce or develop facial creams and make-up kits to work in the beauty industry,” a worker for a local cosmetics brand told The Korea Herald.
By Bae Ji-sook (baejisook@heraldcorp.com)