Germany’s Nivea backing beautytech startups in South Korea
K-Beauty continues to exert a strong global presence with their unique products and worldview. And now we’re seeing a trend of startups in South Korea’s beautytech industry receiving backing from larger companies to help accelerate their growth. What’s more, the helping hand hasn’t just been from domestic companies. In a surprise move, the German brand Nivea launched its own accelerator program for South Korean startups at the end of last year.
The Nivea brand is owned by German skincare corporation Beiersdorf and recent news of the launch of their own accelerator program in South Korea took the industry by surprise. They announced that they’ll be partnering with co-working space firm WeWork to establish a “next-generation K-Beauty innovation hub” in Seoul. Nivea will be the driving force behind this innovation hub and will not only provide selected Korean startups with access to Beiersdorf’s world-class skincare expertise but also the chance for them to be mentored by each of the chief executives from Nivea’s marketing, sales, digital, distribution and R&D departments.
This begs the question: why is Beiersdorf launching this support program in South Korea and not their own country? The reason for this was explained by Ralph Gusko, one of the company’s board members for Brands, Research & Development in the Asia Pacific region.
“Most global companies concentrate on developing and investing within their own country, but we keep our eyes on where the future of the beauty industry is going to begin. We want to walk alongside South Korea, a global leader in digital technology, as it leads to global beauty trends through K-Beauty.”
Basically, by setting up a base for startup backing in South Korea — a country where both communications of beauty trends and technology is strong — Beiersdorf is aiming to maximize the synergistic effect of these companies with their own business. They plan to begin selecting startups for the program in the first quarter of 2019.
Backing by domestic conglomerates
Not wanting to lose out to foreign firms, South Korean companies are also developing their own programs to back startups. The domestic industry’s largest conglomerate Amore Pacific is set to launch their program called AmorePacific TechUP+ in the second quarter of 2019. The program will support not just beauty but also healthcare-related startups.
An event held in July last year introduced a number of the firms receiving backing from Amore Pacific and among them was HiddenTrack, a schedule managing app that incorporates information on where the best sales for cosmetics are, Barun a company developing mouth-care products that you can consume and LOVBOD which are body masks that attach to certain parts of the body such as the buttocks (details yet to be announced) and that employ plus-size models in their advertising.
Even major IT companies in South Korea such as NAVER are jumping on the support-the-startups bandwagon. Through their own unique accelerator program, NAVER is backing Nexpress of which is developing a product called “aino” — a patch for light therapy (also known as phototherapy) that you stick on your skin.
In the flurry of startup support, it’s not just private companies that are providing backing. Organizations such as the Korea Trade-Investment Promotion Agency (KOTRA) are also giving a helping hand to startups for their expansion to overseas markets and partnership endeavors. Just recently KOTRA held the “Korea-France Startup Summit 2018” in cooperation with French accelerator organization Creative Valley.
The background to all this can be understood from the context of South Korea’s economic situation over the past 50 years. South Korean society has long concentrated its wealth into its conglomerate companies, or chaebol. And the risks of this to the stability of the domestic economy have burdened the country. Because of this, in the past several years the government has been increasingly been rolling out strategies with the slogans of “creative economy” or “chaebol reform”, aiming to apply pressure to the business world, and major corporations are starting to follow suit. One tactic is in the increased propagating of friendly slogans into society such as “industrial symbiosis”, and another is in the augmenting of support for startups as a way to demonstrate tangible efforts to improve the situation.
This push in startup support, combined with the severe unemployment situation the country is currently facing, has ignited the phenomenon of startups popping up all over South Korea. Although yet another cause for this phenomenon is no doubt the sense of urgency South Korean companies are feeling — along with companies all over the world — to not lose out in the competition to secure superior resources and talent with rapid globalization.
Whatever the reasons, the support by Nivea and other major corporations is certain to help jumpstart South Korea’s beautytech startup industry and lead to more amazing and innovative products and services from the world of K-Beauty.
