MISSHA, which led the street cosmetics shop boom in Korea in the 2000s and stood at the peak of the trend, is reinventing its business model to make a comeback. While sharply scaling back its domestic offline business, it has adopted an omni channel strategy that targets foreign online and offline markets at the same time.
MISSHA stores that were once common on the streets will be even harder to find going forward. But MISSHA's signature product, "BB cream," has signaled a flashy revival, recently taking the No. 1 spot in sales in its category on Amazon in the United States.
According to the industry on the 16th, Able C&C, the operator of the MISSHA brand, recently held a board meeting and decided to exit domestic company-owned stores and duty-free operations. It comes 23 years after it opened the country's first street shop near Ewha Womans University in 2002. While it will maintain the franchise system used by some local customers, company-operated stores will close sequentially through the first half of next year.
MISSHA, Korea's first-generation street shop, enjoyed sensational popularity by touting value-for-money products while successfully upgrading its image. Stores expanded to about 800 nationwide, including in busy districts such as Myeong-dong and Gangnam.
But competitors such as TONYMOLY, The Face Shop, and SKINFOOD sprang up in droves, and in the 2010s, health and beauty (H&B) stores represented by CJ Olive Young and online shopping emerged as the mainstream, ushering in a slump.
Sensing the limits of single-brand stores, Able C&C sought a turnaround in 2000 by introducing a new type of store called "MISSHA Plus," which added new brands to existing locations. But headwinds such as COVID-19 overlapped, depressing offline domestic demand, and performance deteriorated sharply, with losses of 68 billion won and 22.4 billion won in 2020 and 2021, respectively. Only about 250 MISSHA stores remain today, roughly 180 of which are company-operated.
Feeling the limits of offline, domestic demand–centered growth, Able C&C has restructured its business in recent years by focusing on expanding overseas offline distribution channels. Able C&C now supplies to distributors in multiple countries and has entered more than 59,000 stores across 41 countries, including about 20,000 in Japan and about 19,000 in Eastern and Western Europe. In the first quarter of next year, it plans to ramp up entries into major retail channels such as Costco in the United States, Canada, and Taiwan.
Thanks to these efforts, the export share of total sales, which was only 23.7% in 2020, jumped to 46.3% in 2021 and topped half for the first time at 52.6% in 2022. The export share has continued to rise, to 55.8% in 2023 and 56.5% in 2024, and the company aims to boost it to 75% next year by sharply reducing its domestic offline business.
Able C&C has also focused on e-commerce this year, including TikTok and Amazon. In the third quarter, U.S. sales rose 2.7 times from a year earlier, driven by TikTok Shop and Amazon. Recognition in the United States surged after famous female rapper Cardi B introduced MISSHA's BB cream on social media in July.
In particular, during the U.S. Black Friday and Cyber Monday period from the 28th of last month to the 1st of this month, MISSHA logged record sales on Amazon and TikTok. Amazon sales rose 127% from the previous year's event, led by sales of the flagship "M Perfect Cover BB Cream" and "M Perfect Cover Serum BB Cream," which increased 269% and 329%, respectively. The two products also ranked No. 1 and No. 2, respectively, in Amazon's BB cream category.
A researcher at Mirae Asset Securities said, "Able C&C has improved its cost structure compared with the past as it pursued internal reform over the past few years, but it lacked flagship products that could drive growth," adding, "With the hit BB cream, the product strategy has improved significantly and sales are increasing steadily."