In an interview with Bloomberg in January, Lee said cosmetics are an area where people with expertise can beat larger companies with more financial firepower.
“Cosmetics are an area for specialists,” he said. “It’s not the kind of business where you can do well by just putting in a lot of money.”
BB Cream
Lee got the business idea after visiting a dermatology clinic for treatment of a facial issue. He saw how popular BB cream was becoming and wanted to make it available to a wider audience, since at the time it was only available at clinics and pharmacies.
Dr. Jart+ introduced its BB creams at the Sephora chain of cosmetics stores in the U.S. in 2011, which immediately became a hit and prompted other global brands to produce similar versions.
Now Dr Jart+ products are available in more than 35 countries, with China making up its largest market outside South Korea. It sold goods worth 17.7 billion won ($14.9 million) during this year’s Singles’ Day shopping day in China -- an almost fourfold increase from a year earlier. That, according to one analyst, explains why Estee Lauder was keen to acquire the company.
“The acquisition was mainly to target the China market,” said Young-hyun Jun, who covers cosmetics at SK Securities Co. Ltd. in Seoul. “Estee Lauder probably thought it’s more strategic to target the China market with an already established brand.”
Revenue Surge
Estee Lauder acquired Have & Be because of its “focus on creating high-quality skin care products that fuse dermatological science, incredible innovation capabilities and artistic expression,” the company said in a statement announcing the acquisition.