Spa business: korea
As spa business in Asia starts to evolve, British brands are embracing the sea of change. Here, Sasha Lill looks at the latest developments in Korea
The growing interest for spa experiences and treatments in the Far East has spurred many UK spa companies to enter the Asian market.
Henry Kim, president of The Spa Cosmetics Company - distributor for spa skincare brand Elemis in Korea - talks about the spa phenomena and its projected growth."Traditionally, spas are not part of Far Eastern culture; instead, in Japan and Korea we have a community bath custom with more than 5,000 bath houses (with sauna) in every neighbourhood.
"Here, traditional massages (concentrating on acupressure) and exfoliating rub peels are carried out. In addition, there are about 10,000 aesthetic centres, some of which are built within plastic surgery clinics or dermatology offices.
"The spa market in Korea, unlike Europe, has different categories. In Korea the word 'spa' is considered more luxurious than the normal aesthetic and sports massage centres.
"In the past year, the demand for spa treatments has risen, mainly owing to our working week being reduced from five-and-a-half days to five. Now families have more time at the weekends to relax and play. Furthermore, the influx of foreigners who come to Korea for business, and the fact Korea has the largest foreign student population abroad in the world, have meant more Koreans are relaxing and enjoying life. It's no longer all about work."
rapid growth
"Currently in Korea there are about a dozen hotel spas and a dozen stand-alone spas - a small market but one that is rapidly growing.
"Many hotels and companies are looking to open Western-type spas, while many aesthetic centres are evolving into more luxurious establishments so they can call themselves a spa.
"The projected growth is difficult to measure because the market is so small, but I foresee that by the end of 2008 we will have three times the number - and, in 2009, another three-fold increase.
"Some 50% of foreigners make up the clients who visit hotel spas, with stand-alone spas attracting 100% of local clients. These are upper-middle-class people, in their 30s (30%), 40s (50%) and 50s (20%). These clients will have travelled overseas at least once; most will understand English; and 10% will have studied abroad.
foreign business
"Half of the clients are wealthy housewives, the other half are professional women. Only about 5% of clients in local Korean spas are men, while the 50% of hotel clients are 90% men.
"Besides hotel guests, there is a growing number of tourist agencies trying to do business by arranging plastic surgery and spa treatments as part of a tour programme for clients who visit from China, Hong Kong, Taiwan, Thailand and Singapore. Furthermore, we are expanding our current resort-type facilities with Western-style spas to attract more overseas tourists."
NEW OPENINGS
According to Henry, the department store cosmetics market is worth about US$1.3 billion in Korea - of which there are about 50 stores.
Elemis
is represented in Daegu City in the DongA department store, where it has the Skin Lab Visia face analysis system and spa pod. Here, clients can experience a power-booster facial. This month (April) Elemis is opening in Apkujung - Seoul's Beverly Hills district - at the prestigious Galleria department store. Initially, this facility will not have a spa pod; however, an Elemis Spa is soon to open within half a mile of the store.
SEAN HARRINGTON
Sean Harrington, managing director of British spa brand Elemis, talks about why the Asian market is a strong focus for the company.
"Elemis has been in Asia since 1992. It represents a very large proportion of our business and is a strong focus for us.
"We have always enjoyed huge brand success both in skincare and spa across Asia and, from that perspective, Korea is another step in a different strategy of being a brand player.
"The spa business in Korea is a new market and is only now starting to evolve as tourism and travel have increased. There is this most fantastic domestic economic engine that exists: Korean people spend their money in Korea and on themselves. They are very sociable and regularly go out to eat and drink, and take good care of themselves.
"When you look at the retail environment over there, you see brand headquarters such as Louis Vuitton and Gucci that are five times the size of any other in the world - in size, scale and presence. Koreans have learnt to spend their money. They are vibrant consumers, who want the next best thing and to do the best for themselves.
"Korea represents a perfect environment for spa - and for a sophisticated brand such as Elemis. It is an aspirational brand that this type of consumer buys into - the best of the best, which Elemis aspires to be.
"In our retail stores, the average skincare spend per customer is £140 per visit - twice the highest spend of anywhere else in the world.
"Korean spas subscribe heavily to e-commerce and Elemis has been at the forefront of the spa industry in embracing e-commerce for the success of its business. They see something that could expand their business opportunities very fast, and when they are doing that, we also succeed.
"The type of spa operation out there is second-to-none: they build the dream and styling levels are fantastic. For example, Elemis is launching a spa in Templum - an incredible four-storey facility inside a building with leisure facilities and retail outlets. It is located in Chungdam-Dong, an area close to all the flagship stores of famous brands such as Gucci, D&G, Calvin Klein and Louis Vuitton. It is Seoul's Beverly Hills area.
"Korea is a massive state that is suddenly booming: the business potential and opportunities have the highest growth rate. As a business, if you get in now, you secure a dominant position. I like emerging markets, since Elemis does very well and develops fast. Our focus in Asia is huge. We are very positive about the market and territory."
