3 Key Trends in the Retail Investment Industry According to the Team Behind Amorepacific Ventures
The retail industry is constantly evolving. And with the changes to the industry come changes to the way it's invested in by venture capitalists. To take a deeper dive into the key trends driving investment in the retail sector, Labs sat down with Tim TaeHyung Kim and Peter Kim of Amorepacific Ventures, a venture capital firm based out of South Korea.
TaeHyung Kim has a degree in molecular biology and started his career doing R&D and then moved towards investing in companies. He has 10 years of investment experience overall.
Peter Kim studied commercial marketing and has 3 years of investment experience.
Q: How have you seen the retail investment industry change?
We are seeing three key trends:
- Digital transformation: In the M&A sector you see a lot of acquisitions for pure tech companies. For example, Loreal acquiring augmented reality company, Modiface. Shiseido has also made a bunch of pure digital acquisitions. Also, big corporations have traditionally bought brands/products as opposed to tech platforms but that is changing as well.
- A focus on "clean beauty:" Because the U.S. is a bit leaner on regulations for beauty ingredients/testing, new organic brands are able to launch quickly in the states then they do in Europe or Korea.
- Personalization: U.S.-based startups are focusing on personalizing ingredients based on you unique skin composition and personalizing proportions based on your genes. You also see a ton of A.I. and data-driven decisions based on the right product to make for each individual buyer
Q: How do consumers make their buying decisions?
When buying luxury goods, buyers still make decisions on loyalty and brands they respect. But price is the other big factor when consumers make purchasing decisions. Now, consumers now have more tools to do price comparisons, so for smaller, non-luxury brands, this is huge.
Q: How have power dynamic shifted in the retail space?
Consumers loyalty used to lie solely with brands they love, but now that loyalty is shifting more towards individual social influencers.
Now, because there is a lower barrier of entry to create quality products due to easy access to OEMs, and supply chain specialists, it's now easy for influencers to go straight to their following with their own brands and cut out the corporations.