Fashion ODM Pond Group buys K-beauty retailer Most

Pond Group, a South Korean original design manufacturing (ODM) clothing company, said on Monday it has acquired Most Inc., a domestic beauty products distributor, to make its foray into the cosmetics market and bolster its global sales network.

Most Inc., founded in 2018, sells the beauty products of some 30 Korean brands abroad, mainly through Costco Wholesale Corp., a big-box supermarket chain. It promotes them using social media influencers.

Most Inc. is now in talks with a leading US cosmetics retailer to broaden its sales network beyond North America, Mexico, Taiwan and Australia into Japan, Britain, Spain and France.

Most Inc.’s founder and CEO Chung Da-yeon will continue to lead the company after the deal, whose value has not been disclosed.

Chung previously worked as a demand forecast analyst at Apple Inc. for two years. She then joined Amazon’s e-commerce team to launch its Korean operations, where she arranged individual sellers' expansion into global markets through the e-commerce marketplace.

Chung discovered the immense potential of Korean beauty products in the global market when studying at INSEAD, a renowned French business school, in the early 2010s.

In a posting on Most's website, she said her fellow students from other countries were curious to know about her "glowy skin" or "no makeup-makeup look" which in 2012 was a thing in Korea.

Most Inc. estimates that its sales will shoot up 180% to 35.0 billion won ($26 million) in 2024 on-year and will climb another 40% to 50 billion won in 2025, with exports accounting for more than 90%.

Pond Group was spun off from Cowell Fashion Co. at the end of last year. Cowell belongs to Dae Myung Chemical Co., which has expanded into the parcel delivery, fashion retail and airline industries through the acquisition of Rogen Transportation, Moda Outlet and Aero K Airlines Co. since early 2020.

Pond Group designs and manufactures clothes under global brands such as Calvin Klein, Puma, Adidas, DKNY and Superdry. It has also launched a fashion brand for the BBC Earth documentary channel.

It carries about 200 fashion brands, including Kodaq Apparel, which was reborn as a fashion brand in Korea.

In the first half of this year, Pond Group earned 21.3 billion won in operating profit on sales of 158.4 billion won.

F&F'S RISE IN COSMETICS MARKET

Its purchase of the Korean beauty startup came as the luster of licensed apparel brands has faded in Korea. It also followed its bigger domestic ODM rival F&F Co.'s launch of the cosmetics brand MLB Beauty in China in 2022.

In 2023, Korean ODMs suffered drops in operating profits. Operating profit at Cowell Fashion, the parent of Pond Group, slipped 12% to 34.4 billion won in 2023 compared with 39.0 billion won in 2022.

Youngone Corp., a Korean ODM for Nike and The North Face, posted a 23% fall to 637.1 billion won in operating profit compared with the previous year's 823.0 billion won. In the first half of this year, its operating profit declined by another 37% on-year to 237.5 billion won.

In contrast, F&F, which carries the license for MLB clothes for the US' Major League Baseball, bucked the trend. Its operating profit held steady at 527 billion won last year.

Since the launch of MLB Beauty in China in September 2022, F&F has been rapidly expanding its online presence through Alibaba’s Tmall, social media platform Weibo and other online marketplaces. 

Write to Hyung-Joo Oh at ohj@hankyung.com
Yeonhee Kim edited this article