My goal for this year is to become younger. Not in the sense of turning back the clock, but rather in my state of mind. While it's impossible to grow younger physically, it's definitely possible to have a more youthful vitality and mindset.

My first objective in this pursuit is to stay curious. Curiosity fuels questions and opens the mind to new ideas. My second objective is to exercise regularly. The mind influences our physical actions, but maintaining a healthy body also motivates us to be active. Maintaining a curious mind nurtures our mental well-being, while regular exercise keeps our bodies strong. Lastly, I remain committed to our company's growth as a global brand company, fostering an environment where our talented team members around the world can truly thrive. That's a constant goal of mine.

The 1980s brought immense changes to the beauty market in South Korea. However, due to inertia, Amorepacific was slow to adapt, which led to significant business challenges from the mid-80s through the mid-90s. After careful consideration, we decided to expand beyond our traditional door-to-door sales channels and move actively into the general retail market. This led to the launch of brands like Mamonde and Laneige, which were created specifically for the retail channel.

Around 1994, the concept of "anti-aging" began to gain traction. Recognizing this as a significant trend, we started developing a dedicated anti-aging line, which eventually became IOPE. We were looking for effective anti-wrinkle active ingredients and discovered retinoic acid, but its high potency limited its use to pharmaceuticals. Reframing this, we realized that its potency indicated high efficacy, and that finding a balance between efficacy and minimal irritation could lead to success. After hundreds of formula adjustments, we pinpointed 2500 IU as the optimal concentration with the least possible irritation, and named the product Retinol 2500. This breakthrough product revitalized our struggling retail business.

In the early 2000s, we set our sights on expanding globally, with a primary focus on Asia. That’s when we coined the term “Asian Beauty.” As we developed a diverse range of products that would highlight the concept of Asian Beauty, we came up with the cushion foundation compact.

However, it was so new and different that initially it wasn't selling well. Around 2008, 2009, and 2010, people were saying, "Let's just discontinue it." But we had given some samples to a few makeup enthusiasts - what you might call "cosme-maniacs" today - and they kept coming back for more. That was our signal. Perhaps the issue wasn't the product itself, but rather that we weren't effectively communicating its value to customers.

Initially, we sold cushions via the retail channel, but we weren't familiar with explaining or selling the product effectively. So, in its third year, we tried selling it through home shopping networks, where they have more time to describe products in detail, and it was a hit. Once we figured out how to explain and sell it effectively, it took off across all our channels, not just in Korea, but globally in China and across the ASEAN markets as well.

We were running a company called Pacificpharma Corporation, but by the mid-2000s, there was much internal debate about whether or not to remain in the pharmaceutical business. Beauty and pharmaceuticals are so different, in terms of culture, sales strategies, and numerous other aspects, that we ultimately concluded that pursuing something different would improve our odds of success. We asked ourselves, "How can the company thrive?" The answer that emerged was to pivot to medical-grade skincare.

The term for a place where a river meets the sea is “estuary”, so drawing a parallel, we combined the two words “estuary” and “a” and named the brand “Aestura” to signify that meeting. We launched the new brand in 2008 and spent nearly a decade establishing it as the top medical-grade skincare brand in hospitals. However, we recognized the limitations of this niche market and saw the need for further expansion. Around this time, Olive Young was emerging as a leading health and beauty retailer in Korea, but we were struggling to gain traction in skincare there. In 2018, we decided to target Olive Young with new brands and products tailored to that channel, and this led to Aestura becoming the leading brand in the derma beauty category.

If we are constantly focused on solving problems, moments arise when all the pieces of the puzzle come together perfectly. There's a saying, "Difficult children often become the most devoted." (laughs) We navigated various challenges, persevered, and ultimately succeeded.

We've had our share of failures, just as we still do today. However, we are here today not because we haven't failed, but because our successes have outweighed our failures, and because we’ve learned from and overcome our missteps through continuous effort.

The primary force behind our new endeavors is our core mission. Every entity exists for a purpose, and to me, Amorepacific is a community of individuals dedicated to changing, enriching, and brightening the world through the power of beauty. This very power, the ability to make the world a better place through beauty, has driven us this far.

As we expand onto the global stage, makeup will be a major growth driver. Within the realm of makeup, face makeup products like foundations, cushions, and makeup bases are very closely aligned with skincare, giving us a strong competitive advantage. Moreover, our efforts to spread new trends globally align perfectly with the growing admiration and preference for Korean women's style, creating a strong tailwind for color cosmetics as well.

There are also exciting possibilities within hairstyling products. The global haircare market is expanding rapidly. While we have historically focused on wash-off products like shampoos and conditioners, growing consumer concerns about scalp health open up exciting new avenues. The scalp is essentially an extension of our skin, so we need to pay attention to both hair and roots. Add to this new styling products, coloring products, and dyes. The industry was previously centered on wash-off, but the future lies in leave-on products.

When entering new and unfamiliar markets, it is crucial to effectively introduce ourselves, showcasing who we are and highlighting the unique strengths of our brands and products. Social media has become central to people's daily lives. They turn to it for information, entertainment, and self-expression. Therefore, social media is of utmost importance and we need to be even more bold and increase our investment there. Short-form platforms like Facebook, Instagram, and TikTok have exploded, and there's been a significant shift from text-based communication to image-based interaction. It's crucial to understand that the lifestyles of those in their teens, 20s, and 30s differ greatly from those in their 60s and 70s.

Secondly, e-commerce is paramount. Amazon has evolved into a retail continent of its own. Transcending its U.S. origins, it now encompasses Canada, the UK, Japan, India, and more, creating a retail empire of staggering scale. In ASEAN, Shopee has emerged as a frontrunner, while Coupang has revolutionized shopping in Korea. Additionally, each country boasts its own vertical commerce players. Starting as a short-form social media entertainment platform, TikTok has swiftly transformed into a major shopping destination, even emerging as the second-largest e-commerce channel in the ASEAN market.

Third is the rise of multi-brand stores. Korea has Olive Young, while Sephora continues its global expansion across the US, Canada, France, and beyond. The UK has Boots and Douglas, while Japan boasts Matsumoto Kiyoshi. Before the advent of smartphones, consumers frequently visited department stores and single-brand shops. Today, armed with extensive information from their smartphones, they seek out curated destinations that offer a diverse selection of products they desire. This trend extends beyond beauty, impacting various product categories across the board.

Fourth is the importance of experiential stores. In Korea, our scale allows us to operate numerous pop-ups in trendy areas like Seongsu-dong, Myeong-dong, and Jeju Island. In other regions, we can strategically open pop-ups in key locations as needed. Having a physical space and a channel that showcases our brand identity in a captivating way is essential. By seamlessly connecting all these elements, we can successfully navigate any market and find a path to thrive.

At the heart of customer communication lies the brand. The brand must be a source of entertainment. It should be a place where customers can have fun, play games, and interact in playful ways. A brand is also about the experience. It can evoke feelings of warmth, heritage, and expertise, and this holistic experience is what truly defines a brand. Finally, the brand must embrace AI. What will search look like in the future? We're witnessing a transition from text-based to video-based searches, and the rise of AI-powered search services like ChatGPT and Perplexity. Soon, all searches will be AI-driven. When you type in a few words, the system prompts, "Do you have any other questions?" leading to an ongoing, iterative dialogue. Therefore, we must actively leverage AI to generate compelling brand narratives and engage in continuous conversation with our customers.

If a business remains stagnant, it tends to age along with its most loyal customer base. Our company's struggles in the 1990s stemmed from being overly reliant on existing customers in their 40s, 50s, and 60s. That's why we actively focused on rejuvenating our image and finding ways to attract younger customers in their 20s and 30s. After all, if younger people in their 20s and 30s are attracted to a product or brand, that appeal often extends to older age groups such as those in their 40s and 50s as well.

In this era of extended lifespans, we are embracing the challenge of “100-year skin.” Aging is not synonymous with growing old. Age is a biological state, while the feeling of youthfulness or old age is a state of mind. As such, we are committed to exploring ways to slow aging. Furthermore, we believe that individuals should choose products based on their specific needs rather than adhering to age-based recommendations. Just look at how Etude's Nymph Aura Volumer has captured the hearts of not only younger consumers but also those in their 40s and 50s.

Ultimately, a person's state of mind is what truly matters, and we will continue to engage in meaningful conversations about mindset. In the future, what will the definition of "elderly" even be? Can we really classify people in their 50s and 60s as old? These days, calling someone in their 50s old is likely to get you in trouble (laughs). Even those in their 60s are often considered young. That's why we need to continually evolve our perspectives as well.

Over the past four years, thanks to everyone's tireless efforts, Amorepacific has dramatically expanded its customer base, market reach, and global presence, all while transforming our business model. We have revolutionized our approach to distribution at customer touchpoints and implemented significant changes in our communication with customers. The collective effort of our team has paved the way for a new era. I extend my deepest gratitude for your hard work.

Now, we stand at a true inflection point, poised to become a truly global brand company. I urge each of you to embrace the opportunity to grow into global leaders within Amorepacific and to actively work towards this goal. Even if you are based in Korea, maintaining a global perspective and striving to impact the global market will empower all of us to grow as global talents. I look forward to seeing us all at the summit of the Himalayas. Let's aim for the Himalayas! Thank you.