February. CEO Message - AMOREPACIFIC STORIES - ENGLISH
2017.02.14
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February. CEO Message

 

 

How often do you travel? I wonder whether you have ever been to Venice in Italy? If you are thinking of travelling somewhere, make sure to brush up on the historical background and culture of your travel destination before you go as this will help make your time much more enjoyable. Venice is now known as a romantic tourist city where tourists can enjoy gondola rides along the beautiful canals, but it was once the wealthiest city in Europe. At that time, it was a thriving trade port and a merchant city as well. But now, it is hard to imagine how it was in the past. Venice once had the largest shipbuilding yards and the leading-edge blacksmiths developing the most powerful weapons in the world.


The history of Venice began after people fled from Veneto to islands located in the shallow lagoon (an area of water separated by a line of sand at the mouth of a river), escaping from Germanic people driven to the Plain of Lombardy by the invasion of the Huns. This region is situated at the end of the Adriatic Sea between the Italian Peninsula, to the north of the Mediterranean Sea and the Balkan Peninsula. It is bordered to the west by mainland Italy and to the east by Croatia and Albania. People set up villages near the bay and lived mostly by fishing. They soon became acquainted with boat rides and waterways. They started to build small ships and travelled far and wide to buy and sell goods. Furthermore, they floated rafts down the lagoon to widen their shelters, which were later connected to build houses. They also used wood piles in the water to construct buildings, which set up the Venice that we know today. There are about 118 islands spread over the lagoon and they are connected by more than 400 bridges. As all the forms of transportation use the waterways, it is truly a city built on the water. It feels as though the whole city is floating on water.


While strengthening its presence through trade, Venice had a turning point with the advent of the Crusades. Enrico Dandolo, the leader of Venice at that time fought in the Fourth Crusade, in spite of his great age. He was over 80 years old when he became the chief magistrate of Venice called the Doge and he was in fact nearly blind. Even though everyone dissuaded him from participating, he, as a citizen and the ruler of Venice, took up the Crusades. And the Crusades descended into campaigns of pillaging foreign lands with all the soldiers of the Cross acting entirely in their own interests after the First Crusade. Enrico Dandolo also sought to strengthen his own interest through the Fourth Crusade. He targeted Constantinople, the capital city of Byzantine Empire, and with strong mental strength that was almost superhuman, he led troops into the city instead of making their way into Egypt. Constantinople of the time was the end-point of the Silk Road through which luxuries were brought into the West from the East. Enrico Dandolo remained in Constantinople after his triumph there until his death. People normally want to return to their home after their death, but Dandolo wanted to be laid to rest there. Anyway, his conquer of Constantinople brought absolute hegemony over the Mediterranean Sea to Venice. And as a result, it dominated trade between the West and the East and grew into a trading empire.


However, the discovery of the New World in 1492 by Christopher Columbus, who was born in Genoa, the longtime rival for the control of the Mediterranean Sea, cast a gloom over Venice. Though he had a hard time convincing others of his plan about opening up a new trade route, Columbus eventually discovered the New World with the support of Queen Isabella of Spain and his discovery changed the structure of the world forever. The social-economic power shifted from the Mediterranean Sea to the Atlantic Ocean. With the advent of the new age of exploration, wealth was taken from the East to the West and Venice stood on the brink of ruin. Trade across the Mediterranean Sea declined as a result of the opening of new trade routes. Venice was ill-prepared for such a change. The galleys built by Venice were single-decked ships propelled mainly by rowing, but also fitted out with sails to be used in favorable winds and it was state of the art back then. But, such ships could survive out at sea for only a few weeks at a time. On the other hand, the galleons developed by Spain at the beginning of the Atlantic trade age supplemented the weaknesses of the Venetian galleys: they were able to sail across the sea by the wind with fewer sailors. This multi-decked ship was able to carry enough foods and water to sustain a voyage of months and even years. This was a huge paradigm shift.


In hindsight, success is achieved through the challenge of exploring something new. If we stop challenging ourselves and instead keep clinging to an outdated system because it is difficult to take up a new one, things will be much more difficult, no matter how hard we work. Venice is but the ruin of what's left after falling behind time. Though it prospered for nearly a thousand years, Venice failed to adapt itself to new changes of time sweeping across Europe and, eventually, its crown fell. As this example from history shows, continuous self-challenge and change for improvement are the most important keys to success. How do you see the power shift from the Mediterranean Sea to the Atlantic Ocean, and the change from galley to galleon? It reminds me of how commerce today is moving from offline to online. In the midst of rapid changes around the world, we must stop the "exploitation" of what we are given such as natural resources, but start making by "exploring" what's unknown. Instead of following the old traditions, we must think in new ways and take up new challenges.

Dear Asian Beauty Creators,

Not only Korea but the whole world is now chaotic. You all are already aware of that, without me having to say it aloud. But now that everything is uncertain, time is on the side of those who take the lead in bringing about change. This represents a golden opportunity for us, after some twenty years of waiting. It will be difficult, but we must take a closer look into what's changing. Millennials are the next generation of customers and they collect and use information in new ways to previous generations. And their idea of having things of their own is completely different. They are very much fond of Airbnb, which is the world's largest accommodation provider, yet which doesn't actually own any real estate. The same goes with Uber. It is the biggest taxi company in the world, yet owns no vehicles. Both are associated with what is called the sharing economy. Customers are changing and so is everything else. Now is the time to first set our own Asian Beauty into a new ideal of beauty. There will never be a better moment to bring new beauty ideals into the world. This is what only we can do and what we must do.


Second, we must pay more attention to mega-cities. In 2011, the world's urban population surpassed 51%, which means that people are increasingly moving to cities from rural areas. Over the next ten years, the urban population is expected to reach 70%. Cities will be more closely connected to each other and closer than ever. And Asian people will take up 2/3 of middle-class of the world. The remaining 1/3 will be people living across the Pacific Ocean, which is to the east of Korea. The Netherlands and England grew into global powers because they went across the water beyond their small barren lands. In those days, the world was centered around the Atlantic Ocean and this economic center of gravity shifts to the Pacific Ocean. The Pacific Ocean, it's in our name. Our vision was set and sealed 70 years ago when the company was named after the Pacific Ocean. Now, we must build a new future in mega-cities around the Pacific Ocean. South America borders the Pacific Ocean at one end and the Atlantic Ocean at the other end. Brazil, Argentina and Venezuela are close to the Atlantic Ocean, while Mexico, Colombia, Peru, Chile and Panama are situated near the Pacific Ocean. There are almost 300 million people living in these countries. They all border the sea, either the Atlantic Ocean or the Pacific Ocean, but they evolve in very different ways. Countries close to the Pacific are based on the rule of law. And new markets continue to appear. It is important to get how we explore and enter each market right. Above all, we must put efforts at the corporate level while learning about different culture through the Hye Cho Project. Not to mention that ASEAN countries are important markets for which we must mount very aggressive efforts.


Last but not the least, we must make wise use of mobile in order to turn this whole crisis into our advantage. The importance of mobile cannot be emphasized enough. Technologies change faster than we can ever imagine. Today, mobile-oriented companies including Apple, Amazon, Google, Microsoft and Facebook top the list of the most valuable companies in the United States. Looking back ten years, it is clear that we are in a whole different world now. But it is also clear where the world is heading. Suppose that the age of Internet is the golden age of the Mediterranean Sea, then the mobile age is the age of exploration. We must dream of going across the wide-open sea. Good timber makes a strong ship to sail the sea, but first we must have sufficient admiration for the sea to explore and make our way across its waters. Big data will be put into various uses. Read the interview with Yuval Noah Harari, author of the book Sapiens: A Brief History of Humankind. It will help you gain an insight into these changes.

Everything will become more mobile-oriented: the way we collect information, purchase goods and live our lives. To put it simply, the Fourth Industrial Revolution is built on the mobile. We must think of how we can bring about cultural evolution for Millennials through our own Asian Beauty and, at the same time, reach the next level of mobile-driven technological evolution. Moreover, we must challenge ourselves and face up to our competitors in mega-cities.

Dear Asian Beauty Creators,

What's first and most important, however, is fulfilling our given responsibility in the face of the ongoing changes unfolding around the world. More actions are the only way forward. And while playing our part, we must develop innovative products of singularity. Take a practical and more realistic approach to every product, however small. The cushion compact market is growing more competitive than ever. We must present a differentiated product of our own and go global. It will take quite some time to create new makeup techniques and change the way of using cosmetics. But, we must not give up. Let's continue our work to make competitive products worthy of love. In addition, it is important to have a new perspective on the Korean market and customers. Our old-fashioned view of customers has caused the problems we face today. Customers have already changed and moved forward, while we still stay in the past without knowing about it. Look back upon our attitude toward customers and the quality of our service provided to them. Playing by the book is not good enough to impress customers.


Check whether or not S&OP (Sales and Operation Process) and GOM (Global Operation Model) are being implemented as planned. Our process needs to be improved and streamlined for more efficient decision-making and delegation of authority. It is not as easy as it sounds, but we must stay dedicated to our work. Let us ask ourselves what we are doing to learn more about Asian markets. Do we follow Test & Learn to explore new markets and win the heart of customers? Are we losing our chance to someone else before we can even make a decent attempt? Closely examine how we are doing and fix whatever is wrong. Do we pay enough attention to the shop floor? The way we manage our warehouses should be updated as everything is moving from offline to online. Plus, the customer experience should be consistent online and offline. For instance, customers should be able to come to the store and return things that they bought online. Carefully listen to the voice of customers and stay true to the craft of our service. Think outside of the box and try something new.


Always work with a sense of ownership. Be active in taking actions. Do what must be done and never put too much time and effort into, for example, making a report simply for form's sake. Be like the Doge of Venice, Enrico Dandolo, and take the lead in work with a sense of ownership. "Make a clear and settled judgment, find inner calm and do the best though there seems to be no hope." These are the core beliefs of stoicism, which led the Rome Empire into its golden age. Rome was not built in a day. It was built upon the attitude of people giving their best with unwavering devotion and clear judgment.


In 1997, Amorepacific was born again, even though our history dates back over 70 years. And that's because 20 years ago we experienced a definite turning point. During the IMF crisis in 1997, each member of Amorepacific sought to do their best at their given position and, as a result, collectively we turned the crisis into a springboard to make a great leap forward. The hard-working members of those days are leading the company today. It is said that no great leaders can ever be made in good times. People grow through suffering. Without pain, there is no gain. That is because people do not put effort for change, but remain as they are when everything goes well. Just as bad times build a true hero, I believe that great leadership comes through pain. I sincerely hope that you all continue to do your given work no matter what. Just as Roald Amundsen marched 30km every day, rain or shine, challenge yourselves and make the way forward through the crisis ahead of us. Thank you.

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