The spate of new entrants in country’s liberalised single brand retail format continues with the latest entrant being South Korea’s biggest natural beauty brand Innisfree. The entity has been given permission by the government to engage in the business of single brand retail trading in the country allowing it to expand the network of exclusive stores that command high levels of popularity in the markets of Japan, China and Singapore.

In 2012, the government relaxed the threshold of foreign direct investment (FDI) in single-brand retail trading from 51% to 100%. This resulted in a spate of proposals coming for approval including that of Swedish furniture maker IKEA, Pavers, Celio, Gruppo Coin, Italian health and wellness entity Artsana, European apparel maker Hennes & Mauritz (H&M), Mango, Tommy Hilfiger.

With regard to Innisfree, the Department of Industrial Policy and Promotion (DIPP) has given its nod to the proposal of Innisfree India Pvt Ltd for single brand retailing of its natural cosmetic and beauty products. Under the proposal, Hong Kong-based Amorepacific Global Operations, the parent entity, would pick up 100% stake in the Indian unit by pumping in initial capital of $ 11.8 million.

The Korean entity would also be subjected to the 30% local sourcing condition, preferably from MSME, village and cottage industries, and would be barred from retail trading in any other form including through the e-commerce platform. Under the policy, it would also have to operate through excluve stand alone stores set up to retail Innisfree products.

For Innisfree entry into the Indian market is aimed at capturing a substantial share of the growing beauty product market. According to consultancy firm Technopak, working women tend to spend 35% or more of their income on themselves, splurging on everything from cosmetics to cars. It estimates that about 10 million urban women in the age group of 20-40 years are employed in corporate managerial jobs and this number is expected to increase five fold to 50 million by 2020 presenting huge market for companies like Innisfree.

Innisfree currently operates 800 stores including South Korea, China, Japan, Hong Kong and Singapore. It also has a store in Khan Market, Delhi.