Social network platforms were abuzz with the news of South Korea’s fashion and beauty brand Style Nanda deciding to sell its 70 percent stake to L’Oreal for 400 billion won ($37 billion) on Tuesday. 

Industry insiders said it is a representative case of the global beauty giant recognizing the brand power of a Korean label, particularly in the Chinese market.

According to Swiss financial services company UBS, Style Nanda’s deal partner, France-based L’Oreal was selected among other big names like Affinity Equity Partners, Carlyle Group and CVC Capital.

This is not the first time a global beauty company has acquired a K-beauty brand. In September, global consumer goods company Unilever purchased a 60 percent stake in Carver Korea, manufacturer of skin care brand AHC.

Industry insiders said the deal would help L’Oreal to focus on continued demand for Korean beauty products in Asian markets, backed on the popularity of Korean pop culture. 

“By acquiring Style Nanda, whose products are widely used among from idol girl groups to average 20-something women, it will help global companies like L’Oreal to strengthen its presence in the Asian make-up market, especially in China where K-pop trends and cosmetics gain huge popularity,” said an industry insider who works in local health & beauty store chain. 

Style Nanda CEO and Founder Kim So-hee began an online fashion mall business in 2005, when she was 22. She sold clothes bought from the Dongdaemun fashion wholesale market online. 

The unique style and quirky marketing methods quickly boosted the business. By 2009, the company launched its own cosmetics brand 3CE, which now has over 500 products and is popular in China. 

In 2012, Style Nanda expanded to open brick-and-mortar stores across the country, establishing it as the most successful case of Korea’s first-generation online shopping malls. It penetrated into the Southeast Asian market via cosmetics retail platform Sephora. Currently, there are at least 150 stores operated overseas including in China, Japan, Hong Kong, Thailand and Singapore. 

According to a regulatory filing, the unlisted firm raised sales worth 129 billion won in 2016, up from 109 billion in 2015. During the first half of 2017, almost 70 percent of the total sales worth 78 billion won came from 3CE. 

After the stake sale, Style Nanda CEO Kim is likely to stay in the company as creative director for brand management and product design. She currently owns the entire stake but will be left with 30 percent, still making her a major shareholder.

By Kim Da-sol (ddd@heraldcorp.com)