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Local entertainment agencies are expanding their businesses to cosmetics, golf, gaming and tourism to take advantage of the growing popularity of K-pop culture in the Asian market.
Leading the trend is YG Entertainment, which recently became one of the top music agencies in the country.
YG, which manages the rapper Psy and K-pop groups Big Bang and 2NE1, has advanced into the booming cosmetics market to capitalize on the growing popularity of Korean beauty products in the Asian market.
Last year, YG Plus, an affiliate of the agency, launched its own cosmetics brand, "Moonshot," and a fashion brand, Nona9on.
Moonshot now has three flagship stores in Seoul and is expected to go abroad in the second half of this year as negotiations are under way between the company and its business partners in some Asian countries.
The company also aims to have 100 billion won ($93.32 million) by 2017 in yearly sales from the clothing brand jointly launched with Cheil Industries, the fashion unit of Samsung Group.
YG didn't stop there. In March, the agency jumped into the golf business, taking over G-Ad Communications, a golf marketing firm that houses professional golfer Kim Hyo-joo. After the takeover, YG has shown a plan to advance into manufacturing golf supplies and fashion and running golf academies.
The agency's competitor, JYP Entertainment, recently started a new business.
On April 17, JYP signed a contract with the Hong Kong-based international beverage brand Jax Coco to sell coconut oil and coconut chips and other products from the Hong Kong company in South Korean department stores and premium supermarkets.
S.M. Entertainment, one of the big three music agencies in South Korea, is making full use of its strength as an agency representing many stars with large followings in other Asian countries.
In December, it opened SMTown@coexartium, a multipurpose cultural space, inside the COEX shopping mall in Seoul's posh Gangnam area mainly for Chinese and Japanese tourists who are K-pop fans.
Visitors can enjoy a mix of holographic and live performances, attend programs that allow them to experience the lives of K-pop artists and buy souvenirs featuring S.M.-managed artists such as EXO, TVXQ, Super Junior and Girls' Generation there.
S.M. says it plans to launch a package tour of the SM Town soon for Chinese fans in collaboration with tourism agencies in China.
Besides the cultural space business, the company is also pushing to begin the business of developing and distributing computer games featuring its artists.
The entertainment agencies' moves to diversify their businesses are seen as an effort to secure a new growth engine and spread their risk.
"There would be a limit in growth if we do our own job only," a YG official said, requesting not to be named. "We eventually have to start a new business to go a step further in sales or earnings." (Yonhap)
