South Korea’s information service provider BrainContents Inc. has acquired the country’s small natural bio cosmetics brand Swanicoco, jumping in the busy local cosmetics market.

BrainContents said on Wednesday that it signed a stock and management rights purchase agreement with Swanicoco on Wednesday to buy 70 percent or 154,420 shares in the cosmetics company at 23.3 billion won ($21 million).

Swanicoco - founded in 2010 - is a minor cosmetics company with 185 items manufactured based on natural substance extracted ingredients. The company is well known among local consumers for make-up products such as swan magic cushion that applies mixed technology of natural plant components and functional skincare product peptide eye cream.

Last year, Swanicoco raised 1.97 billion won in operating profit on sales of 18 billion won. The company raised about 2 billion won in monthly sales in May alone this year, which is the largest since its inception. Swanicoco is projected to raise record sales and operating income this year.

Unlike other rival companies that depend highly on external retail channels for sales, Swanicoco mainly sell its products through its own beauty platforms, accounting for 65 percent of its total sales. As a result, it could have rapidly enhanced product credibility and secured mania consumers with high loyalty.

Following the acquisition, BrainContents plans to advance into China, the world’s second-largest cosmetics market after the United States.

An unnamed official from BrianContents said that its subsidiary Global Tax Free Co. (GTF), the country’s leading tax refund company, has established strong partnership with Chinese firms such as UnionPay, Tencent, and Alipay, and secured diverse network in China. The company and GTF plan to make a inroad into China’s cosmetics industry by strategically linking businesses following the latest acquisition.

Shares of BrainContents ended up 7.21 percent at 1,190 won on Wednesday.

By Kang Da-young and Lee Eun-joo

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]