Korean beauty startup raises $3.5 million to expand in Southeast Asia

Althea operates as an online distributor and retailer, facilitating cross-border retail of ever-popular Korean beauty to neighbouring Asian nations.

Currently, the company’s major markets are Indonesia, Malaysia, Singapore and the Philippines, and with its latest funding, Althea is set to tackle Thailand and Vietnam before the end of the year too.

Cross-border​

As globalisation continues to consolidate markets across borders, consumer demand for brands from other countries is on the rise.

This appetite is being met by the growing number of internet beauty retailers that can facilitate international shopping, often able to offer consumers goods at affordable prices thanks to the the saving of not requiring a physical store presence.

Lower taxes are usually placed on cross-border purchases than on imported goods for retail within a market itself, which has also helped to fuel the rise of cross-border retail.

It seems governments may be wising up to this tax opportunity though; in recent months, China, a major hub for cross-border retail, raised taxes on e-commerce retail imports.

Divide and rule​

Althea differentiates itself from other cross-border K-beauty retailers by focusing its reach on Southeast Asia: rival Memebox, for example, targets markets in the West.

“The aim is to be the number one marketing generation platform for Korean brands in Southeast Asia,”​ CEO Frank Kang told TechCrunch in an interview​.

“Our business is scalable so we can consider any market and any country, but we want to focus on Southeast Asia because it is the second largest region for Korean exports behind only China. We really want to conquer this market first [since the] competition is stronger in China and the U.S.,”​ he confirmed.

“We need to grow to scale first, then we could consider other parts of the world but that’s the long term future.”​