At the unfamiliar name, Chairman Park Tae-hong tilted his head in confusion.
Seeing that, Seok-won calmly began to explain.
"It's a low-cost cosmetics road shop brand that opened its first store in front of Ewha Womans University last year, so it's understandable if you haven't heard of it."
"A low-cost cosmetics brand?"
"Yes."
Chairman Park Tae-hong, who had inwardly expected something significant upon hearing it was an investment proposal, soon showed a disappointed expression.
Park Jin-hyung, seated across from him, also looked deflated.
As if he had anticipated such a reaction, Seok-won continued speaking without the slightest concern.
"It's a brand started by a former cosmetics company researcher. Through an online homepage called 'Beauty.com,' they began by sending cosmetics to users who accumulated a certain number of points. Then, as more members wanted to purchase products directly, they started selling them at a low price—less than 10,000 won per item—and eventually even opened offline stores."
At that, Park Jin-hyung frowned and responded with clear disinterest.
"No matter how low-cost the cosmetics are, there must be fixed costs involved. Can they even make a profit selling at that price?"
Since the two of them had only ever dealt with well-known overseas luxury cosmetics brands, such as Chanel, Dior, and Estée Lauder, while running department stores, it was only natural that this didn't impress them.
"Of course, compared to overseas luxury cosmetics that sell for around 100,000 won per cream, the margins are so small they're almost negligible."
Seok-won continued speaking, glancing back and forth between his father and older brother.
"However, as the saying goes, small margins but high volume—if you sell a much larger quantity at a lower price, wouldn't you be able to sufficiently make up for the difference in margins?"
Park Jin-hyung still shook his head with a skeptical expression.
"Even if you sell a lot of products, as you say, if the margin ends up being the same as selling a few luxury cosmetics, wouldn't it just be more troublesome and labor-intensive?"
Chairman Park Tae-hong also added his thoughts.
"Your brother is right. Even in department stores, a single VIP customer spends far more than a hundred regular customers, doesn't he? They indeed account for a significant portion of the sales."
There was a reason department stores put so much effort into attracting VIP customers.
In particular, since Midopa Department Store—the group's flagship affiliate—boasted the largest lineup of luxury brands in the country and had fully embraced a premiumization strategy, such an attitude was only natural.
"Compared to VIP customers, there's bound to be a difference in purchasing power."
Seok-won readily acknowledged it.
"As you said, if consumption shrinks and a recession sets in, wouldn't focusing on affluent customers—who are relatively less affected—be the best way to defend department store sales?"
Chairman Park Tae-hong nodded slightly, as if in agreement.
"If you look at it strictly within the framework of department stores, what you just said would be the correct answer. But if consumption polarization intensifies due to an economic downturn, wouldn't the demand for cheaper products actually grow much larger? Especially for items like cosmetics, which women need to use every day, that trend would become even more pronounced."
When people's finances tighten, they may cut back on dining out or going to the movies, but makeup is not something easily given up.
Not only working women but even homemakers apply basic cosmetics every single day.
"In fact, even in Japan, where the recession has been ongoing, 100-yen shops have become extremely popular. If there are cosmetics with similar ingredients and effectiveness but at incomparably lower prices, consumers will inevitably flock to them."
However, Chairman Park Tae-hong still wore a doubtful expression.
"Even if demand increases and sales go up, if the base margin is too low, wouldn't it end up being a business where nothing is left? It'd just be something that looks good on the outside but has no real substance."
At those words, the corner of Seok-won's lips slowly curled upward.
"That would be true if it were the current agency model, where small-scale shop owners stock up on products from various brands and sell them."
Park Jin-hyung frowned and interjected.
"You're not suggesting massively expanding company-owned stores, are you? If you do that, fixed costs will rise, and no matter how high sales go, profits will just get eaten away."
"Not company-owned stores—expanding brand shops through a franchise model. That way, you can broaden the distribution network without investing significant time and effort."
"A franchise?"
As Chairman Park Tae-hong looked at him with a furrowed brow, Seok-won gave a light nod.
"Yes. Instead of the current method of selling various products, we recruit franchisees and create brand shops that sell only 'Masha' products."
At that, Park Jin-hyung asked with a suspicious look,
"Do you think that's even possible?"
Seok-won smiled confidently and asked back,
"What do you think is the advantage of a franchise business?"
Park Jin-hyung answered immediately.
"That would be the fact that even without experience or technical skills, once you join as a franchisee, the brand headquarters takes care of everything—from selecting the store location to interior design, marketing, and sales methods."
"That's right. The biggest advantage is that even someone trying self-employment for the first time can start a business relatively easily and safely, as long as they have the capital. After going through the IMF foreign exchange crisis, there were even popular phrases like 'Saojeong,' meaning mandatory retirement at 45, and 'Oryukdo,' meaning that if you're still at the company past 56, you're considered a thief. That shows how many middle-aged workers ended up leaving their companies, whether they wanted to or not."
Daehung Group was relatively better off, but countless companies carried out layoffs and voluntary retirement programs under the pretext of restructuring, pushing a large number of middle-aged employees out of their jobs.
Park Jin-hyung, who was well aware of this reality, nodded heavily.
"It would be nice if those who retired could live comfortably in their later years, but unfortunately, that's not easy in Korea. Most people aren't properly prepared for retirement, so they have to do something—anything—with the severance pay they have just to make a living."
This was precisely why the proportion of self-employed workers in South Korea was unusually high compared to its economic size and population.
"To maintain their livelihood, people need to keep earning money even after retirement. But for office workers who have spent their entire lives sitting at desks pushing papers, suddenly starting a completely different kind of work isn't easy. In those situations, the safest and least burdensome option is running a franchise store."
Park Jin-hyung fell into thought for a moment before nodding.
"Now that I think about it… recruiting franchisees really wouldn't be that difficult."
Seok-won, who had been listening with his arms crossed, turned his gaze toward Chairman Park Tae-hong.
"If we rapidly expand offline stores through franchisees while simultaneously targeting younger consumers familiar with the internet through online sales, we can minimize fixed costs and maximize profits."
Chairman Park Tae-hong, still wearing a cautious expression, asked in return,
"Even if you expand the distribution network and secure margins that way, wouldn't it all be meaningless if people don't buy the products in the end?"
"Of course. But as I mentioned earlier, when the economy worsens, and people's wallets get thinner, they'll naturally start looking for cost-effective products."
"That may be true, but there's no guarantee that consumers will choose the brand you mentioned. Wouldn't they rather go for domestic mid-range cosmetics that are already proven and have some brand value?"
Park Jin-hyung nodded as if he shared the same thought.
However, Seok-won showed no sign of being flustered—instead, a faint smile formed on his lips.
"That's possible. But even for domestic mid-range brands, a single toner or cream costs around 10,000 to 20,000 won. On the other hand, Masha's entire product lineup is priced below 10,000 won. The cheapest lipstick costs only 3,300 won."
Chairman Park Tae-hong showed a slightly surprised expression as he asked,
"Is it really that cheap?"
Park Jin-hyung also spoke as if he found it hard to believe.
"If they sell cosmetics at that price, wouldn't they actually be taking a loss?"
Seok-won gave a light shrug.
"It's just that traditional cosmetics—especially luxury brands—have had too much price inflation."
"Still, 3,300 won… isn't that below cost?"
"If they were losing money with every sale, do you think they'd sell it below cost?"
"Then are you saying they can actually make a profit even at that price?"
Seok-won looked Chairman Park Tae-hong straight in the eye and spoke.
"Yes. Of course, the margin isn't large, but it's at least a price where they don't incur a loss."
"Huh. How is that even possible?"
Chairman Park Tae-hong, who had believed he possessed a fair amount of knowledge about cosmetics due to having department stores as the group's core affiliate, let out a dry laugh.
Park Jin-hyung, seated across from him, also looked at his younger brother with curiosity.
"There isn't much difference in the main ingredients or components between high-end European luxury brands and domestic cosmetics. The price goes up depending on what kind of packaging is used and the added value of the brand name."
"Even so, 3,300 won… They're not using cheap, low-quality ingredients, are they?"
As Park Jin-hyung narrowed his eyes and asked, Seok-won firmly denied it.
"If that were the case, consumers wouldn't have stepped forward to pay for it themselves in the first place."
Since it wasn't wrong, Park Jin-hyung accepted it and dropped his suspicion.
"Hmm… Well, this is something."
Seok-won continued,
"Even if people's financial situations worsen, their desire to consume doesn't disappear. Even if it's an unfamiliar brand, if you can fill an entire basket and shop to your heart's content with the money you'd normally spend on just one or two products elsewhere, wouldn't you be tempted to try it at least once?"
"Even if it fails, it wouldn't be a huge loss, so out of curiosity, I'd probably want to check it out."
"And once they try it out of curiosity and realize there's no significant difference from the products they used before, they'll naturally choose the option that's much cheaper and lets them try a wider variety of products."
At that, Chairman Park Tae-hong fell into thought for a moment before speaking.
"Setting everything else aside, if the economy worsens going forward, demand for cost-effective products will naturally increase, so the investment itself doesn't seem like a bad idea."
"Since it's a newly launched brand, the investment required wouldn't be that large, so I think it's worth considering as well."
Park Jin-hyung also responded with a positive attitude.
"If we proceed with the investment, what approach are you planning to take?"
At Chairman Park Tae-hong's question, Seok-won showed a slightly playful expression.
"I've already finalized the deal to acquire 100% of Masha's shares for 5 billion won."
"What?"
Chairman Park Tae-hong raised his eyebrows and replied as if incredulous.
"You rascal. If we said we wouldn't invest, you were planning to acquire it on your own, weren't you?"
Seok-won flashed a grin.
"Well, it's clearly a business that will make money."
Seeing his second son—who had struck big success in everything he touched—display such confidence, Chairman Park Tae-hong felt both skepticism about whether selling ultra-low-priced cosmetics under 10,000 won could truly be profitable, and at the same time, anticipation about how much money it might bring in this time.
"Including the acquisition funds and the investment needed for aggressive expansion, how about 5 billion won for a 50% stake?"
"If it's around 5 billion won, there's no need to use group funds—I'll just invest with my personal money. What about you?"
At that, Park Jin-hyung—who had previously made a tidy profit by entrusting money to his younger brother—answered without hesitation.
"I'll invest my own personal funds as well."
After quickly organizing his thoughts, Seok-won spoke.
"I was originally planning to acquire it through Bluehole Ventures, but in that case, it would be better to establish a separate corporation and proceed that way."
"Yes. That would be cleaner in the long run."
"Then please transfer the investment funds once the corporation is established."
"Understood."
"We'll do that."
Hearing their responses, Seok-won added with a confident look in his eyes,
"I'll grow your investment significantly within a few years, so you can look forward to it."
"Hahaha. Very well."
At that moment, the two of them thought that since it was Seok-won handling it, it would surely turn a profit—but they had no idea that selling such inexpensive, low-cost cosmetics would multiply their investment to such an extraordinary extent.
TL/n -
Missha (미샤) is one of South Korea's most iconic low‑cost cosmetics brands, often credited with pioneering the "road shop" K‑beauty model in the early 2000s.