South Korean beauty giant Amorepacific turned to the North American market after emerging from the downturn in the Chinese market, with impressive results.
Amorepacific said on July 21 that it reaped the most profit from Prime Day, the biggest discount sales event of the year for members of Amazon’s paid services, held July 12-13, South Korea. news media reported.
Since the beginning of this year, Amorepacific has focused on developing online and offline sales channels in the United States, led by major brands such as Laneige, Sulwhasoo, and Innisfree.
Laneige topped the beauty and personal care categories during Prime Day and was also named the best-selling brand, with Sulwhasoo selling out all of the products prepared for the event.
In March and April, Sulwhasoo and Laneige officially launched on Amazon and expanded their online sales reach. Sulwhasoo also opened his 51 stores at Sephora in his March, and Innisfree also expanded to more than 490 of his stores at Sephora and Kohl’s.
In North America, Amorepacific’s first quarter revenue increased by 60% over the same period in 2021.
China market problem
Over the past few years, Korean cosmetics have relied heavily on the Chinese market, and Amorepacific’s cosmetics sales share in China accounted for about 70% of its total overseas sales.
However, Amorepacific has been losing market share in China since 2017, when the Chinese government imposed economic retaliation on South Korea for the deployment of the US-made Terminal High Altitude Area Defense (THAAD) ballistic missile system. was.
Meanwhile, Sulwhasoo and IOPE air cushion foundation were the main targets of counterfeit products in China.
In addition, the Chinese Communist Party’s long-running zero-coronavirus policy has weakened the country’s economy and fueled the plight of foreign companies.
In response, Amorepacific has significantly reduced its brand stores in China. The Korea Herald reported on Dec. 16, 2021 that Amorepacific had over 1,280 stores as of 2019 when the outbreak hit the Chinese market.
In 2021, Amorepacific’s Innisfree stores in China will shrink from 610 to 280, and this year it will shrink to just 140. The Chosun Ilbo reported on December 15, 2021 that all offline stores have been closed.
Amorepacific’s international division reported a 6.1% decline in revenue and a 19.5% decline in operating profit in the first quarter of this year due to lower sales in China. According to South Korean news media mk.co.kr on April 28.
Asia is the slowest growing region in terms of revenue, according to Amorepacific’s 2021 financial report, with revenue in China down about 10% in the October-December quarter last year.