K-Beauty in China Are on the Decline But Sulwhasoo is Still Going Strong
- Chaileedo Press
- Oct 21, 2021
- 3 min read
Apart from the poor performance of Korean affordable brands such as Etude House and Innisfree in the Chinese market, sales of its high-end brands such as Sulwhasoo remain impressive.
Once upon a time, "Innisfree Green Tea Seed Serum" was the hottest social topic of Chinese girls and it became the trend at that time. Relying on the explosion of Korean dramas and Korean variety, Korean makeup began to slowly enter the Chinese market. Almost every girl who loves to watch Korean dramas has imitated the makeup of the heroin of Korean dramas. Almost every girl who loves watching Korean dramas has imitated the makeup of Korean drama heroines. Representative Korean makeup products such as cushions foundation, BB creams and others gradually entered the Chinese beauty market and quickly became mainstream.
Korean cosmetics, however, are now quietly leaving from the dressing table of Chinese girls. Innisfree, for example, has closed at least 90 more stores in China in 2020, following the closure of 40 stores with losses in 2019. It also announces the closure of about 170 Chinese stores in May 2021.
It is also difficult to escape from the closure of stores located in China's Guangzhou, Shanghai, Wuhan and other cities. By March 2021, its net assets were as low as negative $5 million and all offline stores in China have been shut down. Makeup collection store Toner becomes the only offline channel for Etude House in mainland China.
On the one hand, the current high-end cosmetics market in China is still mostly occupied by European and American international brands. These brands have already accumulated a lot of experience in terms of R&D capabilities and marketing models. On the other hand, the development of social media and online e-commerce in China has allowed many smaller international high-end brands to enter the Chinese market while Chinese brands are also accelerating their development towards high-end in order to transform.
Since Korean cosmetics initially opened the Chinese market with affordable price, it will always take time to transform Chinese consumers' impression despite the current rapid growth of its premium business. And it is worth noting that compared to European and Japanese brands, Korean makeup brands do not have good capability in creating new hot selling products. They still rely on classic products so far.
In fact, in addition to the poor performance of Korean affordable brands such as Etude House and Innisfree in the Chinese market, sales of its high-end brands such as Sulwhasoo remains impressive.
With the approach of an important promotional campaign on June 18th in 2020, Tmall officially opened the pre-sale on May 25, 48,500 sets of Sulwhasoo Essential Balancing Water and Cream were sold and another Sulwhasoo Concentrated Ginseng Set was also sold 16,500 sets in just 1 day, making a total of 65,000 sets of gift sets pre-ordered. The two sets have been ordered for a total of 65,000 units. The Chinese warehouse of Sulwhasoo was in a state of emergency and Sulwhasoo immediately held an emergency meeting and applied to its headquarters in Korea to transfer goods by air to meet the demand of Chinese consumers during the campaign.
Sulwhasoo is a high-end brand of Amore Pacific Group. According to the sales in 2019, 4 months before the 2020 618 Festival, the Snow Flower Show brand will be prepared goods have been shipped in place. However, the hot situation of 2020 sales is greatly unexpected by the brand.
In addition, China, a key market for the Amore Pacific Group, has seen over 90% growth in Chinese e-commerce sales and several brand of the Group have maintained high growth online. For example, the Sulwhasoo brand achieved notable results in Double 11 - the Chinese online shopping festival in 2020. Among them, the Sulwhasoo stepped into the US$15 million club in the 2020 Double 11, with sales jumping 174% from the previous year.
The fact that defeat of affordable brands and the strong competitiveness of mid- to high-end brands shows the current market of Chinese beauty and skin care has entered the era of quality.
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