Korean Leading Cosmetics Giant closes down 80% of its stores in Chinese mainland
- Chaileedo Press
- Jan 4, 2022
- 2 min read
Korean cosmetics giant Amore Pacific's brand Innisfree will be withdrawn its store in Chinese market. It aims to reduce the number of stores to about 140.
Korean cosmetics giant Amore Pacific's brand Innisfree will be withdrawn its store in Chinese market. It aims to reduce the number of stores to about 140. According to the information, Innisfree had more than 600 stores in China during its prosperous period. In other words, compared with its peak, the withdrawal rate of stores is as high as 77% today.
In response to the news of store’s closures, the person in charge of Amore Pacific said that the group is optimizing the channels of Innisfree, and such adjustments will continue into 2022. The person in charge also said that the Amore Pacific Group will carry out a new round of strategic adjustments for the Chinese market, but only the optimization and reduction of the stores of Innisfree, not involving other brands.
In addition, Amore Pacific Group also said that in the future, the group will focus on the mid-range and high-end and online areas in the Chinese market.
Innisfree targets affordable cosmetics for young women aged 20 to 26. It officially entered the Chinese market in 2012 and has been entering China's second and third tier cities at the rate of 100 new stores per year since 2014.
The popularity of Innisfree is inseparable from the popularity of Korean culture at that time. However, the Korean Trend has gradually cooled down in China since 2017 and the performance of Innisfree has been declining.
In 2019, it closed 40 loss-making stores and it will close at least 90 more loss-making stores in 2020. In May 2021, it is rumored that it will close about 170 stores in China.
In fact, Innisfree is not the first Amore Pacific brand to close a large number of stores in the Chinese market.
Etude House, one of the group's brands, closed all its offline stores in China in March 2021 and it retained only its offline beauty collection channel "The Colorist". Other channels have switched to online operations. According to its official website, Etude House entered the Chinese market in 2013 and it had opened 58 brand-direct stores in 25 cities at its peak, including Beijing, Shanghai, Guangzhou and Wuhan.
In addition to the Amore's Innisfree and Etude House bites the dust. In 2021, LVMH's brand Benefit also made massive layoffs of Chinese offline counters and shift its focus to online and Sephora channels. Moreover, L'Oreal's active cosmetics brand VICHY has shifted its focus from offline department stores to pharmacies.
The poor performance in China is not unique to Amore Pacific as a foreign cosmetics company. In fact, almost all foreign cosmetics companies in China have suffered some degree of defeat.
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