Amore Pacific's Earnings Soar as China Returns to Normal

  • By Jang Sang-jhin

    May 04, 2021 11:30

    Amore Pacific has emerged from a lackluster year to achieve a significant turnaround in earnings in the first quarter thanks to recovered demand in China, which accounts for 90 percent of its overseas sales.

    Amore Pacific's January-to-March sales rose 10.8 percent on-year to W1.25 trillion, while operating profit surged 189.2 percent to W176.2 billion (US$1=W1,123).

    Life in China is returning to normal after the government claimed "victory" over the coronavirus pandemic and sales there pushed up Amore Pacific's overseas revenues to rise 19.6 percent to W447.4 billion. Overseas operating profit also shifted into the black at W52.3 billion.

    A Sulwhasoo store is crowded with shoppers in Hainan, China in March.

    Sales in Hainan, home to the world's biggest duty-free shop, surged 410 percent as it focused marketing efforts on duty-free stores to benefit from the Chinese government relaxing duty-free restrictions to boost consumption. The Korean company formed an alliance last October with CDFG, the world's largest duty-free store operator, and rolled out tailored products.

    In March, Amore Pacific invested tens of billions to open a pop-up store lounge in CDFG's store in Haitang Bay, which was featured by many online broadcasters and drew millions of hits, while the tailored products at the store sold out.

    Another factor is that it has strengthened its online business. "The time has gone when people thought products sold online must be cheap. We will sell more of our premium cosmetics on the e-commerce market and increase online sales by more than 30 percent," an Amore Pacific staffer said.

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