Korean Cosmetics Makers Turn from China to U.S.

  • By Song Hye-jin

    May 10, 2022 12:34

    Korean cosmetic makers are turning increasingly to the U.S. after their vital Chinese market was devastated by zero-COVID policies, a patriotic consumption drive and a sharp drop in Chinese tourists in Korea.

    Amore Pacific's first-quarter sales declined nine percent on-year to W1.26 trillion, while operating profit plunged 13.4 percent to W171.2 billion (US$1=W1,274). The main culprit was the Chinese consumer market being hit hard by lockdowns of tens of millions of people.

    Overseas sales account for around 35 percent of Amore Pacific's total revenues, and China for 30 percent of that. But sales in North America have increased sharply. 

    Brands like Sulwhasoo and Laneige saw sales surge 63 percent mainly thanks to sales on Amazon. An Amore Pacific staffer said, "We will aggressively expand sales of high-end products to achieve double-digit growth in the U.S. and Canada."

    LG Household and Health Care is also focusing on the U.S. market to reduce its dependency on China. In February it joined hands with Houston hair care company Farouk Systems to sell customized hair-dye and last month acquired The Crème Shop, a Los Angeles-based beauty brand, for $120 million.

    LG Household is also developing a temporary-tattoo printer called Printly that will be introduced in North America later this year.

    It already acquired U.S. beauty and care product maker New Avon in 2019 for $125 million and German brand Physiogel's Asian and North American business in 2020.

    "We are pushing ahead with product development using artificial intelligence to target the North American market for young consumers,” a staffer said.

    Able C&C's cheap-and-cheerful brand Missha is also looking for markets other than China. Having suffered a serious decline in business, it reopened its U.S. subsidiary two years ago to become one of the most popular brands in the segment. Its sales on Amazon last year surged 115 percent from the previous year.

    Market researcher Euromonitor estimates the scale of the U.S. cosmetics market at $92.6 billion this year, rising to $94.6 billion in 2024. An LG Household staffer said, "The U.S. accounts for around 25 percent of the global cosmetics market. Its main customers are in their teens and 20s, who are keen on catching up with the latest trends." 

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