This file photo provided by LG Household & Health Care shows cosmetics products made by The Creme Shop.
SEOUL, May 11 (Korea Bizwire) — With the Chinese government’s lockdown measures to contain a surge in COVID-19 cases dragging on for more than a month, South Korean cosmetics companies are renewing efforts to gain a stronger foothold in the North American market as a way to reduce risk arising from their excessive reliance on exports to the Chinese market.
South Korea’s beauty giant Amorepacific Group posted sales of 1.26 trillion won (US$988 million) and operating profits of 171.2 billion won in the first quarter of this year, down 9 percent and 13.4 percent, respectively, compared to a year ago.
The primary factor behind the disappointing results was the sharp decline in duty-free shop sales resulting from a new wave of COVID-19 outbreaks that have frozen the Chinese market.
In contrast, Amorepacific’s North American sales marked an upward trend, rising by 63 percent year on year as products from brands like Sulwhasoo and Laneige sold well through Amazon.
LG Household & Health Care Ltd. is also concentrating efforts to expand its presence in North America as part of an initiative to reduce its reliance on the Chinese market.
In February, LG Household developed a customized hair dye dispensing system with U.S. hair care specialist Farouk Systems and released it in the North American market.
In addition, the company acquired the American cosmetics brand The Creme Shop for 148.5 billion won last month.
This came after the acquisition of the business rights for the Asian and North American markets on behalf of the American cosmetics and daily necessity company The Avon Company and the German beauty brand Physiogel.
Budget cosmetics brand Missha also saw its sales rise by 115 percent year on year thanks to the re-establishment of a North American branch in 2020 and the launch of sales on Amazon.
The Korea Trade-Investment Promotion Agency estimated that the size of the U.S. cosmetics market will expand from $92.6 billion this year to $94.6 billion in 2024.
Ashley Song (ashley@koreabizwire.com)
