- Teamed up with many business partners to revive the depressed beauty market amid COVID-19
- Aims to lay the foundation for improved performance through launching new innovative products and on/offline synergy marketing activities
Amorepacific Group recorded KRW 1.2 trillion in sales (-23% Year-on-Year) and KRW 61 billion in operating profit (-49% Year-on-Year) in 3Q 2020.
For the purpose of reviving a depressed Korean and global beauty market amid COVID-19, Amorepacific Group has joined hands with many business partners. With a series of new innovative products, it has been able to liven up the market.
In Korea, sales in offline channels including duty free shops, department stores and roadside shops decreased due to COVID-19 and a reshuffle of channels and as a result, Amorepacific Group saw a decline in its operating profit. The Group instead turned to online and strengthened its partnership with digital platforms including Naver, 11STREET, MUSINSA and Alibaba to further its growth in the online channel. New LANEIGE NEO Cushion targeting MZ generation became a sensation soon after its release with a record of over 120,000 cushions sold in only two months. Other newly emerging brands including Be Ready, BRO&T!PS, CUBE ME, SOON+ and RAREKIND also obtained good results together with daily beauty brands including mise-en-scene, Happy Bath and Illiyoon.
In the global operation, both sales and operating profit went down amid COVID-19. However, the enhanced digital marketing resulted in noticeable growth in the online channel. Luxury brands put up a good show in the Chinese online market, and premium brands expanded further into the e-commerce market through live commerce. Sulwhasoo made its debut in Nykaa, India and ETUDE entered multi-brand shop channel in China and Malaysia as part of the channel diversification effort. In North America and Europe, sales slowed due to the restructuring of the offline channel and the decline of tourism demand.
Amorepacific Group plans to introduce new innovative products and synergy marketing strategies in online and offline channels to facilitate better performance during the rest of the year.
Amorepacific Group Performance in 3Q 2020 (Unit: KRW 100 million / Growth: YoY growth rate)
|Category||3Q 2019||3Q 2020||Growth (YoY)|
Sales and Operating Profit of Major Beauty Affiliates in 3Q 2020 (Unit: KRW 100 million / Growth: YoY growth rate)
|Operating Profit||560||-48%||-2||Turn to Red||-51||Mitigated Losses|
|Operating Profit||-16||Turn to Red||7||+80%||39||-12%|
Business Performance of Major Beauty Affiliates in 3Q 2020
AMOREPACIFIC : Sales decreased to KRW 1.88 trillion (-22% Year-on-Year) and operating profit decreased to KRW 56 billion (-48% Year-on-Year)
The main affiliate AMOREPACIFIC recorded KRW 1.88 trillion in sales (-22%) and KRW 56 billion in operating profit (-48%). Due to the spread of COVID-19 and the restructuring of sales channels, sales in offline channels including duty free shops, department stores and roadside shops decreased and consequently, operating profit went down. Amorepacific instead turned to online and strengthened its partnership with digital platforms including Naver, 11STREET, MUSINSA and Alibaba to further its growth in the online channel.
In domestic business, Amorepacific recorded KRW 672.7 billion in sales (-28% Year-on-Year) and KRW 423.2billion in global business. (-13% Year-on-Year).
Domestic business: KRW 672.7 billion in sales (-28%) and KRW 36 billion in operating profit (-57%)
Though sales in offline channels including duty free shops, department stores and door-to-door sales declined, Luxury brands strived to bounce back in the midst of the depression of the market through the release of exclusive editions, live shows and strengthened partnerships with digital platforms. Sulwhasoo promoted high-end product lineups to enhance its assets. HERA focused on lip and face makeup products and Vital Beauty concentrated its effort into the inner beauty market to expand their product portfolio in core categories.
Premium brands also saw declined sales in offline channels. However, newly emerging brands - Be Ready, BRO&T!PS, CUBE ME, SOON+ and RAREKIND livened up the market with their solid growth. LANEIGE NEO Cushion targeting MZ generation racked up a record of 120,000 units sold in only two months after its release, and IOPE also made a strong showing with increased sales of skincare products, particularly essence.
Daily beauty brands Happy Bath, mise-en-scene and Illiyoon enhanced their product portfolio, centered on their core products and increased sales. Their digital platform marketing campaigns fueled the growth in online channels.
(New products released in 3Q 2020: Sulwhasoo Concentrated Ginseng Rescue Ampoule, HERA Glow Lasting Cushion, Vitalbeautie Meta Green Fit, MakeON LED Patch, LANEIGE NEO Cushion, IOPE Skin Future Series, Lirikos Age-over Marine Ampoule Refiner and Emulsion, mise-en-scene Salon Plus Clinic 10, Be Ready Magnetic Fitting Cushion, BRO&T!PS Point Clinic, Fradore Body Eau De Perfume Mini, RAREKIND Mini Album To-Go Series (5 shades), FILLVOID Perfumed Hand Wash Prime Edition (5 types), Holitual Micro Balancing Essence and STEADY:D Sleep Nutrient Mask)
Global business: KRW 423.2 billion in sales (-13%) and KRW 19.7 billion in operating profit (-43%)
In Asia, sales went down to KRW 394.3 billion (-13% Year-on-Year). Luxury brands recorded over 80% growth in Chinese online market. During Tmall Super Brand Day in August, Sulwhasoo saw a 150% increase from last year in sales of its Concentrated Ginseng series. It also joined hands with Indian beauty retailer, Nykaa and entered Shopee, the largest e-commerce platform in Southeast Asia for further global expansion.
Premium brand LANEIGE and Mamonde introduced an advanced version of their innovative products, Perfect Renew series and Age Control series targeting the Chinese market. LANEIGE hosted an online live show event in Thailand via Facebook for NEO Cushion and Mamonde expanded its live commerce in China as an effort to fuel digital marketing.
innisfree released Black Tea Ampoule in China to enhance its high functional product lineup and strengthened its online presence through Shopee Super Brand Day in Thailand.
ETUDE expanded its multi-brand shop channel through The Colorist, China and Malaysian Watsons, and it expects benefits from its restructuring of offline channels in the main countries of Asia for improvement in profitability.
In North America, Amorepacific reported KRW 23.9 billion in sales (-16%). With the restructuring of offline channels including department stores and one-brand shops, the total sales decreased. However, strong sales of LANEIGE Lip Sleeping Mask and the growth of the innisfree online mall were noticeable.
In Europe, total sales were KRW 5 billion (-15%). LANEIGE saw an increase in sales with good performance of Lip Sleeping Mask and Lip Glowy Balm. However, Goutal Paris showed decreased sales as tourism demand declined due to the spread of COVID-19.
innisfree : KRW 80.3 billion in sales (-38% Year-on-Year) and operating profit went into deficit.
innisfree reported KRW 80.3 billion in sales (-38%). As sales continued to decrease after social distancing policies adopted with COVID-19 outbreak, operating profit went into the red. However, through the efficient operation of online channels and roadside shops, innisfree managed to reduce the size of the deficit from the last quarter. It also enhanced its functional skincare product lineup with the release of new anti-oxidation, anti-aging Black Tea Youth Enhancing series.
(New products released in 3Q 2020: Black Tea Youth Enhancing, Ugly Carrot Hand series, My Color Palette and My Twinkle)
ETUDE : KRW 26.6 billion in sales (-33% Year-on-Year) and deficits were reduced in operating profit
ETUDE recorded KRW 26.6 billion in sales (-33%). Sales decreased as offline sales declined, but with profit-centered business restructuring, the deficit was narrowed. ETUDE released Birthday Bread Eye Palette Oven Kit exclusive for Kakao Talk Gift channel as part of enhanced digital marketing and as a result, online sales increased.
(New products released in 3Q 2020: Muhly Romance Collection, Leather Shop Collection and Glass Rouge Tint)
eSpoir : KRW 10.2 billion in sales (-22% Year-on-Year) and operating profit went into deficit.
eSpoir recorded KRW 10.2 billion in sales (-22%). Overall sales decreased with the closing of directly managed shops and poor performance in TR channel, and operating profit plunged into the red. However, strategic cooperation with retailers and live-commerce operation fueled growth in online channels. It opened Crew Market where influential artists can run their shop and released the F/W look book palette, Vintage Lace to expand its direct-to-customer sales capability.
AESTURA : KRW 21.6 billion in sales (-12% Year-on-Year) and KRW 700 million in operating profit (+80% Year-on-Year)
AESTURA reported KRW 21.6 billion in sales (-12%) and KRW 700 million in operating profit (+80%). A decrease in offline customer traffic led to a decline in total sales but increased rate of cost to sales and efficient expense management contributed to increased operating profit. Through marketing campaigns for A-CICA Stress and THERACNE 365, AESTURA strengthened its presence in the dermocosmetics category.
AMOS PROFESSIONAL : KRW 17.2 billion in sales (-13% Year-on-Year) and KRW 3.9 billion in operating profit (-12% Year-on-Year)
AMOS PROFESSIONAL recorded KRW 17.2 billion in sales (-13%) and KRW 3.9 billion in operating profit (-12%). In the midst of COVID-19 pandemic, sales in TR and agent channels decreased and consequently both sales and operating profit declined. Despite these difficulties, AMOS PROFESSIONAL expanded reverse ODP channels in Chinese and new markets and improved customer communication through social media to boost sales from reverse ODP. It also opened The AYUNCHE, solution platform for professionals in hair styling as an effort to fuel digital sales and marketing.