AmorePacific sales hurt by tensions with China
South Korean cosmetics giant AmorePacific, owner of LaNeige and Sulwhasoo brands, saw turnover fall 10 percent to 4.5 billion euros (6.03 trillion won), while operating results fell 32.4 percent in its 2017 fiscal year. In the fourth quarter alone, the decline in operating income fell 76.2 percent.
The company largely attributed the counter-performance to a decrease in Chinese tourists in the country, due to tense relations between South Korea and China that followed after the deployment of the American anti-missile system THAAD (Terminal High-Altitude Area Defense). This situation was all the more penalising as the company, the number one cosmetic group in South Korea with 32 percent of market share in 2016 (source Kantar), achieves more than 70 percent of its sales in its domestic market.
To counter the aftershocks of geopolitics, AmorePacific is strengthening its export business, counting on specifically the international success of South Korean cosmetics. In North America, the company has established one of its flagship brands, LaNeige in Sephora stores and has opened the first Innisfree store in America in New York, a brand focused on natural and affordable ingredients. Other stores are also expected to open on the West Coast.
In France, last September, AmorePacific launched Sulwhasoo exclusively at the Galeries Lafayette Haussmann in Paris. The skincare brand will arrive this year in England and next year in Germany. South Korea, which provides a turnover of 50 million euros in Europe, expects a sales growth of 20 percent in 2018.
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