[February 12, KOREA WAVE]Major K-beauty companies Amorepacific and LG Health and Welfare both saw their performance deteriorate last year due to the slump in the Chinese market.

According to the Financial Supervisory Service, LG Life & Health’s annual sales last year were 6.8048 trillion won, down 5.3% from the same period last year. Operating profit for the same period decreased by 31.5% to 487 billion won.

In particular, in the fourth quarter of last year, sales of LG’s cosmetics (Beauty), daily necessities (HDB), and beverage (Refreshment) businesses all decreased.

In the case of the cosmetics business, although domestic demand channels continued to grow, sales in major channels declined due to weaker demand in China. Sales of duty-free items and China decreased by double digits. Operating income decreased due to a decline in sales to China and overseas structural adjustment costs.

Sales in the daily necessities business decreased due to a decline in consumption due to a slowdown in domestic demand and increased volatility in overseas business. Sales in the beverage business also declined due to a slowdown in beverage consumption, despite growth in major brands.

Amorepacific Group was also inevitably affected by the Chinese market last year.

Last year, Amorepacific Group had sales of 4,021.3 billion won and operating profit of 152 billion won. Compared to the same period last year, sales decreased by 10.5% and operating profit decreased by 44.1%. Sales and operating profit fell due to lower sales of duty-free items and China.

The overseas business of its main affiliate, Amorepacific, had sales of 1,391.8 billion won, a 5.5% drop from the previous year due to a decline in sales in the Asian region. The drop in sales in the Chinese market was largely due to efforts to improve channel efficiency and reduce inventory. In the domestic business, sales of duty-free items also decreased.

LG Life & Health and Amorepacific plan to diversify into overseas markets and focus on strengthening the core of their main brands.

LG Life & Health will aim to grow in the domestic market mainly through online and H&B channels, and will continue to diversify into overseas markets such as North America, Japan, and Southeast Asia.

In China, the company plans to increase brand equity from a medium- to long-term perspective and selectively develop brands and channels, centering on its main brand “Hou”.

An official from LG Life & Health said, “This year, we will overcome the slump by fundamentally strengthening our business competitiveness and use this as a foothold for rebounding growth.To do this, we are securing a foundation that will allow us to develop global brands and sustain growth.” I’m going,” he said.

In accordance with the management policy of “Grow Together,” Amorepacific Group is promoting the management strategies of ▽improving brand value, ▽global rebalancing, and ▽customer-centered management.

Amorepacific officials said, “We will promote the reorganization of our global business landscape with a focus on regions with great growth potential.We will strengthen our distribution partnerships and experiment with diverse business models, focusing on newly established concentrated growth regions, to ensure sustainability. We want to secure the engine for global growth,” he said.

(c)news1/KOREA WAVE/AFPBB News