[Beauty Issue] Amorepacific group, 2nd quarter, directly hit by Chinese blockage, 'turned negative'...2nd half of the year might go even harder.
[Beauty Issue] Amorepacific group, 2nd quarter, directly hit by Chinese blockage, 'turned negative'...2nd half of the year might go even harder.
  • HueSoung, Jun Reporter / Yohan, Bok Reporter
  • 승인 2022.08.11 14:54
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-Amorepacific is having a hard hit as the Chinese market shows a sharp decline. The North American market won't be a shield...having a deep dependency on China for Amorepacific's supply chains

[Consumerwide_ HueSoung, Jun Reporter / Yohan, Bok Reporter] Amorepacific group has been hit by Chinese blockage. As export records to China have decreased in the 2nd quarter, the Amorepacific and Amorepacific groups are facing financial hardships. It's been 12 years since Amorepacific had a deficit. During the last quarter of 2020, there was a deficit, but soon it turned positive until then. 

However, it could be a challenge this time because of the trade dependence relationship with the Chinese market. Currently, Amore has been winning in the North American market. But it seems to be not enough to overcome the Chinese market background. For this reason, I suspect that the 2nd half of the year won't be easy for them.

On the 28th of July, the Amorepacific group reported that the group recorded 2.2892 trillion won in sales, and 160.3 billion won in profits during the 1st half of the year.   

It's been reduced by 14.9% for sales, and 46.9% for profits compared to last year. In the first half of the year, the total sales of groups were 2.1125 trillion won. In the second half of the year, total sales were 21.3%, and profits of 10.9 billion won.

On that day, Amorepacific related person said in an interview with Consumerwide, "Because of Chinese blockage policy on main cities in China, followed by Covid19, the downturn in total business during the 2nd quarter was inevitable. Yet, we had some growth in the North American market and the online channel is gradually improving.  Etude and Espoir have turned to surplus. The growth of Osullok is remarkable. Having these records behind us, I see that we will overcome it. However, the problem lies in our North American market which is still in progress. Hence, the 2nd half of the year won't be easy. "   

Affiliate companies during the 2nd half of the year recorded sales of 945.7 billion won, which is 19.6% lower than the same quarter last year, and profits of 19.5 billion won in deficit. 

The sales record of the domestic market was 627.8 billion won, which is 15.4% lower than the same quarter last year. The Chinese blockade held recovery of the tax-free channel while online channels had success in the market.

The overseas business was devastated by the Chinese blockade throughout the 2nd half of the year. Due to this disaster, sales records in the Asian market have declined by 33.2% (297.2 billion won).

On the other hand, growth in the North American market has continued. Powered by Laneige and Sulwhasoo, Amore has recorded up to 66%.

Laneige partnering with Sydney Bernice Sweeney while Sulwhasoo entered the Amazon channel contributed to extending the sales record. Sydney has been actively involved with the Waterbank campaign.

Most of all, Amore had astonishing results on Amazon Prime day. Prime day is aimed at paid customers on Amazon. Laneige won No.1 in the Amazon beauty and personal care category on that day. (based on sales records)

Markets in Europe went smoothly. Laneige has been receiving positive feedback from Sephora and the e-commerce channel, while Goutal Paris in the local market has recovered with a 15% growth in sales. Amorepacific probably wouldn't have had a deficit if only there wasn't a Chinese blockade in the 2nd quarter.

Etude and Espoir succeeded in turning a surplus in the 2nd quarter. Etude recorded 27.1 billion won in sales, which is 3.2% higher than the same month last year, and 900 million won in profits. Espoir recorded 13.4 billion won for sales, which is 16.3% higher than the same quarter last year, and 500 million won for sales.

Amosprofessional grew 1.7% in profits (3.3billion won), and 4.9% in sales (17billion won) compared to the same quarter last year. Osullok continued to get positive results. Osullok sold 17.8 billion won, which is 24.6% higher than the same quarter last year. Profits recorded 800 million won (28.7%). Meanwhile, Inisfri recorded 72 billion won for sales, and 5.5 billion won for profits, which numbers are 18.1%, 3.6% lower than the same quarter last year.


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