K-beauty brand loses luster in mainland

K-beauty brand Innisfree will close 80 percent of its branches in the mainland after its annual operating profit slid 90 percent in 2020.

Innisfree wants to reduce the number of its stores to 140 compared to around 800 in 2020, according to The Korea Herald.

Its revenue dropped 37 percent year-on-year to 348.6 billion won (HK$2.28 billion) in 2020, which was half of what it took from its 2016 peak, when it was 770 billion won. Its operating profit also plunged 89 percent to 700 million won in 2020.

Amorepacific, the parent company of Innisfree, said it is in the process of refining the sales channel for the brand, a process that will continue this year. That includes a new round of strategic adjustments for the mainland market.

Innisfree had expanded its business in second- and third-tier cities in the mainland at a rate of 100 new shops per year since 2014. However, it closed around 40 shops in 2019 and at least 90 in 2020.

In addition, Amorepacific aims to focus more on its luxury cosmetic brands and online channels in the mainland market.

Established in 1945, Amorepacific is a South Korean beauty and cosmetics giant, operating more than 30 beauty, personal care, and health brands including Sulwhasoo, Laneige and Innisfree.