Sulwhasoo's First Care Activating Serum V (left) and First Care Activating Serum VI (Amorepacific)
South Korean cosmetics giant Amorepacific is reconstructing its brand image in a bid to wean its sales off a dependence on China and ramp up its sales in North America and Europe.
According to Amorepacific, the company on Wednesday released First Care Activating Serum VI, the six edition of Sulwhasoo's flagship serum.
Sulwhasoo is Amorepacific's luxury skincare subsidiary brand that accounts for some 40 percent of the Korean beauty giant's total annual cosmetics sales.
The company's newest product reflects Amorepacific's approach to appeal to more global consumers, as the product is the first of its kind to solely feature an English logo, instead of the usual Chinese character logo.
Sulwhasoo's new campaign image (Sulwhasoo Instagram)
Moreover, with the latest edition, Amorepacific is launching advertisements that appeal to more global tastes by having models from different races promote their product for the first time.
"We are aiming to place more emphasis on expanding our business in countries other than China, mainly in North America and Europe, where we experienced significant growth," an official from Amorepacific told The Korea Herald.
The move to transition from targeting mainly Chinese consumers, who account for about 50 percent of the company's overseas cosmetics sales, follows the company's sluggish performance in the Chinese market.
According to its earnings report, in 2022, the company's annual overseas sales fell 17.1 percent year-on-year to 1.4 trillion won ($1.06 billion), while its operating profit plunged 84.3 percent to 8.1 billion won.
Overseas sales were hit hard by the prolonged pandemic, especially during the months of Chinese lockdowns, the company said.
"Moreover, in China, a growing trend is that consumers there prefer Chinese-made beauty brands over foreign ones,” said the company official.
In a move to ramp up its overseas business, Amorepacific is turning to other foreign markets, centering on North America and Europe, where the company has achieved high sales growth in recent years.
According to the earnings report, during the September-December period, the company's North American sales doubled while European sales increased by 69 percent. These figures are in stark contrast to Chinese sales, which dropped by 30 percent during the same period.
Amorepacific said sales of its major cosmetic brand Laneige in the US particularly drove up overall profits in North America, declining to mention the exact amount by which the brand's sales rose.
"We largely reaped profits in North America by aggressively marketing Laneige products in the US and Canada. Laneige is one of the best-sellers in North America, and its sales reaped profits from major North American retail channels such as Amazon and Sephora," said the official.
He added that acquiring Tata Harper last year also helped drive up Amorepacific's sales in North America, as the brand currently operates in diverse American online channels and 800 offline stores, including Sephora and Neiman Marcus, a high-end department store chain.
Amorepacific said it also has high hopes for its business in Europe, as the company's European business saw a bump in sales, with its Goutal and Laneige products successfully foraying into diverse European retail channels. These include boutiques, department stores and online platforms. According to Amorepacific, it also increased its profits through brand localization.
"We are striving to enhance the value of our major brands to overcome the difficult business environment overseas and continue to diversify our global portfolio," he said.
"However, we are not 'dropping' the Chinese market, and they will continue to play as a crucial demographic for our cosmetics business for years to come."
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