Amorepacific is expected to have rejoined the "4 trillion won club" in sales last year for the first time in three years, helped by a global business reshuffle. Amorepacific had consistently posted more than 4 trillion won in annual sales in the past, but its heavy reliance on China pushed revenue down to the 3 trillion won range for two straight years in 2023–2024.
Amorepacific restructured its China operations in recent years with a focus on profitability. At the same time, it shifted the center of gravity of its overseas operations to the Americas and revamped its business portfolio. The strategy is seen as translating into a rebound in results.
According to FnGuide on the 13th, Amorepacific's estimated results for last year are 4.2368 trillion won in revenue and 377.8 billion won in operating profit. That would be up 9% in revenue and 71.4% in operating profit from a year earlier. It would be the first time in three years since 2022 that Amorepacific has posted sales in the 4 trillion won range.
Amorepacific's performance peaked in 2019, when revenue reached 5.5801 trillion won. However, revenue fell to the 4 trillion won range in 2020–2021 and slid to the 3 trillion won range in 2023–2024. The prolonged slump in the China market, which had accounted for most overseas sales, was to blame.
Amorepacific booked 2.0784 trillion won in sales from overseas markets alone in 2019. Of that, the Asia market, including China, accounted for 1.9635 trillion won. However, due to the COVID-19 pandemic, overseas revenue fell to 1.7453 trillion won in 2020 and 1.8023 trillion won in 2021.
During the pandemic, China's turn toward strengthening its domestic beauty industry also weighed on the company. Even after the endemic phase, Amorepacific's overseas revenue continued to decline, to 1.4935 trillion won in 2022 and 1.3918 trillion won in 2023.
Facing unfavorable market conditions, Amorepacific pushed through a sweeping portfolio overhaul to shift the center of its overseas business from China to the Americas. In 2021, the company invested 180 billion won to secure a 38.4% equity stake in COSRX, a skin care brand with high recognition in North America. It then exercised a call option in 2023 to buy the remaining stake, investing about 750 billion won more to raise its stake in COSRX to 93.2%.
It also expanded distribution channels for its core brands. It placed flagship brands such as Laneige and Innisfree on Amazon and Sephora in the United States, broadening online and offline touchpoints. Next-generation brands such as AESTURA and HANYUL also joined the Americas market one after another, boosting recognition.
At the same time, Amorepacific downsized its China business and launched restructuring with an emphasis on profitability. It shifted its offline-centered distribution structure to channels focused on online, duty free, wanghong (influencer), and live commerce.
As a result, Amorepacific's overseas sales rebounded 21% year over year to 1.6789 trillion won in 2024. Of that, sales in the Americas surged 83% from a year earlier to 524.6 billion won, surpassing Greater China revenue (510 billion won) and firmly establishing themselves as a growth pillar.
At the China subsidiary, revenue declined, but profitability improved, turning to a profit in the third quarter last year. In Dec. last year, Amorepacific restructured about 30 low-profit, inefficient stores among roughly 180 Sulwhasoo locations in China to further improve its profit structure.
Amorepacific posted a total of 1.3532 trillion won in overseas sales in the first through third quarters last year. Adding the yet-to-be-announced fourth-quarter results, the figure is expected to reach between 1.8 trillion won and 1.9 trillion won. That would be the highest overseas sales since 2019.
Amorepacific Group aims to raise the share of overseas sales, currently in the 40% range, to 70% by 2035. Kim Hye-mi, an analyst at Sangsangin Investment & Securities, said, "Amorepacific is stabilizing its business structure while maintaining moderate and steady growth," adding, "Unlike indie brands, Amorepacific's strengths include a diversified brand portfolio and a global infrastructure centered on major offline channels."