'K-Beauty' Rebounds with Strong Performance... Continuing Momentum through Guanggunjeol

Cosmetics Industry Sales Recovery
4Bunik Also Anticipates China's Guanggun Festival
Offering Special Discounts and Editions

[Asia Economy Reporter Seungjin Lee] Major cosmetics companies continued their recovery in the third quarter despite masks becoming a daily routine due to COVID-19. The industry plans to sustain performance through the upcoming China’s largest shopping event, the Guanggun Festival, which is just three weeks away.

Popularity of Luxury Brands

According to financial information firm FnGuide on the 22nd, Amorepacific Group’s third-quarter sales are expected to rise 13.9% year-on-year to 1.144 trillion KRW, with operating profit increasing 39.3% to 78.1 billion KRW. The rebound in performance is attributed to high growth rates of 35% and 25% year-on-year in online and duty-free channels, respectively.

The Chinese market is expected to see a slight decline year-on-year due to restructuring of the Innisfree brand. However, high-end brands such as Sulwhasoo continue to show over 30% sales growth for consecutive quarters, indicating that the Chinese market will be reorganized around these brands.

LG Household & Health Care is projected to record third-quarter sales of 2.2088 trillion KRW and operating profit of 340.6 billion KRW, up 6.7% and 3.9% year-on-year, respectively. Cosmetics sales are estimated to have increased 9.2%, with operating profit rising 13.7% during the same period. Major luxury brands such as The History of Whoo, O Hui, and Su:m37 led the strong performance.

Shinsegae International’s third-quarter sales are expected to rise 3% year-on-year to 343.3 billion KRW, with operating profit soaring 159% to 18 billion KRW. Performance improved mainly due to luxury cosmetics brands like Swiss Perfection, and participation in the Chinese luxury cosmetics market is expected to accelerate growth.

4th Quarter Focused on China’s ‘Guanggun Festival’

The cosmetics industry is putting all efforts into the Guanggun Festival, China’s largest shopping event, which is three weeks away. This period can generate sales worth hundreds of billions of KRW, making it a crucial turning point for fourth-quarter performance growth.

LG Household & Health Care is focusing on targeting China’s MZ generation (Millennials + Gen Z). They are promoting the luxury brand The History of Whoo’s Cheongidan Hwahyun set through live broadcasts led by Wanghong (internet celebrities). O Hui launched a ‘Debutante (upper-class children coming of age)’ edition in collaboration with Chinese jewelry designer Zhonghua, inspired by the traditional culture trend among China’s MZ generation.

Amorepacific is strengthening its luxury cosmetics locally and targeting the rapidly growing online channels. Sulwhasoo introduced products featuring Guanggun Festival designs resembling traditional wrapping cloths. Laneige plans to conduct live broadcasts with Wanghong Wei Ya, and Hera is distributing promotional samples based on purchase amounts, featuring Blackpink’s Jennie, who is popular in China, as the model.

Shinsegae International is also showcasing Vidi Vici and Yeonjak on Tmall and JD.com. Vidi Vici, known as the ‘Petit Chanel’ in China, is offering special discounts, while Yeonjak has prepared Guanggun Festival sets. A cosmetics industry official explained, "Pre-sale performance for the Guanggun Festival is currently not bad, so expectations are high."

This content was produced with the assistance of AI translation services.