K-Beauty Fails to Capitalize on Singles' Day Boom Amid China's Consumer Slump

LG Household & Health Care Posts 360 Billion KRW Sales on This Year's Guanggunje... 7% Decrease YoY
Amore Shows No Performance Disclosure... Contrasting with Previous Years' Extensive Promotions

LG Household & Health Care's Hoo Cheongidan Hwahaeon 2-piece set. Photo by LG Household & Health Care

[Asia Economy Reporter Moon Hyewon] Korean cosmetics companies heavily reliant on the Chinese market are struggling as domestic consumption sentiment in China weakens due to the Chinese government's strict zero-COVID lockdown policies. Although these companies have consistently enjoyed a surge in sales during China's biggest annual shopping event, the Singles' Day (Guanggunjie), this year they are suffering from lower-than-usual performance.

According to the cosmetics industry on the 19th, LG Household & Health Care recorded approximately 360 billion KRW in sales during this year's Singles' Day event, which is a 7% decrease compared to last year. Sales of luxury cosmetic brands such as Whoo, Su:m37, O Hui, CNP, belif, and VDL also fell by 7% during the same period, totaling 340 billion KRW.

An LG Household & Health Care official explained, "Consumer sentiment has remained depressed due to the Chinese government's stringent COVID-19 prevention policies."

Amorepacific, which had publicly disclosed the sales performance of its key brands like Sulwhasoo, Laneige, and Innisfree extensively right after last year's Singles' Day, has been reluctant to release such information this year. Given the significant contraction in consumer sentiment in China, it is speculated that sales were lower than in previous years.

Korean cosmetics companies, which have experienced sluggish performance due to China's domestic economic downturn and rising raw material costs, had hoped to turn the tide during Singles' Day, the period when Chinese cosmetics consumption peaks.

However, this year's Singles' Day saw Alibaba, the main organizer of the event, cancel the large-scale pre-event party that used to feature Hollywood actors and, for the first time since the event's inception in 2009, did not disclose sales figures during the Singles' Day period, showing a passive approach to promotion. The industry interprets this as a result of the depressed Chinese consumer market due to COVID-19 lockdown measures and the Chinese government's emphasis on frugality.

An industry insider hinted, "While there were achievements on new platforms like TikTok (Douyin) and Kuaishou, performance on Alibaba's Tmall, the largest platform, was worse than in previous years."

Due to the impact of China's lockdowns and the resulting poor performance this year, the cosmetics industry has taken an aggressive approach by holding various discount events in the domestic market. In a situation where consumer sentiment has frozen amid concerns about economic slowdown, the strategy is to reduce inventory and maximize sales through the end of the year. Able C&C is conducting a 1+1 event and discounts of up to 90% on six cosmetic brands including Missha, A'PIEU, and Stila until the 18th. Amorepacific's Innisfree is also offering discounts of up to 75% on selected products until the 21st of this month.

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