Stretching Mid-Range Cosmetic Roadshops... Breakthroughs Online and Overseas

Offline Store Sales Recover as Foreign Tourists Increase
Full-Scale Global Market Expansion Targeting Japan, China, and Southeast Asia

First-generation cosmetic road shop companies that led the heyday of K-beauty in the 2010s are showing signs of revival as they successfully rebound their performance one after another. They had experienced a slump over the past few years due to the THAAD (Terminal High Altitude Area Defense) incident, the Hallyu ban (restriction on Korean Wave), and lockdowns caused by COVID-19.

On the 30th of last month, Myeongdong Street in Jung-gu, Seoul, was bustling with foreign tourists. Photo by Jin-Hyung Kang aymsdream@

According to the industry on the 15th, Tony Moly's consolidated sales in the first quarter of this year reached 31.2 billion KRW, a 7.2% increase compared to the previous year. Operating profit turned positive at 500 million KRW, marking a turnaround after 13 quarters.

Tony Moly is analyzing that the restructuring of its business model from a road shop-centered approach to a digital and global focus, along with diversification of distribution channels, contributed to the improvement in profitability. Sales from digital and global sectors have grown to account for more than 50% of the total.

With the recent increase in foreign tourists revitalizing special commercial districts such as Myeongdong and Hongdae in Seoul, Tony Moly reopened three stores in Myeongdong and plans to open one more new store this month.

Able C&C, which operates Missha, also saw its first-quarter operating profit soar by 614.4% year-on-year to 4 billion KRW, with sales increasing by 11.3% to 63.1 billion KRW.

Able C&C is strengthening its overseas business mainly in the United States and Japan. As a result, the proportion of overseas sales expanded from 27.7% in 2020 to 58.4% this year.

As the endemic trend leads to an increase in foreign tourists, sales at existing offline stores are also recovering. For example, sales at Missha Myeongdong Megastore increased by more than 300% in January-February this year compared to the same period last year.

Nature Republic has been promoting cost reduction by closing inefficient stores during the COVID-19 slump. The number of offline stores nationwide decreased from 629 in 2018 to 512 in 2019, then to 439 in 2020, and currently only about 300 remain. Nature Republic's sales last year were 144.9 billion KRW, and operating profit was 1.9982 billion KRW, marking a return to profitability after seven years.

Professor Eunhee Lee of Inha University's Department of Consumer Studies said, “These achievements can be seen as the result of ongoing efforts to improve management efficiency and restructure their business models.”

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