South Korea’s cosmetics giant Amorepacific is mulling drastically reducing the number of its stores in China amid sluggish sales, while also ramping up efforts to expand its luxury portfolio and online sales.

As of 2019, Amorepacific operated 1,280 stores for five brands – Hera, IOPE, Mamonde, Etude and Laneige – in China. In 2020 that number fell to some 800 due to the coronavirus pandemic. The Innisfree brand alone saw its number of Chinese stores shrink from 610 to 280 in 2020 and could be reduced to 140 in 2022.

Innisfree recorded more than 50 per cent sales drop in China in the third quarter of 2021 as more affordable Chinese home-grown cosmetic brands are popping up with products of the same or better quality.

“C-beauty is showing strength in the colour cosmetics sector. Chinese customers tend to purchase budget colour cosmetics from home-grown brands while preferring to buy higher-priced, luxury skincare products from foreign brands,” told analyst Jeong So-hyeon from Kyobo Securities to The Korea Herald.

The downsizing of retail stores is reported to be part of a strategic shift focused on the group’s line-ups of high-end products and e-commerce sales. To grow the e-commerce front in China, Amorepacific will increase the proportion of sales generated from digital platforms like TikTok and short video platform Kuaishou to 30 per cent.