South Korean cosmetics giant AmorePacific is overhauling its namesake flagship brand after failing to impress foreign customers, especially big spenders in China.

The company on Monday confirmed that it had pulled the brand from its lucrative duty-free stores in Korea last month, following its recent withdrawal from Japan. Only the four stores at Incheon International Airport will be retained, it said.

“It is true that the higher-priced AmorePacific brand is not as profitable as other popular brands like Sulwhasoo and Hera,” said a company spokesperson.

“We will continue to seek selective marketing for the AmorePacific brand. Through the new strategy, we will elevate its luxury image while enhancing customer satisfaction.”

AmorePacific launched the namesake premium skin care brand in 2002 to compete with global big names such as Lancome and Estee Lauder in overseas markets. 

Despite a successful soft landing in the U.S., the brand failed to gain a foothold in the crowded Japanese market. After years of sluggish sales, the company recently withdrew the brand from Japan, one of the biggest beauty markets.

“Japanese department stores have continued to post negative growth over the past decade,” AmorePacific chairman Suh Kyung-bae told reporters at a news conference in Shanghai in October.

“We will be focusing more on promoting the (low-end) Etude brand for younger people in Japan.”

Another reason behind the brand overhaul may be its failure to attract Chinese customers, the largest foreign clientele for the Korean cosmetics company.

Largely driven by the soaring Sulwhasoo, a brand based on traditional Korean medicine, among Chinese travelers, the company’s duty-free sales more than doubled to 196 billion won ($178 million) in the third quarter. During the period, duty-free sales accounted for almost 20 percent of its total sales. But the AmorePacific brand is still rarely known to big-spending Chinese.

“It was a strategic decision for its luxury image to launch the brand only in developed countries such as the U.S. and Japan. But the upscale push has not yet shown progress,” said an industry source, declining to be named.

“AmorePacific is likely to remain a brand targeting a small niche market. Considering the fast-growing Chinese market, the company will pour more resources into China and its neighboring countries.”

The spokesperson also said that the company had no immediate plan to launch the AmorePacific brand in China, adding that the recently-opened Hong Kong stores would serve as a barometer for gauging its marketability in the region.

By Lee Ji-yoon (jylee@heraldcorp.com)