Amorepacific's promotional booth at the 7th China International Import Expo in Shanghai, Nov. 5 (Amorepacific)
Amorepacific's promotional booth at the 7th China International Import Expo in Shanghai, Nov. 5 (Amorepacific)

The Chinese market may be too big to lose for Amorepacific.

The Korean cosmetics giant is now refocusing its efforts on high-spending consumers in China through its premium products, trying to restore the foothold it enjoyed before it was affected by geopolitical issues between the two countries.

The renewed focus is reinforced by Amorepacific's steadfast participation in the China International Import Expo for seven consecutive years, including last month. The company's consistent presence at this key event, highlighted by Chinese officials and alongside global cosmetics giants like Estee Lauder and Shiseido, demonstrates its commitment to staying competitive and maintaining a strong foothold in the market.

In April, Amorepacific launched the Young Scientist Committee, a think tank for Amorepacific's China operations under its research facility in Shanghai.

The YSC intends to lead the development and launch of cosmetics aimed at meeting the needs of Chinese consumers. A month later, the company replaced its head of Chinese operations to reassess and reinvigorate its business strategy.

The move comes after Amorepacific Chairman Suh Kyung-bae expressed his commitment to reigniting growth in the Chinese market during the company’s 78th anniversary ceremony last year.

"China remains a cornerstone market for K-beauty, despite shifting policies and consumer sentiments in the country that make it a relatively challenging business environment," an Amorepacific official said. "Looking toward next year, we’re prioritizing business transformation by streamlining offline operations in China and strengthening ties with local e-commerce channels to better connect with Chinese consumers."

The strategic shift comes on the heels of significant struggles in the past.

Amorepacific, which once enjoyed immense success in the Chinese cosmetics market, saw its position rapidly weaken due to geopolitical tensions like the dispute over the deployment of the US antimissile system THAAD on the Korean Peninsula and a ban on Korean cultural content and products in China.

During the pandemic, its offline-focused business model anchored in department stores and brand shops suffered a severe hit, while heavy reliance on duty-free channels further compounded its challenges. In the meantime, Chinese consumers increasingly turned back to more affordable homegrown products that often mimicked the formulations of Korean cosmetics.

Sulwhasoo hosts a global event in Shanghai for the launch of its Jinsul line in 2023. (Amorepacific)
Sulwhasoo hosts a global event in Shanghai for the launch of its Jinsul line in 2023. (Amorepacific)

Despite these challenges and the retreat of several Korean cosmetics companies from China, the country remains the top export destination for K-beauty products.

According to the Ministry of Food and Drug Safety, China accounted for 27 percent of Korea’s cosmetics exports in the third quarter, the largest share for any country. This is 8 percentage points higher than the 19 percent to the US.

In terms of export value, China’s cosmetics imports from Korea amounted to $2 billion, compared to the US at $1.4 billion.

Amorepacific reported sales of 97.6 billion won ($72 million) in the Greater China region during the third quarter. Although sales in the Americas were higher at 146.6 billion won, the company noted that China remains its largest revenue contributor on a single-country basis.

In its efforts to recapture past glory, Amorepacific has placed its premium brand Sulwhasoo at the forefront of its renewed push into the Chinese market.

"Targeting luxury customers in the Chinese market is a strategy pursued not only by cosmetics companies, but also by global businesses across industries. We plan to leverage the premium quality of K-beauty to prioritize and strengthen high-end brands like Sulwhasoo and our freshly introduced AP Beauty," the official explained.

Products of AP Beauty, which held a showcase event in July in Shanghai, are priced between 2,580 yuan and 4,000 yuan ($350-$550), positioning it at an even higher price point than Sulwhasoo.

Meanwhile, on Nov. 11 the Chinese government announced its intent to continue implementing large-scale economic stimulus measures next year. There is growing anticipation in the industry that if consumer sentiment recovers alongside these measures, the Chinese market could contribute to a rebound in K-cosmetics' performance.