South Korea’s innisfree is reportedly axing 80 percent of its physical stores in the Chinese mainland as part of the company’s strategy.
Several Chinese domestic news outlets reported over the weekend that the South Korean cosmetic brand is slashing its mainland stores to 140 from a peak of over 800.
The beauty and cosmetics conglomerate, Amore Pacific, owner of the innisfree brand, said that the company is optimizing its sales channels in China and such adjustments will continue into 2022, according to a report on Monday by domestic financial news portal 21jingji.com.
However, a staff from the company’s PR department told the Global Times on Monday that “the ongoing optimization is restricted to the innisfree brand.”
Amore Pacific also said it is attaching more importance to the middle and higher segment of its products and online sales channels.
Innisfree, which targets young women aged 20 to 26, had over 800 physical stores at its peak after a rapid expansion since entering the Chinese market in 2012.
The adjustment process has been an ongoing story. The brand closed down 40 loss-making stores in 2019 and a further 90 in 2020, according to media.
It was reported that the company cited its decline in popularity in the Chinese market during the COVID-19 pandemic and a shift by Chinese consumers away from middle-priced products toward luxury brands or brands that offer strong cost performance. Staff from the company mentioned that the statement is false but did not provide further details.
Innisfree is not the only brands from Amore Pacific to shed businesses in China. Etude House, another brand owned by the company, closed down all its 58 stores by March 2021.
Some netizens commented that innisfree’s waning fortune in China was caused by its uncompetitive products and the rise of Chinese cosmetics brands in the niche market it occupies.
According to the company’s financial report up to September 2021, the company’s overseas sales fell 9.2 percent, with some media attributing the decline to the company’s shutting down of stores in China.
A store of innisfree in Shanghai Photo: VCG
