Amorepacific and LG Household & Health Care are rapidly shifting their overseas growth focus from China to North America and Europe. Struggling with sluggish consumer demand in China and a downturn in the duty-free market, both companies have leveraged online channels like Amazon to enhance brand recognition and expand into offline distribution networks such as Sephora and Costco, setting the stage for a performance rebound. The growth strategy of these K-Beauty giants, previously reliant on China and duty-free sales, is evolving into a multi-brand, multi-channel approach centered on Western markets.
According to industry reports, Amorepacific Group recorded consolidated sales of 1.25 trillion won ($1.1 billion) and an operating profit of 122.8 billion won ($104 million) in the second quarter of this year, marking increases of 14.6% and 53.3%, respectively, compared to the same period last year. The group's flagship subsidiary, Amorepacific, also saw a 17% rise in sales and a 59% increase in operating profit, driving the overall improvement. The key to this performance rebound lies in overseas operations, with second-quarter international sales reaching 551.6 billion won, up 28% year-on-year. Overseas operating profit soared 99%, from 36 billion won to 71.8 billion won.
Regionally, the U.S., Europe, and Japan led the growth. Brands like Laneige and COSRX have expanded their presence in the North American skincare market, while emerging brands such as Aestura, ILLIYOON, and Mise en Scène have joined the growth ranks. During Amazon Prime Day in June, Amorepacific Group's U.S. sales increased by 20% compared to last year, while European sales rose by 22%, achieving record highs. Laneige's Lip Glowy Balm and Lip Sleeping Mask ranked first and second in the lip balm category on Amazon U.S. COSRX, ILLIYOON, Aestura, and Mise en Scène products also ranked highly in key categories. Aestura and ILLIYOON's European sales surged by 164% year-on-year.
Amorepacific is expanding brands that have increased customer touchpoints online into local offline distribution networks. The derma brand Aestura first entered Sephora's European online store in February and has since expanded its sales network to approximately 860 Sephora stores across 19 European countries, including France, Germany, Italy, and Spain. Aestura's flagship product, Atobarrier 365 Cream, entered the U.S. market in February 2025 and has since ranked among the top five moisturizers at Sephora. COSRX is also supporting Amorepacific's expansion in Western markets. In 2023, Amorepacific acquired additional shares of COSRX, integrating it as a subsidiary. Together with Laneige, Aestura, and ILLIYOON, COSRX is helping to broaden the Western brand portfolio.
In Japan, the company is diversifying its channels and brands. COSRX achieved record sales during Qoo10 Japan's discount event 'Mega Wari,' while Laneige and Mise en Scène are also expanding their online and offline presence. Conversely, sales in the Chinese market have declined due to the streamlining of distribution channels. Amorepacific is focusing on enhancing profitability by restructuring its store and transaction structures in China rather than aggressively expanding its footprint.
LG Household & Health Care is also seeing the benefits of restructuring its overseas business portfolio with a focus on North America. In the second quarter, the company reported sales of 1.66 trillion won ($1.4 billion), a 3.3% increase, and an operating profit of 102.8 billion won ($86 million), up 87.5%. Net profit reached 77.6 billion won ($65 million), a 101% increase. Overseas sales rose by 12.6% to 584.5 billion won, accounting for 35% of total sales. Notably, North American sales surged by 47.3% to 205.8 billion won, surpassing sales in China for the first time at 176 billion won.
Since appointing CEO Lee Sun-joo at the end of last year, LG Household & Health Care has concentrated investments on brands and distribution channels with high growth potential. The luxury cosmetics business, previously centered on China and duty-free shops, is now focused on improving profitability, while brands with distinct functionalities such as Dr. Groot, Yushimol, CNP, and Physiogel are being developed in North America, Japan, and Southeast Asia. Dr. Groot is leading the charge in North America, having entered the online market in November 2023 and built recognition on Amazon and TikTok while expanding its sales network to Costco. In March, it entered the U.S. Sephora online store, and in June, it installed dedicated displays in over 90 key stores to gauge local demand.
Starting this month, Dr. Groot will sell 18 products, including shampoos, conditioners, and scalp serums, in more than 400 Sephora stores across the U.S. This expansion into offline retail follows its online success, with sales at Dr. Groot and Yushimol increasing by 45.9% and 54.3%, respectively, during Amazon Prime Day in June. Products from CNP, The Face Shop, and Physiogel also ranked highly in key categories. LG Household & Health Care is expanding its North American brand portfolio with products that consumers can easily understand, such as those focused on scalp care, teeth whitening, and skin barrier improvement.
The beauty sector is also showing signs of recovery. In the second quarter, LG Household & Health Care's beauty division reported sales of 818.4 billion won ($688 million), a 3.9% increase, and operating profit returned to the black at 44.4 billion won ($37 million). Brands like Dr. Groot, Yushimol, Dominus, VDL, and Hince are driving performance improvements across domestic and international online and offline channels. Previously, the luxury cosmetics business centered on The History of Whoo was responsible for profits, but the business structure is now shifting towards diversifying brands, regions, and sales channels. LG Household & Health Care is nurturing Dr. Groot and Yushimol in North America while also restructuring its U.S. cosmetics brand, The Cream Shop. At last month's Cosmoprof in Las Vegas, the company unveiled rebranded products from The Cream Shop, expanding its connections with local buyers.
The changes at both companies align with the diversification of the K-Beauty export market. According to the Ministry of Food and Drug Safety, South Korea's cosmetic exports in the first half of this year reached a record high of $7 billion, a 27.3% increase from the same period last year. The U.S. emerged as the largest market, accounting for $1.44 billion, or 20.7% of total exports, followed by China at $1.06 billion and Japan at $582 million. Poland, the U.K., and the Netherlands also made it into the top ten export markets, highlighting the growing presence of the European market.
The trend of the U.S. becoming the largest single market and the expansion of export targets to major European countries is driving Amorepacific and LG Household & Health Care to expand their operations in North America and Europe. The overseas strategies of South Korea's major cosmetics companies, previously focused on China and duty-free shops, are now shifting towards diversifying regions, brands, and distribution channels.
Industry experts believe that as K-Beauty expands into local offline distribution networks, the growth momentum in North America and Europe will gain further traction. Kwon Woo-jung, a researcher at Kyobo Securities, stated, "The expansion of K-Beauty brands into offline channels is rapidly increasing in global markets, including the U.S. This offline penetration can attract new consumers who differ from the existing customer base, and it also has a higher conversion rate due to the presence of consumers with strong purchase intent."
* This article has been translated by AI.
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