K Beauty: record first-quarter 2023 operating profit for Etude House (AmorePacific)

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After several sluggish years, Etude House, the cosmetics brand of Korean group AmorePacific, posted a handsome profit in the first quarter of 2023. This performance is linked to store closures and a refocusing on e.commerce.

 

“K-Beauty” (or Beauty made in Korea) is making its mark with efficiency.

 

According to the Korea Times, cosmetics brand Etude House, part of Korean giant AmorePacific’s portfolio, posted a record profit in the first quarter of 2023, as “its diversification strategy and store optimization program paid off“.

 

Operating profit for the girly brand, much loved by Generation Y, was KRW 5.3 billion (€3.57 million) in the first three months of the year, compared with just KRW 5 billion (€3.55 million) recorded in the previous 12 months.

 

Store closures

 

The performance is linked to Etude House’s decision to shift much of its retail distribution to wholesale and ecommerce.

 

The brand opened its 200th store in Asia (Korea, Taiwan, Japan) in 2009, before expanding further in China (including Hong Kong), Singapore, the Middle East…

 

But it had been making losses in recent years, exacerbated by the covid which had driven consumers back to the Internet. Hence Etude House’s decision to reduce the number of its stores to 67 after covid.

 

According to the press in these countries, the brand closed its outlets in China in 2021, Singapore in 2022 and Hong Kong in 2023.

 

Online sales

 

On the other hand, it has maintained online sales via its website or platforms and social networks such as T Mall, Wechat and Little Red Book in China, or Lazada and Shopee in Singapore. It has also signed a distribution agreement with the Korean health and beauty store CJ Olive Young.

 

Etude House mainly focused on expanding its offline business until 2016,” an AmorePacific spokesperson explained to The Korea Times. However, after its operations in China were affected by geopolitical issues and the Covid-19 pandemic broke out, the brand decided to reduce the number of its stores and strengthen its online activities.” We’ve always been confident in our products, so it was only a matter of time before Etude House experienced a rebound.”

 

Fierce competition

 

In 2021, after the Chinese park closed, Gary Ng Chuek-yan, senior economist at Natixis Corporate and Investment Bank, told the South China Morning Post that it was “more of a structural problem, as Etude House shares the dilemma of mass-market K-beauty brands facing fierce competition, including local Chinese brands, and more options on online channels“.

 

But the AmorePacific group, founded in 1945 and now ranked among the world’s top 14 cosmetics companies with a good 20 brands, has more than one trick up its sleeve. And it has already begun to adapt to the post-covid world, as demonstrated by Etude House’s first performances in 2023…

 

Read also >Korean beauty group AmorePacific partners with mobile application KakaoTalk

 

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After several sluggish years, Etude House, the cosmetics brand of Korean group AmorePacific, posted a handsome profit in the first quarter of 2023. This performance is linked to store closures and a refocusing on e.commerce.

 

“K-Beauty” (or Beauty made in Korea) is making its mark with efficiency.

 

According to the Korea Times, cosmetics brand Etude House, part of Korean giant AmorePacific’s portfolio, posted a record profit in the first quarter of 2023, as “its diversification strategy and store optimization program paid off“.

 

Operating profit for the girly brand, much loved by Generation Y, was KRW 5.3 billion (€3.57 million) in the first three months of the year, compared with just KRW 5 billion (€3.55 million) recorded in the previous 12 months.

 

Store closures

 

The performance is linked to Etude House’s decision to shift much of its retail distribution to wholesale and ecommerce.

 

The brand opened its 200th store in Asia (Korea, Taiwan, Japan) in 2009, before expanding further in China (including Hong Kong), Singapore, the Middle East…

 

But it had been making losses in recent years, exacerbated by the covid which had driven consumers back to the Internet. Hence Etude House’s decision to reduce the number of its stores to 67 after covid.

 

According to the press in these countries, the brand closed its outlets in China in 2021, Singapore in 2022 and Hong Kong in 2023.

 

Online sales

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After several sluggish years, Etude House, the cosmetics brand of Korean group AmorePacific, posted a handsome profit in the first quarter of 2023. This performance is linked to store closures and a refocusing on e.commerce.

 

“K-Beauty” (or Beauty made in Korea) is making its mark with efficiency.

 

According to the Korea Times, cosmetics brand Etude House, part of Korean giant AmorePacific’s portfolio, posted a record profit in the first quarter of 2023, as “its diversification strategy and store optimization program paid off“.

 

Operating profit for the girly brand, much loved by Generation Y, was KRW 5.3 billion (€3.57 million) in the first three months of the year, compared with just KRW 5 billion (€3.55 million) recorded in the previous 12 months.

 

Store closures

 

The performance is linked to Etude House’s decision to shift much of its retail distribution to wholesale and ecommerce.

 

The brand opened its 200th store in Asia (Korea, Taiwan, Japan) in 2009, before expanding further in China (including Hong Kong), Singapore, the Middle East…

 

But it had been making losses in recent years, exacerbated by the covid which had driven consumers back to the Internet. Hence Etude House’s decision to reduce the number of its stores to 67 after covid.

 

According to the press in these countries, the brand closed its outlets in China in 2021, Singapore in 2022 and Hong Kong in 2023.

 

Online sales

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Sophie Michentef
Sophie Michentef has worked for more than 30 years in the professional press. For fifteen years, she managed the French and international editorial staff of the Journal du Textile. She now puts her press, textile, fashion, and luxury expertise at the service of newspapers, professional organizations, and companies.

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