Magnificence shops ‘battered’ by coronavirus pandemic

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Excessive avenue magnificence shops have been as soon as the image of the nation’s Ok-beauty increase. Lining the streets of Myeong-dong, South Korea’s costliest buying district, the sweetness franchise shops was bustling with vacationers from Japan and China in addition to these at residence.

However as tourism plunged and buying shifted on-line through the pandemic, they’re declining at an alarming degree.

“With the absence of international vacationers since March final yr, practically each different store seems to be closed in Myeong-dong,” a Nature Republic official stated. The corporate, one of many once-thriving class of “highway store” magnificence manufacturers in Korea, sells their merchandise by means of its personal franchise community.

“A few of our shops, besides the Myeong-dong World Department, have been closed quickly ever since,” the official stated, referring to its flagship department occupying the nation’s costliest retail area on the entrance of Myeong-dong’s principal avenue.

The model is within the strategy of shuttering a number of of its brick-and-mortar shops in a bid to trim losses and deal with a number of key areas, the official revealed.

The variety of Nature Republic shops has been on the decline for a while, from 701 in 2017 all the way down to 521 in 2019, knowledge from the Truthful Commerce Fee confirmed. Newest knowledge on how most of the 521 shops survived 2020 was not but accessible.

Income too subsequently adopted go well with. Nature Republic posted 109 billion gained in general gross sales through the first three quarters of final yr, tumbling practically 24 % from a yr in the past.

Different highway store manufacturers like Pores and skin Meals and Tony Moly have confronted the same destiny.

Greater cosmetics firms with extra various sale channels, too, have been no exception to the pandemic fallout.

Amorepacific, a Ok-beauty powerhouse with over 30 manufacturers resembling Sulwhasoo and Laneige, noticed the variety of its bodily shops plummet by 661 between late 2018 and August final yr, based on knowledge from the Truthful Commerce Fee obtained by lawmaker Yu Eui-dong.

When damaged down by model, Aritaum noticed 306 retailer closures whereas Innisfree and Etude needed to shut 204 and 151 shops, respectively.

“The variety of our shops has been on the decline due to an industry-wide wrestle in addition to the challenges our firm faces,” an Amorepacific official stated. “However the coronavirus pandemic made issues drastically worse.”

Regardless of the headwinds, the cosmetics conglomerate has sought to maneuver ahead by opening “experience-based” branches resembling Amore Seongsu, a three-storey area that permits clients to check out their product traces in addition to take part in make-up lessons, the official stated.

The cosmetics {industry} as a complete has suffered, as masks sporting has damage demand for make-up merchandise, stated Park Jong-dae, an analyst at Hana Monetary Funding.

“As masks sporting grew to become extra frequent, demand for make-up merchandise additionally plunged, hurting firms, resembling Clio Cosmetics and AK Industries, which depend on obligation free shops and bodily shops,” he stated in a report final month.

To offset the sharp decline in in-person gross sales, most firms have switched to deal with e-commerce channels.

Ready C&C, the corporate behind cosmetics model Missha, launched nunc — a web based buying app — early final yr to spice up its on-line presence.

The app has racked up over 1 million downloads, based on the corporate, and merchandise from its model Missha are additionally being bought on different e-commerce platforms resembling Public sale and Coupang.

Almost 32 % of gross sales at Aritaum, Amorepacific’s multibrand retailer franchise, have been generated by means of on-line channels resembling Coupang, whereas 63 % of gross sales have been from its bodily shops. One other 5 % got here from drug retailer chain Olive Younger through the month of August.

However there nonetheless was some excellent news from the {industry}, with high-end make-up manufacturers posting beneficial properties final yr.

Gross sales of luxurious manufacturers resembling MAC Cosmetics and NARS Cosmetics noticed a 48.4 year-on-year leap, based on knowledge from SSG.com — an e-commerce platform run by South Korean retailer big Shinsegae.

LG Family & Well being Care defied the doom and gloom through the third quarter of final yr. When Amorepacific and Ready C&C suffered a gross sales drop of twenty-two.4 and 29 %, respectively, it posted 5 % enhance in gross sales.

“Although shopper spending continues to contract, spending on luxurious items stays sturdy as customers are prepared to pay for satisfaction,” one LG Family & Well being Care official stated.

The corporate’s high-end manufacturers like Whoo had helped ship a robust enterprise efficiency each at residence and overseas, the official added.

LG H&H’s Whoo and Amorepacific’s Sulwhasoo have been among the many best-sellers on China’s Tmall, operated by Alibaba Group, through the Singles’ Day buying spree in November.

By Yim Hyun-su (hyunsu@heraldcorp.com)





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