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An increasing demand for luxury and premium beauty products is helping boost profits of AmorePacific, Korea’s leading cosmetics company.
In its first half report, AmorePacific said it recorded a net profit of 179.8 billion won, a 24 percent increase from 144.6 billion won during the first half of 2009.
First half sales also jumped by 16 percent to 1.064 trillion won from January to June this year, versus 915.3 billion won during the same period in 2009.
AmorePacific, which accounts for 35 percent market share in Korea’s cosmetics market, said this was the company’s highest first half sales and profits. The spike in sales was driven by the strong organic growth of its core cosmetics business, differentiating brand power and competitive distribution channels.
In the second quarter alone, AmorePacific chalked up sales of 528.2 billion, 17 percent higher than the same time last year. The cosmetics division accounted for the bulk of the sales, continuing double-digit sales growth for nine consecutive quarters.
The company’s luxury brands accounted for 63 percent of the total cosmetics sales. Consumers snapped up high-end beauty creams from Sulwhasoo, AmorePacific and Hera, pushing the luxury segment’s second quarter sales higher by 21 percent. This was attributed to a steady growth in sales through the door-to-door channel, duty-free shops and department stores
The premium cosmetics segment also grew by 14 percent in the April to June period, due to increased sales at the Aritaum chain of stores and the premium function lines Iope and Hannule.
Aritaum, the beauty chain offering AmorePacific’s products, continues to lead the market with 1,159 stores around the country. Sales of AmorePacific products on home shopping channels and online stores also registered a robust 47 percent growth.
Overseas, AmorePacific posted sales of 151.2 billion won in the first half of the year, an 8 percent increase. Profit from the global market, especially in China, Taiwan, Malaysia, Singapore and U.S., were hampered by the strong Korean won.
In China, Laneige continues to gain a reputation as a youthful premium brand, while Mamonde is also becoming available in more department stores and specialty shops. China is currently AmorePacific’s biggest international market, accounting for 44 percent of overseas sales.
In France, the Lolita Lempicka brand helped bring sales back into the black, with an 18 percent increase in the first half of the year. France accounts for 28 percent of Amore Pacific’s total overseas sales.
AmorePacific is known for its high-end brands Sulwhasoo, AmorePacific and Hera, as well premium lines, Laneige, Iope, Hannule, Mamonde, Innisfree and Lolita Lempicka. It also offers personal care brands, Mise-en-scene, Median and Songyeum, as well as the green tea brand O’Sulloc and health supplement V=B Program.
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