Views: 0 Author: Site Editor Publish Time: 2025-11-03 Origin: Site
Once a dominant player built on duty-free stores and department store counters, LG Household & Health Care now faces the growing pains of channel transformation.
The South Korean beauty giant is implementing a "voluntary retirement program" for sales and promotion staff in the duty-free and department store channels of its beauty division. Open to employees over 35, the program offers compensation including 20 months of basic salary and children's education subsidies.
LG Household & Health Care’s beauty division is facing severe performance challenges.
In the first half of 2025, the division’s sales dropped 11.5% year-on-year, and operating profit plummeted 70%. The duty-free channel, which once accounted for half of its sales, has now become a drag on performance.
After setting 17 consecutive years of record sales, LG Household & Health Care has seen year-on-year declines in sales, operating profit, and net profit for two consecutive years since 2022.
The beauty division’s share of total sales also fell from 57% in 2020 to 41% in 2023, nearly halving.
In its financial report, LG Household & Health Care clearly stated that the performance decline was mainly affected by "decreased sales due to the reduced proportion of traditional channels such as duty-free stores."
Faced with development challenges, LG Household & Health Care is pursuing breakthroughs through a series of strategic initiatives.
The company is ramping up investment in beauty devices and technological transformation. In its Q2 2025 financial report, LG Household & Health Care announced plans to expand in the beauty device market and acquired the beauty device brand LG Pra.L from LG Electronics.
It also plans to build a K-Beauty smart skincare ecosystem through the integration of cosmetics, equipment, and artificial intelligence (AI).
LG Household & Health Care is adjusting its market focus to accelerate North American expansion. Amid sluggish performance in the Chinese market, its North American market achieved 4.8% year-on-year growth in the first half of 2025, in sharp contrast to the decline in China.
This growth is mainly driven by the alignment of K-Beauty’s "digital globalization" with European and American cultures.
Personnel and organizational changes are also accelerating. In September 2025, LG Household & Health Care poached Lee Sun-ju from L’Oréal to serve as its new CEO.
LG Household & Health Care’s predicament is not an isolated case but a microcosm of the structural challenges facing South Korean beauty brands in the global market.
Particularly in the key Chinese market, the proportion of South Korean cosmetics exports to China dropped sharply from over 50% in 2021 to below 20% for the first time in the first half of 2025. This data highlights the severe challenges South Korean beauty brands face in China.
As LG Household & Health Care’s main competitor, Amorepacific’s brands such as Laneige, Etude House, and Hera have successively withdrawn from China’s offline market, shifting their focus to online channels.
By closing loss-making stores and optimizing offline channels, Amorepacific has significantly reduced the group’s overall operating costs.
Channel adjustment has become a common industry trend. L’Oréal’s Maybelline began adjusting its offline layout as early as 2018 and closed all offline stores in China in 2022.
Amorepacific’s Innisfree also made headlines in 2022 for closing 600 stores in China.
LG Household & Health Care’s layoff plan is just a reflection of the global strategic adjustments by South Korean beauty giants.
While closing some offline channels, LG Household & Health Care is diverting more resources to the North American market and planning to build a K-Beauty smart skincare ecosystem through the integration of cosmetics, equipment, and AI.
Beyond LG Household & Health Care, its competitor Amorepacific is also shrinking its Chinese business while focusing on markets such as the United States and Europe.
