Innisfree overtakes Face Shop

Innisfree, a subsidiary of AmorePacific, became the number one road shop cosmetics brand in sales for the first time last year, overtaking The Face Shop which has fallen to second place, industry sources said.

“Road shops” refer to a market segment in Korea made up of stores which sell only one brand of products.

According to the 2015 earnings of AmorePacific, released Tuesday, sales of Innisfree products jumped 30 percent to 592.1 billion won ($485.3 million).

At first glance, Innisfree’s sales appear to be behind its competitor The Face Shop, which saw 629.1 billion won in sales last year.

“In reality, however, Innisfree is estimated to have overtaken The Face Shop in sales as it excluded sales in China in its accounting book,’’ said a source.

Under fiscal regulations of AmorePacific, sales of Innisfree generated by road shops in China fall under the group's overseas sales and is excluded from the firm's annual earnings report. On the other hand, The Face Shop includes overseas sales in its annual earnings report.

Innisfree, which has appealed to Chinese consumers with natural components and eco-friendly packaging, is one of the fastest growing Korean road shop cosmetics brands in China.

The number of Innisfree road shops in China jumped to 203 last year, a 96 percent increase from 107 in 2014.

“The explosive growth in China saw Innisfree stay ahead of The Face Shop when its overseas sales were added to its earnings last year,” the source said. 

AmorePacific officials declined to confirm overseas sales volume of each brand, mentioning compliance issues, but hinted that Innisfree could cement its market leadership in the road shop market.

“Innisfree is a rising brand among the group’s brand portfolio as it already makes up about 30 percent of the group’s total sales in China. The company expects the brand to continue its growth momentum in China,” Kwon Sung-hye, a company spokesperson, said.

By Seo Jee-yeon
(jyseo@heraldcorp.com)