It is one of the busiest cosmetics stores. However, this brand, created more than 50 years ago, is encountering difficulties in certain countries around the world. We take stock.
In recent months, beauty brand closures have been happening in France and Europe. While the British brand The Body Shop has just been placed in receivership, another major beauty brand is also experiencing difficulties in Asia. We take stock.
This beauty brand that you all know is packing up in South Korea
In a press release published on March 19 on Instagram, Sephora announced that it would gradually end all its activities in South Korea, both online and in stores. However, the beauty retailer opened its first store in Gangnam, one of the liveliest districts of Seoul, in 2019. How to explain this sudden decision? The expansion plans of Sephora, owned by the LVMH group since 1997, have reportedly been hampered by the COVID-19 pandemic. Covid-19 Four years ago ; something to which was added intense local competition. Other international retailers, such as Watsons and Boots, would also have had difficulty establishing themselves in this market, largely dominated by CJ Olive Young, a pioneering South Korean chain of health and beauty products. The latter would have no less than 1,300 stores across the country, according to information reported by Luxus +.
“It is with a heavy heart that Sephora has decided to end its operations in Korea“, we can read in the caption of the post. A decision which is not so surprising when we know that Sephora Korea recorded significant operational losses between 2020 and 2021, with turnover down 12.7%, according to Fashion Network. Furthermore, in May 2022, the cosmetics chain was already ending its Taiwanese activities for the same reasons, subsequently closing its website and mobile application. Currently, the retailer operates five physical stores in South Korea and is expected to begin closing its stores starting May 6. However, Sephora Korea also clarified that its customer service will remain operational until mid-August to handle returns and refunds.
The “Hallyu” phenomenon: K-Beauty continues its breakthrough in the West
This drop in sales could also be explained by the dazzling success experienced by K-Beauty in recent years. Famous for its holistic approach to skincare, combining natural products, advanced active ingredients and innovative technology, Korean cosmetics has quickly risen to the top of the beauty pyramid. And although Sephora has Korean brands on its shelves, this is without taking into account the preferences of residents who still have difficulty trusting the Western offering and prefer to rely on local distributors. The Korean beauty ritual is divided into three stages: cleaning, hydration and the protection. A method that has quickly become a world-renowned beauty routine. Thus, it is important to note that the popularity of K-Beauty products is part of a broader cultural phenomenon called “Hallyu”, (한류 in Hangeul, 韓流 in Hanja). A term which means “Korean wave” and designates the enthusiasm for South Korean productions in various cultural fields from the 2000s onwards, whether music (K-pop), comics (Webtoons), cinema, series ( K-dramas) as well as cooking and fashion.
While the popularity of groups that have become global like BTS And blackpink is no longer to be proven, the K-Beauty market has also exploded, thanks to its quality, rapid results and effective marketing. With a booming global market, dominated by Asia Pacific, but expanding in North America and Europe, facial masks, serums and other cleansing products are currently leading sales. For the moment, distribution via specialized stores remains important, but e-commerce is growing the fastest.
What future for the French subsidiary?
Let fans of the cosmetics giant be reassured. The French subsidiary of Sephora still has good days ahead of it (and fortunately!). Far from staggering behind competitors, Sephora France is on the risedriven by the success of TikTok beauty trends and certain ultra-popular brands among Gen Z such as Charlotte Tilbury, Rare Beauty, Gisou, Fenty Beauty or Drunk Elephant.
“Sephora, the favorite brand of the French”
Still on TikTok, the hashtag #sephorahaul (a type of video which consists of sharing your new purchases with your subscribers), brings together more than 225,000 posts, testifying to the success of the brand with the younger generation. In 2022, Sephora France recorded a turnover of 12 billion euros, according to industry experts, making it LVMH’s second best-performing brand behind Louis Vuitton (20 billion euros). Serene, its CEO William Motte even said he wanted to reach the milestone of 20 billion euros in sales in the years to come.