Amorepacific, LG H&H Q1 Losses, Differing Outlooks for Q2

[KoreaHerald] Both LG H&H and AmorePacific posted a loss in Q1 of 2023

• LG H&H "saw a 15.3 percent fall in net profit from a year earlier and a 16.9 percent dip in operating profits."
• AmorePacific "fell 21.6 percent on-year to 913.7 billion won and operating profit which fell by 59.3 percent to 64.4 billion won in the January-March period." 
• However it is expected that AmorePacific will do better in Q2 compared to LG H&H due to the rebranding of their various lines and the success of their brands in the North American market.
  

Background

Late last year/early this year, AmorePacific had decided to ease out of China and focus their international strategy in the North American and European markets. Although LG H&H is also expanding their presence in the NA market, they are still focused on China.

Part of the reason for AmorePacific's exit from the Chinese market was the effects of retaliation they felt in response to the THAAD anti-missle system.

China also imposed new rules that all foreign cosmetics companies must disclose "a dossier of compounding tables that stipulate the names and blending ratios of base ingredients used in the product, and also require ingredient suppliers to disclose the ratio of raw ingredients" by the end of the April. This was viewed as an attempt to obtain manufacturers' proprietary knowledge with a concern that such information may be passed on to Chinese companies to create similar products at a lower cost.