Core Viewpoint - The recent rumors regarding Sulwhasoo's large-scale store closures and potential exit from the Chinese market have been denied by its parent company, Amorepacific China, which emphasizes that China remains a crucial strategic market for the brand [1] Group 1: Store Closures and Market Presence - Amorepacific China has confirmed that approximately 30 stores are expected to close in China, primarily in second-tier cities, aligning with data from their official website and review platforms [1] - Currently, Sulwhasoo has around 180 stores in the Chinese market, but there has been a noticeable reduction in store numbers, particularly in cities like Changsha and Nanning [1] - In first-tier cities like Shanghai, Sulwhasoo has also reduced its store presence, with a notable closure of a 14-year-old store in a major department store [1] Group 2: Strategic Adjustments - Amorepacific has stated that the adjustments in its channels are not a retreat but rather a restructuring focused on inventory reduction, cutting inefficient channels, and enhancing the presence of e-commerce [3] - The company reported an 8.5% year-on-year revenue growth in the Greater China region for Q3 2025, with its revenue share in the group rising to 10.4% [3] - Despite this growth, the revenue share is still recovering from a peak of 18.5% in Q4 2023, indicating ongoing challenges in the market [4] Group 3: Market Trends and Competition - The overall Korean beauty market in China is experiencing a downturn, with Sulwhasoo's market share in the skincare segment declining significantly since its peak in 2021 [8] - Local brands have begun to dominate the Chinese beauty market, surpassing international brands for the first time in 2023, as consumers shift towards established domestic brands due to price sensitivity and changing preferences [5] - The competitive landscape has shifted, with local mid-range brands gaining traction and directly competing with international brands, including Sulwhasoo [5] Group 4: Product Strategy and Innovation - Sulwhasoo's strategy has evolved to focus on "stabilizing online presence, reducing offline channels, and deepening high-end offerings," with an emphasis on its ginseng product line [8] - The brand's online business has seen growth due to low base effects from previous inventory reductions, while offline channels continue to contract [8] - There is a noted lack of local innovation and adaptation in Sulwhasoo's product offerings compared to competitors like L'Oréal and Estée Lauder, which have established local R&D centers and tailored products for Chinese consumers [9]