Group 1 - Amorepacific, a South Korean beauty giant, announced the closure of its Innisfree Tmall overseas flagship store while maintaining local channels, aiming to integrate resources and create more efficient sales channels for better consumer service [1] - Innisfree entered the Chinese market in 2012 and rapidly grew due to the "Korean Wave" effect and high cost-performance strategy, reaching over 800 stores at its peak in 2016. However, the brand's market share has been declining due to the rise of local beauty brands and changing consumer preferences, leading to the closure of all offline stores and a focus on online sales [1] - In 2024, Amorepacific's sales revenue in the Greater China region fell by 27%, making it the worst-performing area globally for the group [1] Group 2 - The structure of China's cosmetics consumption market has significantly changed, with domestic brands achieving a 55% market share in 2024, surpassing international brands for the first time. Several domestic beauty companies have also reported revenues exceeding 10 billion yuan [2] - Domestic beauty brands have gained popularity among young consumers through precise market positioning and innovative marketing strategies, achieving breakthroughs in functional skincare and leveraging social media and live-streaming for brand awareness [2] - Industry experts suggest that international beauty brands need to accelerate localization, increase R&D investment, and produce products that meet Chinese consumer demands. The current market trend favors personalized and customized products, with consumers willing to pay for quality and safety [2]

Core Viewpoint - Innisfree, a brand under South Korean beauty giant Amorepacific, announced the closure of its Tmall overseas flagship store, effective July 1, marking a significant shift in its strategy in the Chinese market [1][5]. Group 1: Company Actions - Innisfree has only closed its Tmall overseas flagship store, while its domestic Tmall flagship store and Douyin flagship store continue to operate normally [5]. - Since 2020, Innisfree has been implementing a "slimming" strategy in the Chinese market, closing 90 loss-making stores in 2020 and 170 stores in 2021, reducing its total store count from over 800 to 140, resulting in a closure rate exceeding 80% [5]. Group 2: Market Context - Amorepacific stated that the adjustment aims to "integrate resources and build more efficient channels," with the goal of "enhancing consumer service and interaction experience" [8]. - Industry insiders noted that the decline in the popularity of the "Korean Wave" has reduced the appeal of Korean beauty brands, while domestic beauty brands are rising rapidly, capturing market share with high cost-performance products that meet local demands [8].