Core Viewpoint - The closure of Innisfree's Tmall overseas flagship store is part of Amorepacific's strategy to streamline resources and create more efficient channels in the Chinese market, aiming to enhance consumer service and interaction experience [3]. Group 1: Company Strategy and Market Position - Innisfree has been a significant player in the Chinese market since its entry in 2012, targeting young consumers aged 20-26 with its "naturalism" positioning and affordable skincare and makeup products [4]. - The brand has expanded its presence across various e-commerce platforms and new retail channels, including KKV and traditional CS channels, despite the recent closure of its Tmall store [4]. - Amorepacific's financial report indicates that Innisfree's sales in China have been declining, with a significant drop in revenue and operating profit from 2017 to 2020 [6]. Group 2: Market Challenges and Performance - The implementation of the "Korean Wave" restrictions has led to a decline in the popularity of Korean cosmetics in China, with domestic brands gaining traction due to their cost-effectiveness and localized development [5]. - Innisfree's sales revenue decreased from 642 billion KRW in 2017 to 348.6 billion KRW in 2020, while operating profit plummeted from 107.9 billion KRW to 7 billion KRW during the same period [6]. - The brand has been undergoing a "slimming" strategy since 2020, closing 90 unprofitable stores in that year and an additional 170 stores in 2021, resulting in a reduction of its store count from over 800 to 140, marking an over 80% closure rate [7]. Group 3: Regional Performance - Amorepacific's overall sales in the Greater China region fell by 27% in 2024, making it the region with the largest revenue decline for the company [9]. - The company has faced challenges in the Chinese market, leading to the closure of other brands like Etude House and HERA, which have shifted to online and collection store models [9][10]. - Despite a 5.7% year-on-year increase in overall sales to 3.89 trillion KRW in 2024, the decline in the Greater China region highlights the ongoing difficulties faced by Amorepacific in this key market [9].