Core Insights - Innisfree, once a leading Korean beauty brand, has closed its Tmall overseas flagship store while maintaining operations in local channels, reflecting the broader struggles of Korean beauty brands in the Chinese market [1][3] - The decline in Innisfree's performance is attributed to the waning popularity of the "Korean Wave," the rise of domestic beauty brands, and quality issues within some Korean brands [1][5] Channel Adjustments - Innisfree has officially shut down its Tmall overseas flagship store, focusing on domestic channels like Tmall and Douyin, which remain operational [3] - The brand's rapid rise in China was fueled by the "Korean Wave" and high cost-performance strategies, but it has faced significant challenges since 2020, including a 37% revenue drop due to the pandemic [3][4] - The number of Innisfree stores in China plummeted from over 800 to just 140, marking an over 80% closure rate [3] Financial Performance - Innisfree's global revenue fell by 18% in 2024, with operating profit down 84.1%, representing a more than 62% decline from its peak [4] - Amorepacific Group, Innisfree's parent company, reported a 10.4% revenue decline in the Greater China region for Q1 2025, indicating broader struggles for foreign beauty brands in China [6] Market Dynamics - The decline of Innisfree is indicative of a larger trend among Korean beauty brands in China, with several brands like Etude House and Laneige also scaling back operations [5][6] - Domestic brands have gained significant market share, achieving 55% of the Chinese cosmetics market in the first half of 2025, surpassing international brands [6] Strategic Shifts - Innisfree is attempting to pivot its brand positioning from "naturalism" to "efficacious naturalism" to better meet consumer demands for high-performance products [4][7] - Experts suggest that foreign brands must accelerate localization efforts and enhance product innovation to remain competitive in the rapidly evolving Chinese market [7][8]