Another Shift in K-Beauty... The Battle for No. 3 Heats Up

LG H&H's Fall, Amorepacific's Rebound, APR's Surge
With Gudai Global Joining the Race, the Battle for No. 3 Remains Murky

The domestic cosmetics market is being shaken by the rise of new "K-beauty" powerhouses. The traditional Big Three structure of LG Household & Health Care, Amorepacific, and Aekyung Industrial has already been disrupted, as APR has surpassed Aekyung Industrial in sales. With the explosive growth of unlisted Gudai Global added to the mix, some observers say even the two-top structure of Amorepacific and LG Household & Health Care could be broken.

According to the cosmetics industry on February 9, Amorepacific Group's sales last year came to 4.6232 trillion won, up 8.5% from a year earlier. The company is a holding company that encompasses Amorepacific, which operates luxury cosmetics brands such as Sulwhasoo and Hera, as well as affiliates including Innisfree and Espoir. Its core subsidiary Amorepacific posted sales of 4.2528 trillion won last year, an increase of 9.5% year-on-year, driving overall performance. During the same period, Amorepacific Group's operating profit surged 47.6% year-on-year to 368 billion won. In terms of profitability alone, this is the best performance in six years since 2019.

In contrast, LG Household & Health Care's total sales last year were 6.3555 trillion won, down 6.7% from the previous year. In particular, sales in the beauty segment have been steadily declining from 4.4414 trillion won in 2021 to 2.35 trillion won last year. As a result, LG Household & Health Care's operating profit fell 62.8% year-on-year, and the beauty segment swung to a loss, posting an operating loss of 97.6 billion won.

APR is scaling up its performance at an unprecedented pace, rapidly narrowing the gap with the No. 1 and No. 2 players. APR's sales last year reached 1.5273 trillion won, more than doubling from 2024's 722.8 billion won. Operating profit was 365.4 billion won, about three times higher than the previous year's 122.7 billion won. In terms of market capitalization, APR has already overtaken Amorepacific, the leading beauty stock. It is not only about the absolute size of profitability. APR's operating margin for 2025 stands at 24%, far outpacing Amorepacific (7.9%) and LG Household & Health Care (2.7%). By demonstrating both rapid growth and high profitability, APR has emerged as a formidable threat.

Previously, based on 2024 sales, APR (722.8 billion won) overtook Aekyung Industrial (679.1 billion won), leading some to conclude that it has now firmly secured the No. 3 position. Aekyung Industrial's sales in 2025 came to 654.5 billion won, down 3.6% from the previous year, pushing it out of the traditional Big Three cosmetics structure.

Dependence on China Drew the Line... Aekyung's Fall and LG H&H's Crisis

Aekyung Industrial, which had held on to third place within the traditional Big Three cosmetics structure, being pushed out of the rankings is symbolic. In the cosmetics industry, the significance of being No. 3 goes beyond mere sales scale; it is the threshold that determines whether a company is classified not as a pursuer but as a "major player" in terms of investment, distribution, and global partnerships.

The fall of Aekyung Industrial carries important implications for LG Household & Health Care as well. A business structure with a high dependence on the Chinese market increased earnings volatility, and this is cited as a risk that applies directly to LG Household & Health Care. Park Jongdae, an analyst at Meritz Securities, said, "China accounts for an overwhelming 80% of Aekyung Industrial's overseas sales by region, and its sales in China fell 35% year-on-year," adding, "This year as well, as restructuring of Chinese clients continues, it will be difficult to see an improvement in performance for the time being."

LG Household & Health Care likewise took a direct hit from the slowdown in Chinese consumption and ended up with a loss in its beauty segment. Of LG Household & Health Care's overseas sales in 2025 (34%), China accounts for 12%, an overwhelming share, and its sales in China fell 8.7% from a year earlier. Jung Jiyoon, an analyst at NH Investment & Securities, diagnosed, "LG Household & Health Care's fourth-quarter 2025 earnings were an 'earnings shock.' Even after taking into account one-off costs related to voluntary retirement and restructuring in China, the loss-making trend in the cosmetics segment is likely to continue."

Gudai Global, the Final Variable That Could Upend the Game

On top of this, with unlisted Gudai Global joining the race, competition for the No. 3 spot is expected to become even more complex. According to industry sources, consensus estimates put Gudai Global's sales last year at around 1.7 trillion won. Although official results have not yet been released, the estimates alone suggest that the company could immediately jump into the top-tier competition right behind APR. LG Household & Health Care's sales in the cosmetics segment last year were 2.35 trillion won, and some observers warn that unless it finds a new breakthrough, it may have to cede its position to Gudai Global or APR.

Lee Gayoung, an analyst at Samsung Securities, said, "It is true that LG Household & Health Care's results reflected one-off costs such as personnel expenses related to workforce restructuring, but fundamentally they are the outcome of a strategic failure to swiftly keep up with consumer trends," adding, "Under CEO Lee Sunjoo of LG Household & Health Care, the company is actively reviewing acquisitions of popular indie brands as part of a strategic shift, but based on the current situation alone, there is a lack of growth momentum this year."

This content was produced with the assistance of AI translation services.