Beauty's 'Exit from China' vs. Fashion's 'Renewed Push'... Divergent Strategies for the Mainland

Partnering with Local Firms, K-Fashion Reenters the Chinese Market
Hazzys, Kolon Sports, and Others Report Soaring Local Sales
K-Beauty Faces Fierce C-Beauty Competition, Shifts Focus to US and Europe
Amorepacific and LG Household & Health Care Surpass China in Western Sales

There is a clear divergence in fortunes between the domestic fashion and cosmetics sectors, which were once considered the biggest beneficiaries of growth in the Chinese consumer market. In the mid-2000s, the fashion industry had bitter experiences in China after overly aggressive offline expansion and the THAAD (Terminal High Altitude Area Defense) crisis. Now, it is partnering with local companies to reenter the Chinese market. On the other hand, Korean cosmetics, which once enjoyed a boom in China, are losing ground due to fierce competition from domestic Chinese brands and are shifting their focus to North America and Europe.

Exterior of Junji Beijing Store. Samsung C&T Fashion

From Junji and Hazzys to Musinsa... K-Fashion's Second Leap Forward on the Mainland

According to the fashion industry on August 11, Junji (JUUN.J), a global designer brand from Samsung C&T Fashion, has joined hands with Misto Holdings (formerly FILA Holdings) to open a new standalone store in Sanlitun Taikoo Li, Beijing’s luxury shopping district. Following the opening of a store in Chengdu, Sichuan Province, and entering Tmall, China’s largest online platform last month, the company is solidifying its entry into the Chinese luxury market, led by global ambassador and actor Ahn Hyo-seop.

Misto Holdings is rapidly expanding its distribution and licensing business for Korean fashion brands in Greater China through its local subsidiaries (Misto Shanghai and Hong Kong). Misto Holdings, with a stable income from receiving about 3% of FILA’s brand sales as royalties through an existing joint venture with Anta Group, has emerged as a key partner in expanding K-fashion’s territory in the region, now overseeing the Greater China distribution of not only Martine Kim and Marithe Francois Girbaud but also Junji from Samsung C&T.

Not just Junji, but other major K-fashion brands are also expanding in China. LF’s Hazzys, through its local partner Baoxiniao, operates about 600 stores and posted approximately KRW 490 billion in sales in China last year. Kolon Sports, leveraging collaboration with Anta Group, achieved KRW 990 billion in China sales and plans to open 10–20 new stores this year. F&F is also on track for its Chinese subsidiary to surpass KRW 1 trillion in sales. Additionally, the fashion platform Musinsa established a joint venture with Anta Sports, entering cities like Shanghai and Hangzhou, setting a goal to open 100 stores in China by 2030.

Hazzys SpaceH Shanghai Flagship Store. LF

This is not K-fashion’s first foray into China. In the early to mid-2000s, first-generation fashion companies such as E-Land's Teenie Weenie and TBH Global's Basic House enjoyed their heyday by opening thousands of stores across China. However, after the 2016 THAAD crisis, the consumption environment changed rapidly, and as they lagged in e-commerce conversion and struggled with high fixed costs and inventory burdens from large-scale directly managed stores, these companies had to drastically reduce or withdraw their operations.

Recently, fashion companies seeking to return to China have changed their strategy. Instead of investing capital to expand stores directly, they are teaming up with large local players who have existing distribution networks and consumer data or forming joint ventures to reduce initial investment and distribution risks. The approach to sales has changed as well. Offline stores now function not only as sales points but also as experiential flagship spaces to convey brand identity. Actual sales and customer acquisition are increasingly occurring through local social media and livestream commerce platforms such as Xiaohongshu and Douyin. Brands first verify fandom and demand online, and then expand offline.

An industry insider said, "Chinese expansion these days is less about Korean companies knocking on the door first, but more about business opportunities emerging when local consumers discover Korean brands via social media and online platforms. Because they can check local reactions first and then expand offline, there is significantly less risk compared to the past when companies opened many stores with huge upfront investments," the source added.

Fashion Sells 'Brand Sensibility' vs. Beauty Replicated on 'Manufacturing Specs'

The underlying reason fashion companies now see China as a renewed land of opportunity is a combination of shifting consumer trends and the very nature of the industry. Consumption of Korean Wave (Hallyu) content among Chinese consumers in their 20s and 30s is now extending beyond cosmetics into apparel and broader lifestyle segments, cementing K-fashion as a clear standalone category.

According to KOTRA, Korea’s textile exports to China last year hit USD 1.37 billion, surpassing the long-standing top market, the United States (USD 1.27 billion). In the Chinese women’s apparel import market, Korean brands commanded about USD 82 million, ranking tenth among importing countries. Korea’s exports of leggings to China in the athleisure segment jumped 83% year-on-year. This suggests that the popularity of Korean fashion is broadening beyond just a few well-known names.

Fashion is not an industry where product competitiveness is determined solely by technology. Brand cachet, design, fit, and heritage play decisive roles in consumer choice. While it is possible to imitate a design, it is much more difficult to replicate brand image and fan loyalty accumulated over time.

Thanks to the influence of Korean pop music, dramas, and other cultural content, Korean style itself is consumed as a holistic cultural product, which is a strong advantage. While Chinese local fashion brands are rapidly becoming more competitive, this is the very foundation for why K-fashion can maintain a certain "Korea premium" in the market.

Aestura Atobarrier365 Cream. Amorepacific

Cosmetics’ Exit from China... Focus Shifts to the US and Europe

In contrast, the situation is different for cosmetics. As product features like ingredients and formulations are the main competitive factors, as the technological gap narrows, brand differentiation weakens. Local OEM/ODM ecosystems in Guangzhou and Shanghai have grown, allowing C-beauty brands to emulate K-beauty's technologies and marketing strategies quickly. The growing popularity of local brands due to the “Guochao” (national trend/patriotic consumption) movement has also reduced the presence of Korean products.

As a result, Korean cosmetics companies are reducing their reliance on China and rebalancing toward North America and Europe. In the second quarter, Amorepacific’s combined sales in the Americas and EMEA (Europe, Middle East, and Africa) reached KRW 282.4 billion, which is 2.3 times its Greater China sales (KRW 124.5 billion). LG Household & Health Care also saw its North American sales for the same period surpass its Chinese sales for the first time, at KRW 205.8 billion versus KRW 176 billion.

China’s reduced presence is also evident in Korea’s overall cosmetics exports, with the gap being filled by the United States and other markets. In the first half of this year, Korean cosmetics exports reached a record high of USD 7 billion. The share exported to China, once as high as 46.5%, has now dropped to 14.4%. Meanwhile, exports to the US rose by 41.5%, offsetting China’s decline.

Diversification of sales channels, previously concentrated in China, is also showing results. Korean cosmetics companies are streamlining inefficient stores and channels in Greater China while making active use of both online and offline distribution networks such as Amazon, TikTok Shop, and Sephora in the US and other regions.

An industry insider said, "The days when every Korean consumer goods company entered China solely due to its market size are long gone. As Chinese consumers' preferences become more segmented and local brands get stronger, it has become vital to enhance brand strength rather than rely on short-term trend consumption within the Chinese market," the source emphasized.

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