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Innisfree franchisees stage a protest in entrance of Amorepacific’s headquarters in Seoul’s Yongsan District, Wednesday, demanding that the corporate cease giving extreme advertising and marketing advantages to multi-brand procuring channels that promote Innisfree merchandise, which they are saying is hurting their offline gross sales. Courtesy of the Innisfree Franchisees’ Union
Main magnificence firm Amorepacific confronted an offended group of Innisfree franchisees on Wednesday, because the model’s struggling sellers blamed the corporate’s flawed advertising and marketing for his or her declining gross sales.
Some 70 franchisees protested in entrance of Amorepacific’s headquarters in Seoul’s Yongsan District, demanding that the corporate present extra sensible enterprise help and cease giving higher advertising and marketing advantages to multi-brand procuring (MBS) channels on the expense of their offline shops. Innisfree’s annual gross sales have steadily declined over the previous few years, dropping from 552 billion gained ($377 million) in 2019 to 225 billion gained final yr.
The annoyed sellers stated Amorepacific has been giving extra help to the nation’s main MBS platforms that promote Innisfree — together with CJ Olive Younger, Coupang and Naver Retailer — over their offline retailers. They claimed that the corporate, “by way of such unfair measures, has discriminated towards their offline franchise companies.”
The franchisees stated that Innisfree’s Good Intensive Skincare set, which incorporates 5 objects, sells on Coupang, the nation’s largest e-commerce platform, for 32,130 gained, whereas Amorepacific provides the identical product to their offline shops for 40,700 gained — about 20 p.c costlier. In consequence, the retailers have to boost costs even additional to make a revenue.
The franchisees stated such a lopsided provide coverage undermines the muse of Innisfree’s franchise enterprise. They added that it “makes extra sense for patrons to purchase their merchandise from Coupang fairly than getting them from the corporate.”
Innisfree Inexperienced Tea Ceramide Milk was offered on Naver Buying Stay on Monday throughout a Black Friday promotion at a 57 p.c low cost, going for 48,450 gained. The promotion even included free giveaways corresponding to beauty samples and a tote bag. In the meantime, Amorepacific equipped the identical product to franchisees for 62,700 gained.
The franchisees argued that they may by no means make a revenue beneath such discounted pricing, criticizing Amorepacific’s large-scale on-line promotions and giveaway occasions for “critically disrupting the franchise sector.”
Coupang promotes a reduction marketing campaign for Innisfree in December 2023, that includes IVE’s Jang Received-young. Captured from Coupang’s web site.
“The corporate has created a advertising and marketing construction that advantages solely on-line platforms whereas leaving franchisees behind. The corporate is conscious of this however continues to disregard it,” they stated.
The franchisees additionally blamed Amorepacific’s 2023 rebranding of Innisfree for his or her slumping gross sales, saying it failed to spice up income. They added that the rebranding reduce the model’s product lineup from 1,400 to 300 objects, discontinuing many best-sellers and steady-sellers, which contributed to the general gross sales drop.
“Amorepacific’s help for its franchisees is just superficial. The corporate has elevated its pattern provision by 55 p.c, however that quantities to simply 30,000 gained, which does nothing to assist our companies. It additionally develops and provides sure merchandise solely to CJ Olive Younger, to not us. Our variety of offline shops has fallen from 1,600 in 2018 to 147 this yr,” the franchisees stated.
Following the protest, Amorepacific stated it’s at present in discussions with Innisfree franchisees on tips on how to recuperate the model’s clients and gross sales and enhance its product lineup.
“MBS is now on [the] rise. To help our franchisees, we’ll assist with their market competitiveness towards the MBS channels and share gross sales from our official on-line mall with them,” an Amorepacific official stated.
He added, “We signed a mutual partnership with our franchisees on Dec. 30, 2024. That additionally makes us accountable for discussing with the franchisees once we determine which merchandise to placed on cabinets at Olive Younger in order that the measure gained’t have an effect on the franchisees’ market competitiveness.”
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